NU Online News Service, June 4, 10:25 a.m. – Federal and state officials have put a well-known insurance receiver, Mark Abernathy, in charge of untangling the financial problems of Maxicare Health Plans Inc., Los Angeles, in California.

Maxicare?fs California subsidiary filed for Chapter 11 bankruptcy court protection May 25 in Los Angeles.

The California Department of Managed Health Care has appointed Abernathy to act as conservator, and U.S. Bankruptcy Judge Vincent Zurzolo approved a stipulation agreement appointing Abernathy to serve as the examiner of the debtor in the bankruptcy proceedings.

Abernathy is a director at Navigant Consulting Inc., Tampa, Fla.

The bankruptcy court agreement leaves Maxicare?fs own executives in charge of day-to-day management of the California subsidiary. The executives are supposed to continue their efforts to sell the subsidiary and its group member contracts.

Maxicare?fs California subsidiary “continues to be fully functional,” Paul Dupee, Maxicare?fs chairman, said in a statement. “Its staff is committed to avoiding any disruption in service to our members.”

Maxicare covers the health of 254,000 California residents. It also runs managed care plans in Indiana.

The parent company is not subject to bankruptcy proceedings, but Indiana officials put the Indiana operations in rehabilitation in May, according to Maxicare.

The California managed care department says it decided to seek the appointment of a conservator for the Maxicare California subsidiary after finding that the subsidiary was violating state tangible net equity standards, state quality reporting requirements, and state prompt payment laws.

“A sampling of consumer appeals filed with Maxicare found that 25% of the cases reviewed exceeded department?fs required 30-day time frame for resolution,” the department says.

The department gives more information about the Maxicare California subsidiary on its Web site, at http://www.dmhc.ca.gov/press/release/dmhc/20010525.asp