Knight Ridder/Tribune Business News
Jul. 21--Beleaguered FPA Medical Management Inc. has declared bankruptcy, prompting some Sacramento-area doctors to wonder if the company will pay them $1 million they say they are owed.
Several doctors have complained that FPA, which contracts with health plans and doctors to provide care for patients, owes them for work done months or years ago. But FPA's filing on Sunday for Chapter 11 reorganization means the San Diego-based company won't be paying anyone for a while.
A spokeswoman for FPA said doctors who continue contracting with FPA will be paid money owed them in September or October. But those doctors who want to sever ties with FPA, which includes some physicians in the Sacramento area, 'forfeit all payments,' said spokeswoman Ann Julsen.
FPA has contracts with about 500 doctors in the Sacramento area. It's unclear how many of them have claims for unpaid bills from FPA. But the Sacramento-El Dorado Medical Society said it has heard from at least 50 doctors' offices in the area and that collectively they are owed at least $1 million.
They are doctors like Terry Zimmerman, a plastic surgeon in Folsom, who said that FPA owes him about $1,000 for work he performed more than a year ago.
'To tell you the truth, I'm just sitting back and seeing what transpires,' said Zimmerman, who said he still hopes to settle his case with FPA.
Some see a protracted battle before the payment controversy is concluded for most doctors.
'No one has the answer as to whether (FPA) will pay or they won't pay. It will be a long, drawn-out process,' predicted Bill Sandberg, head of the Sacramento-El Dorado Medical Society.
The California Medical Association, which is documenting the alleged delinquent payments, is pushing for health plans to reimburse physicians because it says HMOs are ultimately responsible for paying bills for health care.
But the HMOs, which include giants like Blue Cross, Health Net and Pacificare, don't have any plans to make those payments, said Maureen O'Haren, executive vice president of the California Association of Health Plans. The HMOs already paid once -- when they contracted with FPA to manage patient care -- and they should not be required to pay again, O'Haren said.
FPA is one of the nation's biggest physician practice management companies. It buys the assets of doctors' practices and negotiates fees with health plans in return for a percentage of the practices' income.
FPA's growth gave it a nationwide presence and last year it reported $1 billion in sales. But it also took on heavy debt and some costs, like medical expenses, grew beyond its control.
The state Department of Corporations, the agency charged with regulating managed care organizations in California, met with FPA and health plans Monday to begin sorting out the payment issue. Nothing was finalized, said spokeswoman Julie Stewart.
FPA operates six medical centers around Sacramento and they will remain open during bankruptcy proceedings, the company said.
FPA's bankruptcy case was filed in Wilmington, Del., where the company is incorporated. The company listed assets of $46 million and liabilities of $345.5 million. FPA said it expects to file a reorganization plan by September and exit Chapter 11 by December.
Shares of FPA fell Monday to 18 3/4 cents, down 53 cents, on the Nasdaq Stock Market.
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(c) 1998, The Sacramento (Calif.) Bee. Distributed by Knight Ridder/Tribune Business News.
