Visalia Medical Clinic and Kaweah Health are breaking up – and Visalia Medical Clinic is set to head into the arms of Adventist Health by June 30, 2023, if not before. Kaweah Health and Visalia Medical Clinic (VMC) have been partners since 2015 through a medical foundation now known as Kaweah Health Medical Group.
“In early September, we were informed by leaders of Visalia Medical Clinic, our exclusive medical group partner to the Kaweah Health Medical Group, a California 1206(l) medical foundation wholly-owned by the Kaweah Delta Health Care District, that their Board had made a decision to end their partnership with us. While the 10-year Professional Services Agreement (PSA) was not up for renewal until June 30, 2025, VMC asked us to terminate the agreement early, by no later than June 30, 2023, while they negotiated a new PSA and partnership with a different entity,” a statement to the Voice from Kaweah Health reads.
“Our partnership with VMC will come to an end on June 30, 2023, but we will continue to reach out to our physician community to develop practice opportunities that support an ideal work environment, meet their financial needs, and position all of us for a successful future as well as continue to recruit much-needed physicians to our community and into other medical groups,” it continues.
Adventist Health officials were unable to provide comment by publication time. When a comment is received, this article will be updated. Its facilities span California, Oregon and Hawaii, including Tulare, Hanford, Reedley and Selma.
Partnering, then separating, with Kaweah Health
Lindsay Mann, the former CEO of Kaweah Health, told the Voice in 2015 that the partnership would help recruit new physicians to the area and increase the entities’ capacity to care for patients.
“The idea of the Medical Foundation, as we recruit physicians, is that we’ll actually improve the capacity to serve the patients who seek out care,” Mann said at the time.
Mann and Richard Strid, the former CEO of the Visalia Medical Clinic, heralded the partnership in a 2015 opinion piece announcing the move.
“Under the foundation, physicians will remain independent medical providers and VMC will continue to offer lab, imaging and other ancillary services. VMC’s employees will become employees of Kaweah Delta Health Care District, which may afford them new career opportunities,” the jointly-signed opinion piece read.
The partnership with Kaweah Health meant that VMC’s “personal property, payor agreements, and nonphysician staff, among other assets” were transferred to the Kaweah Health Medical Group foundation, though “physicians and mid-level providers” were directly employed by VMC, according to a financial document from Kaweah Health’s October board meeting.
The partnership grew tighter over the years, including when VMC shed its independent name and instead rebranded as Kaweah Health Medical Group in May 2021.
Visalia Medical Clinic began exploring its options in early 2022, Kaweah Health CEO Gary Herbst told the Voice in a written statement.
“We believe that VMC began exploring partnerships with other entities sometime back in January or February of 2022. On June 30, 2022, VMC informed me by letter that they were exploring partnerships with other entities, but did not explain why. In September 2022, they informed me that their Board made a unanimous decision to end its relationship with Kaweah Health by no later than June 30, 2023,” Herbst wrote.
“The agreement between Kaweah Health and VMC was not scheduled to expire until June 30, 2025 at which time it could be renewed for another ten years, like the original agreement, or for a different time period. Again, no reason was given for their decision to terminate the agreement early. At the time we were notified of their Board’s decision, they did not indicate that Adventist Health would be their future partner. This was confirmed at a later date,” he added.
Implications for patients and Kaweah Health
If the Visalia Medical Clinic leadership finalizes the partnership with Adventist, those assets and employees would be transferred to Adventist Health employment.
It would also give Adventist Health a much greater presence in Visalia – currently, the Adventist website only lists two physicians at a single office on N. Hall St.
Patients would need to check with their insurers, as VMC visits would be billed by Adventist Health – currently, billing is performed by Kaweah Health Medical Group.
“Insurance contracts are currently held in the name of the medical foundation, Kaweah Health Medical Group, and not the contracted medical group (VMC). If the Adventist Health medical foundation becomes VMC’s new partner, the insurance contracts would need to be in the name and control of the Adventist Health medical foundation,” Herbst wrote. “Since Adventist Health is not a Visalia-based entity, one or more insurance companies or health plans could consider them to be out-of-network or require some level of higher out-of-pocket costs to members.”
Herbst also said that Kaweah Health’s service offerings could be impacted depending upon where Visalia Medical Clinic and Adventist send their patients under the new partnership, and whether Adventist permits the Visalia Medical Clinic physicians to practice at Kaweah Health’s other clinics.
“We are greatly concerned that VMC providers will come under immense pressure by Adventist Health to refer their patients to Adventist Health facilities and services and away from Kaweah Health, except in emergency situations. If this proves true and Kaweah experiences a significant decline in patient volumes in a particular service, it could have a negative effect on our ability to continue providing that service,” Herbst wrote. “Also, VMC physicians currently work in a number of Kaweah Health Clinics and they may no longer be allowed to do so by Adventist Health who operates a large network of competing clinics.”