Medical Unit to Close, File for Bankruptcy
Physician Associates of Oakview Inc., strapped with about $2.2 million in debt, will shut down early next week, forcing many of its 250 doctors to find another medical group.
At a shareholders meeting earlier this week, the Westlake company’s doctors voted to file for Chapter 7 bankruptcy, according to Jeffrey Hagen, Oakview’s Encino-based attorney.
“They have what they perceived to be an insurmountable amount of debt,” he said. “They didn’t think they could realistically work their way out of that size of a debt.”
The cost of providing services exceeded what the HMOs paid the doctors in flat fees, Hagen said. Money is owed to trade suppliers, specialty providers and Horizon Health Care, which financially backed the medical group’s predecessor.
The closure of Oakview will have little effect on its 10,000 patients because they will not be forced to change doctors or insurance companies.
“Patients shouldn’t be concerned they’re going to be left out,” said Thousand Oaks cardiologist Richard Green, one of the Oakview doctors. “[For] all the physicians involved, the primary concern is health care.”
If patients want to remain with a favorite doctor, they only have to find out which new medical group he or she belongs to before signing on, he said.
“It’s the patient’s choice,” Green said.
Doctors who switch to a different medical group will notify their patients of the change, Hagan said.
“It’s just paperwork,” he said. “The patient is hardly affected at all. They’ll certainly be invited to stay with their own doctor.”
Some Oakview doctors already belong to more than one medical group. The cost of medical care will remain stable because the insurance companies pay doctors on a flat-rate monthly basis regardless of which medical group they belong to, Hagen said.
Oakview Medical Group formed in 1978 but reorganized years later as Physicians Associates of Oakview, with many of the same doctors, he said.
Patients will only be reassigned to a new medical group if they do not choose one themselves.
