Physicians United Plan, a Medicare Advantage HMO, received their court order to shut down at the end of the month. The company will be liquidated on July 1st under the order signed by a Leon County judge. The ruling earlier this week affects affects approximately 39,000 members in Florida.
Physicians United Plan was running a $13 million deficit, according to court records. The board of directors requested a $30 million infusion of capital in April to avoid being placed in state receivership. They never received this funding and dropped a popular Tampa Bay area medical practice, forcing patients to scramble to find new doctors, but it wasn’t enough. The judge determined the company to be insolvent.
The Centers for Medicare & Medicaid Services (CMS) will notify enrollees in this plan about their choices soon. In the past, enrollees of terminated plans have been given a special enrollment period to pick another Medicare Advantage plan. Enrollees may also have the option to switch back to Original Medicare.
According to the Orlando Business Journal, Physicians United had about 250 employees in the Orlando area. Two years ago the Journal reported that the company was expanding both its work force and its office space. Its real estate holding were apparently part of its problem.
Court records show that on April 14, the Florida Office of Insurance Regulation learned that the company had wrongly report real estate assets totaling $29 million that were in fact encumbered by Pacific Western Bank. Physicians United used the assets as collateral on a loan. The bank served Physicians United with a notice of default on April 16.