FPA'S FALL HAS HMOS SCRAMBLING TO ADJUST.

Byline: Ben Sullivan Daily News Staff Writer

Local HMOs are still scrambling to reassign thousands of patients and hundreds of physicians displaced last week by the bankruptcy of FPA Medical Management Inc.

Since the nation's No. 2 physician management group announced July 19 that it was unable to meet all of its financial obligations, managed care companies including Foundation Health Systems, CareAmerica Health Plans and WellPoint Health Networks - all based in Woodland Hills - have sought to cut their dependence on the firm.

San Diego-based FPA represents tens of thousands of physicians nationally and is paid by HMOs to care for their members. With FPA in financial trouble and thousands of FPA-affiliated physicians due back pay from the company, stability-seeking HMOs have been shifting members from FPA to other physician groups.

In many cases, members have been able to remain with the same doctor, because most physicians are affiliated with more than one group. In such a case, if a member's HMO cuts ties with FPA, their doctor essentially switches hats to one of the other physician groups to which he or she belongs.

In the rush to distance themselves from the faltering physician management group, some HMOs moved faster than others. CareAmerica Health Plans, a subsidiary of the nonprofit Blue Shield of California, canceled its contract with FPA three weeks ago when rumors first began to spread that FPA physicians were refusing to treat patients until they were paid by the company for past work.

``Our decision was that their administrative and financial difficulties could jeopardize our members' access to care, so we terminated the contract,'' said CareAmerica spokesman Ross Goldberg.

Though the switch was seamless for most of CareAmerica's 55,000 members, about 200 had to be assigned a new primary care physician and hospital.

Foundation Health Systems, which in California operates the HealthNet HMO, last week began shifting 24,000 members in Los Angeles and Ventura counties away from FPA. About 1,300 of those people are being reassigned to new physicians, the company said.

Prudential HealthCare is moving about 20,000 members away from FPA, though it is unclear how many will need new doctors, said Prudential spokeswoman Peggy Lyle.

At WellPoint's Blue Cross of California, about 10,000 of the company's 50,000 FPA-affiliated members will have to be reassigned to new doctors, according to Blue Cross spokeswoman Elise Anderson.

In addition, she said, Blue Cross has received inquiries from about 200 physicians left stranded by FPA's bankruptcy. The doctors, who depended on FPA for the bulk of their income, are now scrambling to affiliate themselves with other physician groups that contract with Blue Cross, Anderson said.

``We're trying to meet them as quickly as we can,'' Anderson said.

In at least one case, FPA's bankruptcy has been a dream come true for an HMO member. Northridge resident Gerald Lustig, a retired microscope repairman, had been wrestling with FPA management to approve treatment of several open sores on his legs resulting from Lustig's chronic diabetes.

``Whenever we went to get authorization from FPA, they refused it,'' said Lustig's wife, Janet. Knowing that untreated sores in diabetics can require amputation, the family had resigned themselves to paying for treatment out of pocket at a specialty wound center.

``That's when we found out FPA went bankrupt,'' Janet Lustig said. The family's HMO, Los Angeles-based Maxicare, reassigned them to a new physician with Facey Medical Group. That doctor admitted Gerald to a local hospital and began aggressive treatment of the sores and several other ailments afflicting him, she said.