This does not look good
Riverside, Calif., Hospital Sues Physician Management Company
Douglas E. Beeman
11/19/1999
KRTBN Knight-Ridder Tribune Business News: The Press-Enterprise -
Riverside, California
Copyright (C) 1999 KRTBN Knight Ridder Tribune Business News;
Source: World Reporter (TM)
RIVERSIDE, Calif.--Riverside's Parkview Community Hospital claims
MedPartners Inc., the troubled physician management company, shorted
the struggling hospital $10 million in patient care funds and kept such
poor records that the hospital never knew for sure which patients were
eligible for care.
The hospital, which has lost nearly $15 million over the last four years,
sued MedPartners Thursday in Riverside Superior Court.
Joel Weiden, a spokesman for Caremark Rx, the name MedPartners
recently adopted, said the Birmingham, Ala., company could not
comment because it had not seen the lawsuit. However, Weiden said
MedPartners has "made a good-faith effort to resolve outstanding issues
with all health plans, institutions and doctors ... and we will continue to do
so until it's resolved."
MedPartners owned and managed physician groups throughout Southern
California, using a now-bankrupt subsidiary, MedPartners Provider
Network, to act as a financial and managerial middleman between health
plans and the doctors and hospitals who provided the care. Earlier this
year, California's Department of Corporations seized control of the
subsidiary and forced it to declare bankruptcy. State regulators said the
subsidiary had depleted its cash reserves, and they were afraid it would
pull out of the state without paying its bills.
Most Southern California hospitals that dealt with MedPartners have tried
to resolve unpaid bills through a settlement between the company and
state regulators, said Jim Lott, spokesman for the Healthcare Association
of Southern California. Under that settlement, MedPartners agreed to be
responsible for valid debts and claims against it.
"We were hoping that would be the process that would keep it together
and get a good business solution for everyone," Lott said.
But Rebecca Callahan, the Irvine attorney who represents Parkview, said
the hospital no longer had a contract with MedPartners by the time the
bankruptcy court intervened.
According to the lawsuit, Parkview was supposed to provide hospital
care to about 80,000 patients affiliated with Riverside Medical Clinic,
which MedPartners formerly managed. The contract required Parkview
to cover the cost of hospital care provided there and elsewhere. In
exchange, the hospital got a flat monthly fee for each patient.
MedPartners was supposed to regularly provide lists of eligible patients,
and data on a variety of items, including payment claims and hospital
services provided elsewhere, the lawsuit states.
But MedPartners never provided an accounting for more than $8 million
in out-of-area hospital charges, or an accounting of $3 million in monthly
fees that the company claims it overpaid the hospital for patient care, the
lawsuit alleges. The suit contends MedPartners never provided an
up-to-date list of patients Parkview was responsible for, leaving the
hospital to provide care to ineligible patients.
Peter Gasperoni, a managed care consultant hired by Parkview
Community Hospital, said the hospital is seeking $10 million in
reimbursements from MedPartners. He said the hospital has tried since
last year to resolve the dispute.
MedPartners sold most of its physician practice management business this
year to concentrate on prescription drug management programs. The
company renamed itself Caremark Rx to reflect the change.
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