UC Irvine Doctors Begin Dropping HMOs

Seeking an improved bottom line, the physician group run by UC Irvine Medical Center has begun dropping HMO contracts and is planning to woo patients by becoming a center for medical referrals in Orange County.

The initial round of cancellations, which began in late August, will affect about 2,500 people and take effect late this year.

In coming months, more of the 15,000 patients whose HMOs let them enroll directly with the UC Irvine Medical Group’s 350 faculty and clinical staff physicians could be forced to sign up with outside physicians and get referrals to see UC Irvine doctors.

While the future of its commercial HMO business has not been determined, by next summer the medical group will be out of the Medicare HMO business, which is the primary care provider for about 700 patients, said Susan Rayburn, a vice president at UC Irvine.

The medical center physician’s group is reviewing all its HMO contracts on an individual basis in an effort to cut losses, Rayburn said.

UC Irvine was losing $800,000 a year on the Medicare HMO program alone, she said, and an additional $3.2 million on its commercial HMO business, which has 14,342 enrollees.