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Calif. Regulators Seize Company

March 12, 1999

LOS ANGELES (AP) _ In a first for California, state regulators have taken over an ailing health care network, vowing that service to the company’s 1.3 million patients statewide will not be interrupted.

The state Department of Corporations on Thursday placed MedPartners Provider Network into Chapter 11 bankruptcy protection.

The Los Angeles Times, citing unnamed sources, reported today that the takeover was to ensure the company wouldn’t close without making arrangements to care for patients.

The move came as a shock to company officials.

``We believe the actions are unwarranted and we believe we’ve met our obligations to support the plan,″ said Robert Mead, spokesman for MedPartners Inc., the parent company of the Long Beach-based provider network that runs 117 clinics and employs 1,000 doctors in California.

The state’s conservator, Eugene Froelich, said in a letter to insurers and employees that the clinics would remain open and no employees would lose their jobs.

Thursday’s action marks the first time California officials have taken control of a health care company. Earlier this year, New Jersey and Mississippi seized health care companies that were near-bankrupt.

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