PacifiCare Still Awaiting State’s OK on FHP Merger

Another deadline has come and gone, and PacifiCare Health Systems Inc. still hasn’t won approval to absorb the California operations of the former FHP International Corp.

Earlier this year, the state’s Department of Corporations, which regulates health maintenance organizations, let Cypress-based PacifiCare proceed with plans to purchase former rival FHP. But the agency has yet to let PacifiCare merge FHP’s California plan into PacifiCare’s.

In late June, PacifiCare told analysts it expected regulators to OK merger of the California plans by mid-July. At the time, the company was explaining unexpected glitches in its second-quarter financial results and blaming, in part, unanticipated troubles it inherited from FHP.

However, a spokeswoman for Keith Bishop, the state agency’s commissioner, says he won’t sign off until he’s satisfied with the terms. She didn’t elaborate on possible sticking points in discussions.

One point for FHP plan members: The agency said earlier this year that PacifiCare intended to keep “all” of the former FHP physician groups available. The agency also said PacifiCare promised that FHP members would not have to change doctors.

However, it remains to be seen how many individual physicians who served FHP in the past will stick with PacifiCare.

Thus far, PacifiCare has lined up new contracts with 24 of the 70 physician groups that served FHP--but not PacifiCare--before the merger. A PacifiCare spokeswoman said the company intends to finish contracting with as many of the remaining 46 groups as possible by the end of this year.

Still, she said, the company hasn’t kept track of how many individual FHP doctors have seen fit to sign contracts with PacifiCare.

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Barbara Marsh covers health care for The Times. She can be reached at (714) 966-7762 and at barbara.marsh@latimes.com