St. Joseph Buys Contracts to Serve 50,000 O.C. Patients

St. Joseph Health System, moving to regain control of local managed care business, said last week that it bought the contracts to provide health-care services to 50,000 Orange County residents from bankrupt FPA Medical Management Inc. of San Diego. Terms were not disclosed.

The acquisition boosts the number of patients on health plans it negotiates to 350,000, an official said.

The contracts assure St. Joseph of business because all of the physicians serving the 50,000 patients send them to St. Joseph’s hospitals in Orange, Fullerton or Mission Viejo.

Earlier this year, St. Joseph faced the possibility of losing control of the business when it lost out in a bidding contest with FPA, said Larry Ainsworth, St. Joseph’s chief executive.

FPA bought Orange Coast Managed Care Services, a management company that had negotiated the contracts for two local doctor organizations.

FPA promised to allow the doctors--50 in a medical group and 400 in a loose network--to continue practicing at St. Joseph facilities, Ainsworth said. But St. Joseph worried that FPA might eventually direct the business to a competing hospital network.

In July, FPA filed for financial reorganization in federal Bankruptcy Court. Ainsworth said St. Joseph made the purchase this week for an amount less than its original offer earlier this year.