New Protections In California Not Helping Docs

For all the talk of change in the state of California's ability to govern health care delivery, it appears that one group — physicians — is falling through the cracks.

California passed a series of health care reform bills last year, including a measure that established a Department of Managed Care to oversee health plans operating in the state. Passage of 21 new laws coincided with an unrelated series of medical group failures that physicians nonetheless blamed in part on MCOs' rules of engagement.

But while the new Department of Managed Care is talking tough about patient protections, medical groups have been left to sink or swim. The most recent evidence may be embodied in KPC Global Care, the company formed from most of the assets of MedPartners' California provider network. KPC, which operates 42 clinics and serves a half million patients, is losing $2 million a month and is delaying some payments to physicians and suppliers, the Los Angeles Times reported. KPC's owner says his company can survive only two to four more months without receiving higher payments from health plans.

The Department of Managed Care, which assumed oversight of HMOs from the Department of Corporations on July 1, has offered little in the way of protection for physician groups. It can ask some groups to prove they are solvent, but some observers feel it could take up to two years before the department can establish regulations for medical groups. In the meantime, the state remains as hands-off with physician groups as it ever was.