A Medicare Advantage plan that abruptly dumped a popular Tampa Bay area medical practice and sent consumers scrambling for new doctors recently is shutting down entirely at the end of the month after a judge determined that it is insolvent.
Physicians United Plan will be liquidated on July 1 under the order signed by a Leon County judge earlier this week. The Orlando-based plan — which has about 39,000 members statewide, including 1,200 in the Tampa Bay area — was running a $13 million deficit, according to court records.
In April, the company's board of directors said it needed a $30 million infusion of capital to avoid being placed in state receivership. That money never came.
The Florida Department of Financial Services will oversee the company's dismantling. The Centers for Medicare & Medicaid Services should begin notifying enrollees of their options in coming days.
A spokesman for the Centers for Medicare & Medicaid Services said the agency hasn't decided what to do. Enrollees might be given a special enrollment period to pick another privately run managed care plan. Or they could be moved into traditional, government-run Medicare until the next open enrollment season begins.
That's what happened last year when St. Petersburg-based Universal Health Care was seized by the state and enrollees who didn't pick a new plan by the liquidation date were put into original Medicare. Although original Medicare offers a wider range of providers than managed care plans, it requires members to pay 20 percent co-insurance, which is why many people in original Medicare carry supplemental plans. Managed care plans generally require lower out-of-pocket spending.
In March, the Tampa Bay Times reported that Physicians United had dropped a popular Valrico doctors practice from its provider list, less than a month after seniors were locked into their 2014 plan selections. Some of the nearly 200 affected patients told the Times they felt they'd been duped into signing up for the plan.
Physicians United had about 250 employees in the Orlando area, according to the Orlando Business Journal, which two years ago reported that the company was on a "growth spurt," expanding its work force and its office space.
The company's real estate arrangements appear to be part of its problem.
An investigator with the Florida Office of Insurance Regulation found on April 14 that the company had been wrongly reporting as assets $29 million that were actually encumbered to a division of Pacific Western Bank, court records show. Physicians United had put up those assets as collateral as part of a loan. On April 16, Physician United's board of directors signed an order admitting it needed a $30 million infusion of cash, the same day the company was served with a default notice from the bank.
Jodie Tillman can be reached at email@example.com.