California Firm Running Physician Practices Is Closing Down as Scrutiny Ramps Up

SynerMed, an organization that manages doctor practices serving tons of of hundreds of Medicaid and Medicare sufferers throughout California, is planning to close down amid scrutiny from state regulators and well being insurers.

The firm’s chief govt, James Mason, notified workers in an internal email Nov. 6, obtained by Kaiser Health News, that audits by well being plans discovered “several system and control failures within medical management and other departments.”

As a outcome, Mason wrote, the corporate “will begin the legal and operational steps to shut down all operations.” He stated he was engaged on the transition of SynerMed’s purchasers to a different administration agency inside the subsequent 180 days.

Separately, the California Department of Managed Health Care confirmed it’s investigating the corporate.

“There is an open investigation of SynerMed, but the details are confidential right now,” stated spokesman Rodger Butler. His company displays the monetary solvency and claims-payment practices of many doctor teams that contract with well being plans.

The firm’s sudden determination to close down has sparked alarm amongst some docs and medical teams which have relied on the corporate to deal with their funds and enterprise operations.

For years, SynerMed has served as a key intermediary between well being plans and impartial doctor practices, dealing with insurance coverage contracting, paying claims and performing different administrative duties so docs can deal with treating sufferers. That function has expanded as hundreds of thousands extra Californians are enrolled in Medicaid managed-care plans below the Affordable Care Act.

SynerMed has billed itself as “one of the largest Medicaid/Medicare management service organizations in the nation.” Last yr, the corporate boasted that it had enrollment of 1 million sufferers in California, aided by an inflow of enrollees who bought protection below the federal well being legislation.

Mason, the CEO, didn’t reply to requests for remark. The firm referred calls to its common counsel, however she couldn’t be reached.

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In his electronic mail to workers, Mason stated he had “discovered certain internal control issues within the medical management department.”

“Well,” he wrote, “as a result of the manner in which those issues were disclosed to the health plans and regulatory agencies, we have been subject to unannounced audits by almost all of our health plan partners.”

The CEO stated two medical teams, AlphaCare and EHS (Employee Health Systems) Medical Group, have already terminated their contracts with SynerMed.

“I am heartbroken and saddened by these events after we have worked so hard to build our reputation as a company that operates with integrity,” Mason wrote in his electronic mail to workers.

Part of SynerMed’s progress had come from managing look after low-income seniors and folks with disabilities who’re eligible for each Medicare and Medicaid, referred to as Medi-Cal in California. The state has been on the forefront nationally in making an attempt to shift these “dual-eligible” sufferers into managed-care plans, that are paid a set fee per affected person to coordinate a variety of medical care.

A spokesman for the Medi-Cal program stated the company had no info to share on SynerMed.

SynerMed is a subsidiary of PAMC, Ltd., which additionally owns Pacific Alliance Medical Center in Los Angeles’ Chinatown. The hospital agreed to pay $42 million in June to settle federal allegations of improper kickbacks to referring physicians.

The U.S. Justice Department stated Pacific Alliance Medical Center agreed to the settlement to resolve a whistleblower lawsuit alleging that the hospital submitted false claims to Medi-Cal and Medicare. In a information launch on the time, federal officers stated the hospital and its house owners didn’t admit legal responsibility in settling the case.

The hospital is closing later this month. Officials there attributed the closure to the truth that the lease on the property is ending and it wasn’t financially possible to retrofit services to fulfill the state’s seismic necessities.

In an announcement to Kaiser Health News, PAMC stated “there is no connection between the closure of [the hospital] and any matters involving SynerMed. SynerMed is a wholly owned subsidiary that provides completely different services.”

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Chad Terhune: [email protected]”>[email protected], @chadterhune

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