North American Medical Management, the IPA management subsidiary of embattled PPM PhyCor, will shut down its Florida operations next month.
NAMM was left without contracts to manage when two HMOs pulled out of the state's Medicare program, ending its relationship with South Pinellas Affiliated Physicians in St. Petersburg.
The move, effective Feb. 28, will leave NAMM with 16,280 physicians under contract in 14 markets nationwide, down from a peak of 26,000 physicians in 36 markets in late 1998. Approximately 40 to 50 NAMM administrative employees in St. Petersburg and Orlando, Fla., will lose their jobs.
John Jenkins, administrator of the IPA, says Blue Cross and Blue Shield of Florida's decision to end its HealthOptions Medicare & More HMO coverage for 5,300 of the IPA's patients will leave NAMM with no capitation contracts to manage in Florida at the end of next month. UnitedHealth Group, the only other NAMM payer remaining in the state, also is pulling out of its Medicare HMO contract at the end of February.
Jenkins says that the IPA now is negotiating fee-for-service contracts with the two insurance companies.
"The desire of the physicians to be in a risk-based situation changed," says Howard Jewell, vice president of marketing and communications for Nashville, Tenn.-based PhyCor. The approximately 300 physicians in the South Pinellas group bought their practice from PhyCor in February 2000 after three years of PhyCor ownership.
Jeff Gasser, group vice president for NAMM in Florida, says the market always has been Medicare-oriented because of the high number of senior citizens in St. Petersburg and Pinellas County. "There weren't enough dollars for it to make sense" for NAMM to continue managing the IPA's risk contracts, he says.