Prospect Medical Group to Acquire Three Independent Physician Associations


Prospect Medical Group, a Southern California-based independent physician association (IPA), will acquire certain assets of CalCare IPA and Los Angeles Medical Center IPA, both of which serve Los Angeles County, and Vantage Medical Group in Riverside, San Bernardino, and San Diego. The transaction, which was entered into on April 22, is expected to close this summer subject to approvals from contracted health plans and other customary closing conditions.

Following the closing of the transaction, the three additional IPAs, representing more than 10,000 providers, will join Prospect’s existing networks, becoming one of the largest IPAs in the country with more than 20,000 providers in its network. The three additional IPAs currently hold health plan agreements with six payers responsible for approximately 130,000 members, most of whom are managed Medicaid/Medi-Cal members. The acquisition complements Prospect’s focus on providing care through the lifespan continuum for all members, across all products.

“This acquisition advances our goals of supporting independent physicians and helping them succeed in managed care environments,” said Dr. Mitchell Lew, President, Prospect Medical Holdings. “Now, more than ever, our community practitioners must ensure the highest quality of care and access to healthcare services for all.”

Prospect will ensure continuity of care for all patients and collaborate with health plans to ensure a seamless transition. Prospect Medical Group is managed by its affiliate, Prospect Medical Systems – a management services organization that currently uses its 25 years of experience to manage health plan-delegated downside risk for doctors and hospitals. Prospect currently owns or manages 25 IPAs across six states, with 500,000 members accessing a variety of insurance products. Leveraging its existing infrastructure, Prospect will ensure the highest quality operations and compliance for these acquired assets. Prospect anticipates hiring approximately 100 new staff members in Southern California to support these efforts.

“This is a great opportunity to expand Prospect’s system of coordinated care to a much larger market,” said Jim Brown, CEO, Prospect Medical Systems. “Our vision is that everyone has access to quality health care when they need it, and we look forward to partnering with a new network of physicians to make that a reality. Especially in a COVID-19 setting, collaboration between physicians and coordination of care is critically important. Financial models that we are able to employ, such as capitation and shared savings, can also provide security and opportunity to an unstable healthcare environment such as we have now.”

About Prospect Medical Group

The Prospect Medical Group IPAs are managed by Prospect Medical Systems, which develops, implements and manages a full range of support services. Prospect Medical Holdings, Inc. is the parent company of Prospect Medical Systems.