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Closure of Medical Group Creates Chaos

Health: Patients are upset because offices failed to cancel appointments. Doctors worry about ever being paid. Physician shareholders formally vote to dissolve and file for bankruptcy.


SIMI VALLEY — Doctors and insurance providers scrambled Tuesday to bridge a sea of "utter chaos" created by the abrupt closure of Ventura County's largest medical group.

The demise of Family Health Care Medical Group appears to have already cut 50,000 patients off from their doctors.

One patient tried in vain to stock up on prescription drugs for her child, afraid that she would be unable to get refills. The woman, who beat cervical cancer 16 years ago, was also upset at the possibility of losing the Simi Valley doctor she credits with saving her life.

An elderly man showed up to have a patch of skin cancer removed by another doctor at the same office, only to find the office closed and his appointment canceled.

Meanwhile, Family Health Care's 24 physician shareholders met and voted formally to dissolve and file for bankruptcy under the weight of a debt estimated at $6 million and growing. The bankruptcy filing could take place later this week, according to spokeswoman Mari Zag.

That could mean that contracting physicians already owed money have to wait months to be paid and what they do get back may be "only a percentage of pennies on the dollar," Zag said. How much they recover and when depends on the court, assets and liquidation proceedings, and there is no estimate this early.

Family Health Care contracted with about 850 specialists and other primary care physicians in addition to its 45 staff doctors.

To date, 130 of those doctors have estimated that they are owed $2.5 million collectively, said Mary Carr, executive director of the Ventura County Medical Assn.

Several former staff physicians with Family Health Care were trying to quickly regroup into a handful of physician-run clinics, and many hoped to be able to reopen in their longtime office spaces, but no such arrangements had been formalized, said Dr. George Dichter, medical director for the failed group.

Meanwhile, HMO executives at Blue Cross of California and more than a dozen other companies spent hours crunching numbers to determine how many former Family Health Care patients could keep their doctors and how many would need to be reassigned as a result of the medical group's closing.

Letters providing patients with those sorts of decisions and instructions were to go out in the mail beginning today.

None of the 135,000 patients affected in Ventura and Los Angeles counties will actually lose their insurance, Ventura County Medical Assn. officials said. Patients who need care were told to go to hospital emergency rooms, and those with questions were told to call their insurance companies.

But at least 50,000 patients have lost their doctors--at least for now. Family Health Care had 45 physicians on staff, all of whom were left without jobs when the group folded Monday. Their former patients are expected to be assigned new doctors, but it was unclear how soon.


Some of those doctors said they would try to keep seeing some patients anyhow, with their staffs working on a volunteer basis.

But patients were left confused Tuesday, and Dichter described the general scenario as "utter chaos."

Patients who had been seeing another 850 non-staff primary care physicians and specialists that contracted with Family Health Care have lost the middleman needed to authorize payment from their HMOs--an administrative nightmare expected to be felt the hardest in Simi Valley, where an estimated half of the population will be affected, Carr said.

Family Health Care operated clinics in Simi Valley, Thousand Oaks and Camarillo.

A spokesman for Blue Cross of California said at least 5,600 of the 34,000 patients affiliated with Family Health Care would be able to keep seeing their regular doctors.

"It's a really frustrating position to be in," Michael Chee said. "We'll do everything we can for our members."

Susan Blais, executive vice president for Maxicare, said her company has 3,000 affected patients. The company's priority is making sure that patients undergoing treatment are able to keep receiving care, she said.

"This happened so fast that we didn't have enough time beforehand to say, 'Here's what your options are' " to patients, she said.


Telephones at Family Health Care were disconnected and offices were closed. A temporary urgent care clinic was open Tuesday on Sycamore Drive in Simi Valley, but that clinic was not expected to be open today.

"It may be that for a number of weeks, the only patients that will be getting care are patients with chronic cases or emergencies," Carr said. "Patients who need preventive care and elective procedures may need to wait."

Meanwhile, several independent doctors who contracted with Family Health Care have said they are owed money through the medical group and don't know how they'll get it. For those who saw a large chunk of their patients through Family Health Care, the immediate future is uncertain.

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