A bankruptcy judge on Wednesday approved nearly $10 million for hospitals and medical groups in the MedPartners Provider Network, an action that state regulators said was needed to prevent a "meltdown" of the troubled health-care company.
The approval by U.S. Bankruptcy Judge Barry Russell guarantees payments for doctors and others who care for the 1.1 million Californians in the MedPartners physician management group.
It also means that health-maintenance organizations that contract with MedPartners to provide care for their members will continue to make their monthly payments to MedPartners, which will then reimburse doctors, hospitals and other providers.
Many of those health-care providers were threatening to withhold their services unless they received their March capitation payments--a fixed monthly fee paid to medical groups to take care of patients.
Eugene Froelich, who was appointed conservator of MedPartners two weeks ago when the state took over the company and forced it into bankruptcy, said in court papers that the payments were needed "to best protect the enrollees . . . and [to] avoid a meltdown of the health-care delivery network."
Attorneys for several health maintenance organizations supported Froelich's emergency motion.
Richard K. Diamond, an attorney for the conservator, said he was pleased with the judge's action.
"This will help preserve the network, and that's very important now," he said.