Roughly 270 employees of Golden Shore Medical Group clinics across the state received notices they would be laid off by mid-February after Long Beach-based Molina HealthCare canceled the operator’s contract to treat patients.
The clinics, operated by the son of Molina HealthCare’s founder, serve about 80,000 patients statewide. Two of the clinics are located in Long Beach.
Golden Shore filed a required notice of the planned layoffs with the state Employment Development Department on Friday, Dec. 28. The so-called WARN notices giving employees 60 days to prepare were sent to all of the clinics’ employees, from medical to administrative staff.
The impending closure of Golden Shore is the latest development in an escalating feud between Dr. J. Mario Molina and Molina HealthCare, which was founded by Molina’s father initially as a clinic operation in 1980. It is now an insurance company that primarily caters to low-income or disabled patients who qualify for Medi-Cal.
The Molina HealthCare board of directors fired Molina and his brother John Molina in May 2017, citing poor financial performance. (John Molina is a partner in Pacific6, which is the parent company of the Long Beach Post.)
Soon after he was fired, Mario Molina began negotiations to take over operation of 16 of the company’s clinics, which are located in Southern California and Sacramento.
Last month Mario Molina posted a note on social media saying thousands of patients would possibly have to change doctors—or insurance companies—after Molina HealthCare cancelled its contract with Golden Shore. A spokeswoman for Molina HealthCare said at the time in a statement that Golden Shore had requested unreasonable reimbursement rates for medical services it provides to patients.
The cancellation of the contract gutted Golden Shore’s client base, as roughly 94 percent of its patients are insured through Molina HealthCare.
“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 January 31, 2019,” the letter to employees said.
Molina said in the letter that Golden Shore has signed letters of intent to transition operations to clinic operators AltaMed and Wellspace so that patients do not lose access to medical care.
“It looks like we’re going to go out of business, but my goal is to try to transition the patients so they can keep their doctors,” Molina said in a phone interview Wednesday.
He is also hoping that employees may be offered jobs by the new operators.
The bulk of the staff will be laid off from Golden Shore by Feb. 15, according to the letter. Employees will receive two weeks’ pay, health benefits through March 31 and access to outplacement assistance.
“Some of these employees have been with us for 20 years,” Molina said. “It’s been hard on everyone.”
A spokeswoman for Molina HealthCare did not immediately respond for comment.
Melissa Evans is the managing editor of the Long Beach Post. Reach her at [email protected], @melissaevansLBP or 562-437-5814.
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