California medical group to shut down after Molina cancels contract

South Pasadena, Calif.-based Golden Shore Medical Group, which includes 16 clinics, plans to shut down Jan. 31.

Mario Molina, MD, acquired the clinics from Molina Healthcare after he was unexpectedly fired in 2017. Dr. Molina and the company are still at odds, and Molina has decided to let its contract with Golden Shore Medical Group lapse as of Feb. 1.

"It appears to be not so much a business decision, but a spiteful, personal decision. They're effectively trying to drive us out of business," Dr. Molina told the Los Angeles Times in December regarding the impasse in contract negotiations with Molina.

In a letter accompanying the WARN notice, Dr. Molina cited the loss of the Molina contract as the reason Golden Shore Medical Group is shutting down.

"Our story began nearly 38 years ago with one clinic and the pursuit to be an exemplary organization, " Dr. Molina wrote. "But as you are aware, our aspirations have been cut short due to the loss of the Molina Healthcare contract. Although we had hoped to weather the storm, the business decline as a result of the loss of the agreement makes it very difficult to justify keeping Golden Shore Medical Group open beyond Jan. 31, 2019."

Golden Shore Medical Group's leadership team is exploring options to transfer ownership of the clinics. The group has signed letters of intent to sell its 12 clinics in Southern California to AltaMed and to sell its three clinics in the northern part of the state to WellSpace. "While there are no guarantees on this front, we will keep you abreast of any developments," the letter accompanying the WARN notice states.

Golden Shore's employees will be released from their duties Feb. 15. The 270 employees affected by the shutdown will receive a severance package of two weeks of standard pay and healthcare coverage benefits through March 31.

More articles on healthcare finance:

Average hospital expenses per inpatient day across 50 states
Pennsylvania hospital closure will result in 505 layoffs
Physicians at 3 Pennsylvania hospitals mull legal action after working weeks without pay

Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars