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Biotech / Medical : FPA Medical Management - FPAMQ -- Ignore unavailable to you. Want to Upgrade?

To: Richard D who wrote (848)	7/6/1998 10:07:00 PM
From: Tom Hua	Respond to of 1110

Richard, more news. Regards, Tom Bloomberg News July 6, 1998, 4:42 p.m. PT PacifiCare Says It's Canceled All Contracts With FPA Medical Santa Ana, California, July 6 (Bloomberg) -- PacifiCare Health Systems Inc. said it's terminating all contracts with FPA Medical Management Inc. after the physician-practice manager, one of the largest in the U.S., failed to pay some clients' doctors. The Wall Street Journal first reported today that PacifiCare, one of California's biggest managed health-care companies, was terminating most of its FPA contracts. FPA, which handles about 200,000 of PacifiCare's 3.7 million members, disclosed last week that some of the agreements were ending. PacifiCare said it will consider signing new contracts with some of FPA's doctor groups. FPA shares have fallen more than 90 percent in the last six months as a result of its financial problems, including its failure to make a $2.6 million bond payment last month. ''They simply expanded too fast,'' PacifiCare President and Chief Executive Alan Hoops said. ''We wanted the flexibility to begin transferring members to what we believe is a more stable provider.'' Physician-practice managers buy doctors' practices and clinics, handling administrative duties and negotiating with managed-care companies for a percentage of doctors' income. FPA's woes stem from agreements with health insurers in which it agreed to provide care for patients in exchange for fixed payments that didn't cover costs. About 80 percent of the PacifiCare patients being treated by FPA physicians will be able to stay with their doctors, said PacifiCare spokeswoman Susan Simon, who confirmed the company was ending all contracts with FPA. About half the affected customers -- roughly 100,000 members -- are in California and the rest are in Arizona, Nevada and Texas, she said. FPA said that it's closing 15 facilities with about 800 employees in Arizona as of Aug. 31. The Thomas-Davis Medical Centers in Tucson and Phoenix are being closed as part of FPA's plan to improve its financial situation. San Diego-based FPA Medical fell 7/32 to 1 5/32. Santa Ana, California-based PacifiCare rose 2 1/16 to 91 3/8.