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$3 Million Sought to Keep Simi Valley-Based Doctors Group Afloat

Finances: Family Health Care, which serves 135,000 patients in region, faces bankruptcy unless it can secure an emergency loan.


The California Medical Assn. is seeking a $3-million emergency loan for a Simi Valley-based physicians group so that it can stave off bankruptcy and continue to serve 135,000 patients in Ventura County and the western San Fernando Valley.

Family Health Care Medical Group, the largest in Ventura County, has been teetering on the brink of bankruptcy for weeks, and the state doctors' association now says that the group needs the bailout or it will soon close its doors.

In addition to creating havoc for patients, bankruptcy would affect 200 primary care doctors and about 700 specialists affiliated with the plan.

"Family Health Care needs to be bailed out or it's going out of business," CMA President Marie Kuffner confirmed Tuesday during a speech at Oxnard College. "And that situation is being repeated everywhere--in Orange County, in San Diego, in Sacramento."

Statewide, more than two dozen physicians groups that provide health care for insurance company health plans have failed in recent years, including the Briarwood, Oakview and Ventu groups in Ventura County. They usually cite low payments from managed-care organizations as the problem.

The CMA sought a loan for Family Health in a letter Thursday to the 13 health plans that contract with the medical group. It said Family Health's $1-million debt had to be rectified immediately or it would fold.

"The CMA and the Ventura County Medical Assn. are extremely concerned that [the] insolvency and potential closure would cause serious instability in the delivery of health care services and leave specialist physicians with over $1 million in unpaid claims," the letter said.

The CMA said there are no other physicians groups in the communities served by Family Health with capacity to absorb so many extra patients.

Centered in Simi Valley, Family Health cares for tens of thousands of patients through clinics and specialists in Simi Valley, Thousand Oaks, Camarillo, Moorpark and Oxnard. Its West Hills clinic serves about 16,000 patients from the San Fernando Valley, officials said.

The CMA has intervened in the same way for at least two other large physicians groups.

The state's largest doctors group, KPC Medical Management in Riverside, recently received a bailout of about $30 million from health plans including PacifiCare Health Systems, HealthNet and Cigna--also some of Family Health's largest contractors.

A factor in the KPC loan was involvement by the state Department of Managed Health Care--an agency created last year to handle problems associated with managed care.

A consultant for Family Health, Andre Berger, said the group met Monday with representatives of all 13 of its health plans to outline the group's reorganization plans.

"We told them about our financial condition and the recovery plan and asked them for money," he said. "They listened. There was no negative response. We'll be meeting with each of them individually."

Without loans, Family Health would probably close in a few weeks, Berger said. With the loans, Family Health could be back on its feet in 18 months and begin to repay the loans, he said.

Family Health is doing its part to solve its problems, Berger argued, bringing in his Los Angeles company about two months ago to cut costs, correct computer programs and improve contracts with health plans.

"This organization has some critical financial issues," he said. "But all are reversible with the infusion of some funds from the health plans, at least $3 million."

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