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California / News and Insight on Business in the Golden
State | THE STATE / HEALTH

FPA to Close Arizona Units in Reorganization

July 08, 1998|Bloomberg News

FPA Medical Management Inc., one of the biggest U.S. operators of physicians practices, said it will close the Thomas-Davis Medical Centers in Tucson and Phoenix, firing all 800 employees, as the company tries to return to profitability. The San Diego-based company said it will close the units at the end of next month. It made the announcement Monday after Cypress-based PacifiCare Health Systems Inc., California's second-largest HMO, said it is terminating contracts for FPA to treat 200,000 members because FPA had fallen behind in payments to physicians. FPA is drawing up a restructuring program that it hopes will persuade creditors to extend deadlines for debt repayment. FPA's woes stem from arrangements with health insurers in which it agreed to provide care for patients in exchange for fixed payments that didn't cover costs. FPA shares fell 3 cents to close at $1.13 on Nasdaq.

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