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Insurers Seek Ways to Keep Patients With Their Doctors

Medicine: Firms weigh direct contracting after Family Health Care collapse. Some people say they were reassigned to physicians as far away as San Diego.


Several insurance providers are considering contracting directly with area physicians to keep patients and doctors together after this week's collapse of Ventura County's largest medical group.

Such arrangements could be a relief not only to thousands of patients but to doctors already so hard hit by the collapse of Family Health Care Medical Group that some are laying off employees and taking out small business loans to keep their practices afloat.

But some providers, reluctant to go the direct contracting route, were busy Thursday reassigning patients of the failed Simi Valley-based group to new doctors covered by other medical groups--sometimes with frustrating results.

Dr. Jody Balloch of Camarillo said some of her former Family Health Care patients told her they were being assigned by their Blue Cross HMO to doctors in Valencia, at UCLA or as far away as San Diego.

"These patients are livid," she said.

Blue Cross spokesman Michael Chee said he knew of no such cases and called the scenario "highly unlikely." He said it's possible that patients trying to use the company's online service hit a computer glitch or that patients misunderstood their options.

"People get confused about what they heard and where they heard it," Chee said. "We're having problems covering Simi Valley, but we would never refer someone to San Diego. There are doctors available in Woodland Hills . . . and Oxnard."

State officials said no patient who has lost access to his or her regular doctor because of the group's collapse should have to drive more than 15 miles or 30 minutes to get to a new doctor. Patients told otherwise should call the state Department of Managed Health Care at (888) HMO-2219.


It remained unclear just how many of the 135,000 patients affected by the group's collapse will be able to keep their regular doctors under their existing insurance plans.

"Everything's still sort of a moving target at this point," said Joy Higa of the Department of Managed Health Care.

Dozens of doctors who are members of overlapping medical groups with similar insurance structures were expected to be able to keep their patients. But patients of doctors who remain independent had no guarantee of maintaining their medical relationships.

Chee said "it remains to be seen" whether Blue Cross would pursue direct contracts with area doctors, but he expected that nearly a third of his company's 34,000 affected patients could keep their physicians. He said many medical groups similar to Family Health Care were well-run and more efficient than contracting with individual physicians in all cases.

Blue Shield, which covers 23,000 patients, was redirecting its share of patients who saw Family Health Care staff physicians to new doctors, but was temporarily allowing many patients who saw contract physicians to continue their affiliation. It was unclear how long that arrangement would last.

Other insurers were at least considering contracting directly with physicians to keep them with their patients.

"We don't have a solid number, but we do expect the vast majority of our patients to be able to retain their existing doctors," said Brad Kieffer, a spokesman for Health Net, which covers 20,000 area patients who were affiliated with Family Health Care.

"Doctors are going to other groups that have Health Net affiliations," he said. "And if there are any holes in there, we will fill as many as possible with direct contracts."

In the meantime, the company is guaranteeing direct payment to doctors for visits from regular patients through the end of next month, Kieffer said.

"We are making every effort to make sure our members are able to maintain their existing doctors. We want to do what is right."


Two smaller insurers, One Health Plan and Universal Care, which covered about 1,200 patients combined, expect to allow all of their patients to continue with their regular doctors, Higa said.

Aetna U. S. Healthcare and Cigna, major providers with Family Health Care, were discussing direct contracts to keep doctor-patient relationships intact, said Balloch, who was in contact with officials from both companies Thursday.

"We're very pleased," she said. "We're going to try this. This way, we can keep our patients."

Groups like Family Health Care essentially serve as middlemen between insurance companies and individual doctors, making it easier and often cheaper for insurance providers to do business.

When they are administered well, the groups work well for physicians. But in this case, doctors have complained that Family Health Care was months behind on payments. The company, which folded Monday, expected to file Chapter 7 bankruptcy this week.

Monthly bulk-rate payments went from insurers through Family Health Care to doctors' offices about this time each month. But with the bankruptcy, doctors who contracted with the company won't get this month's checks.

In Balloch's case--with Family Health Care patients making up 70% of her practice--that's $25,000 a month she will be out. She had to lay off two staffers, cut back hours for other staff and take out a small business loan to tide her over. If Aetna, Cigna and Health Net sign direct contracts with her, though, she will be able to stay in business, she said.


Bruce Jacobson, a West Hills physician and chief of staff at West Hills Regional Medical Center, will also be out thousands of dollars when his check from Family Health Care doesn't arrive today. He is also considering taking out a loan.

"I'm very severely financially hurt," he said. "I'm very depressed. I feel absolutely taken advantage of."


Correspondent Paul M. Anderson contributed to this story.

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