News in brief - Aug. 7, 2000

Plans exit giant California practice - First Texas HMO liability suit settled - UnitedHealthcare exits California

Plans exit giant California practice

KPC Medical Management, which inherited MedPartners' troubled Southern California practices a year ago, has been having more problems in its efforts to turn around the 500-member physician group.

Blue Shield of California said it cancelled contracts for 15,000 members at KPC on July 3 and is assigning those patients to new doctors. And Cigna HealthCare said it is shifting at least 18,000 of its 94,000 members in KPC to new doctors.

KPC officials declined to comment, saying they were still negotiating higher reimbursement with remaining plans.

With losses still at more than $1 million a month, KPC has stopped payments to many of its 12,000 contracted physicians, mostly specialists, the California Medical Assn. said.

First Texas HMO liability suit settled

The first lawsuit filed under Texas' HMO liability law has been settled. Details of the settlement were not revealed.

Filed against NYLCare65, now owned by Blue Cross Blue Shield of Texas, the suit involved a member's suicide just after release from a mental hospital. The lawsuit charged that the release came when the plan refused coverage.

Representatives of the Texas Medical Assn. said that although Blue Cross may have made some concessions, the outcome would not affect eight to 10 other lawsuits filed under the Texas law.

UnitedHealthcare exits California

Citing losses, UnitedHealthcare announced on July 15 that it will transfer all 225,000 of its HMO, PPO and point-of-service members in California to Blue Shield of California.

But United said its Uniprise subsidiary, which handles large multistate employer contracts, will continue covering 700,000 lives in California and use Blue Shield's provider network.

The plans said the deal is an even swap with no money changing hands. It still needs approval from California's newly created Dept. of Managed Health Care.