New Jersey Sues Management Co., Seeks HMO's Reins

New Jersey's Department of Banking and Insurance last month sued PHP Healthcare, charging that the medical management company placed HIP Health Plans of New Jersey in a "financially hazardous" situation. PHP, through its New Jersey subsidiary, Pinnacle Health Enterprises, last year signed a 20-year management contract with HIP.

After discovering that HIP had a negative net worth of $20 million in August, the state ordered Pinnacle to come up with a financial recovery plan for the HMO. But the state rejected the plan, and on Oct. 27 ordered HIP to cut all ties to PHP and Pinnacle. Two days later, Pinnacle CEO Paul W. Frankel, M.D., was found dead in his home, with a suicide note that blamed HIP's financial troubles for his decision to take his life.

A hearing on the state's request to place HIP in rehabilitation was postponed Nov. 5. The Medical Society of New Jersey asked to be represented at the hearing. The society represents some of the 7,000 doctors who hold contracts with HIP, and other providers to whom Pinnacle owes millions for care already delivered.

Career Opportunities

HAP, a subsidiary of Henry Ford Health System, is a nonprofit health plan providing coverage to individuals, companies and organizations. This executive develops strategies to meet membership and revenue targets through products, pricing, market segmentation and advertising.  Aligns business among Business Development, Commercial Sales, Medicare and Public Sector Programs and Product Development. Seeks to enhance and be responsible for business development and expansion through the development of an effective product portfolio, strong interpersonal relationships and service excellence.

Apply via email to or online at

Subscribe to Our Newsletters

Monthly table of contents

Be notified as each issue of Managed Care is available online.

Biweekly newsletter

Recent topics have included:

PTCommunity news

New drug approvals, clinical trials, drug management. Three times per week.