<PAGE> 1
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 19, 1998
FPA Medical Management, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-24276 33-0604264
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3636 Nobel Drive
San Diego, CA 92122
(Address of principal executive offices) (Zip Code)
(619) 453-1000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events.
As previously reported on a Current Report on Form 8-K, on
July 19, 1998 and various dates thereafter through August 7, 1998, the
Registrant and various of its subsidiaries and affiliates (collectively, the
"Debtors") filed for protection under Chapter 11 in the United States District
Court for the District of Delaware (the "Bankruptcy Court"). The cases have been
consolidated for the purpose of joint administration and have been assigned to
Chief United States Bankruptcy Judge Peter J. Walsh. The consolidated caption
is: In re FPA Medical Management, Inc., et al. Debtors, Case Nos. 98-1596
through 98-1685.
On October 19, 1998, FPA Medical Management, Inc. and various
of its subsidiaries and affiliates filed with the United States Bankruptcy Court
for the District of Delaware its monthly operating report for the period from
August 31, 1998 through September 25, 1998 (the "MOR"), which is attached
hereto as Exhibit 99.1.(1)
(1) The attachments and exhibits referenced in the MOR are not attached as part
of Exhibit 99.1, but are available at the Office of the United States
Trustee and the Bankruptcy Court. In addition, the Registrant agrees that it
will furnish a copy of any omitted schedule or similar attachment to the
Commission upon its request.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Monthly Operating Report for the period from
August 31, 1998 through September 25, 1998.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
FPA MEDICAL MANAGEMENT, INC.
By:/s/ Stephen J. Dresnick
-------------------------------------
Date: November 10, 1998 Stephen J. Dresnick
Chairman and Chief Executive Officer
3
<PAGE> 4
EXHIBIT INDEX
Number Exhibit
- ------ -------
99.1 Monthly Operating Report for the period from August
31, 1998 through September 25, 1998.
4
<PAGE> 1
EXHIBIT 99.1
Debtor: FPA MEDICAL MANAGEMENT, INC.
- ------
Case Number: 98-01596PJW THROUGH 98-01685PJW
- -----------
Notes to Monthly Operating Report for the period August 31, 1998 through
September 25, 1998, "Required Attachments."
1. Depository Tax Receipts for payroll tax deposits into tax trust accounts are
included for the month of September, as well as for the prior period July 19,
1998 through August 28, 1998.
2. Copies of most of the Debtors' bank statements for the month of September are
attached; copies of the balance of the September statements not yet received
from the Banks and/or Debtors will be forwarded upon receipt. In addition,
copies of unsubmitted Debtors' bank statements in the prior period for the
months of July and August are attached.
3. The Debtors' most recently filed Income Tax Return was included in the prior
period (July 19-August 28, 1998) filing with the Office of the United States
Trustee.
4. The Debtors' most recent Annual Financial Statements prepared by Accountant
were included in the prior period (July 19-August 28, 1998) filing with the
Office of the United States Trustee.
<PAGE> 2
FPA MEDICAL MANAGEMENT, INC.
MATRIX OF REQUIRED ATTACHMENTS/BANK STATEMENTS
<TABLE>
<CAPTION>
SEPTEMBER AUGUST JULY
BANK BANK BANK
DEBTORS STATEMENTS STATEMENTS STATEMENTS COMMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Core Business Units:
Sterling Healthcare Group, Inc. x
California Axminster x x
San Antonio (Gonzaba) x
Meridian x
Florida Humana & Clinics x
Health Partners, Inc. x x x September
Bank
Statements
received for
four accounts
Non-Core Business Units
Orange Coast x
North Carolina x x
Illinois MSO x x x
Atlanta Women's Specialists
San Diego Corporate x x
Kansas City x
</TABLE>
<PAGE> 3
FPA Medical Management, Inc.
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
Projected (1) Actual (1) Difference
----------------------------------------------------
A B C=B-A
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Initial Cash Balance $ 1,834,400 $ 5,837,888 4,003,488
Cash Receipts:
Fee For Service Billings $ 17,666,200 $ 12,989,926 (4,676,274)
Claims & Capitation $ 22,043,167 $ 12,449,138 (9,594,029)
Reimbursement $ -- $ 1,726,975 1,726,975
Medicare & Collections $ 500,000 $ 386,235 (113,765)
- -----------------------------------------------------------------------------------------
Total Cash Receipts $ 40,209,367 $ 27,552,274 (12,657,093)
Less: Cash Disbursements:
Employee & Physician Payroll $ 18,247,562 $ 22,184,553 3,936,991
Catch-up payments to Doctors $ 228,822 $ -- (228,822)
Insurance $ 456,072 $ 709,225 253,153
Claims & Capitation $ 14,240,449 $ 3,104,925 (11,135,524)
Patient Refunds $ 260,000 $ 277,453 17,453
Rent $ 1,139,828 $ 1,388,212 248,384
Utilities $ 157,616 $ 450,933 293,317
Medical Supply $ 345,000 $ 443,213 98,213
Bank Lock-Box Account Fees $ 35,000 $ -- (35,000)
Other $ 6,462,533 $ 2,530,373 (3,932,160)
- -----------------------------------------------------------------------------------------
Total Cash Disbursements $ 41,572,882 $ 31,088,886 (10,483,996)
Net Cash Flow $ (1,363,515) $ (3,536,612) (2,173,097)
Financing Charges (2) $ (369,183) $ (307,756) 61,427
Stop Loss Insurance (2) $ (100,000) $ (46,770) 53,230
Retention Costs $ -- $ -- --
Utility Company Deposits (2) $ -- $ (250,000) (250,000)
Professional Fee Retainers $ -- $ -- --
Professional Fees (2) $ (600,000) $ (898,953) (298,953)
Repayment to HPI (2) $ -- $ (0) (0)
Capital Expenditures (2) $ -- $ (50,000) (50,000)
Security Deposit (2) $ -- $ 250,000 250,000
DIP Loan Proceeds (3) $ 3,188,544 $ 5,000,000 1,811,456
Ending Cash Balance $ 2,590,245 $ 5,997,797 3,407,551
</TABLE>
1) The projected data reflected herein is based upon the Final DIP Budget
submitted to the Court on July 20, 1998, as amended on August 28, 1998. The
actual data reflected herein is based upon the actual data reported to the Bank
Group in the Weekly Cash Flow Budgets.
2) Amounts for Financing Charges, Stop Loss Insurance, Utility Company Deposits,
Professional Fees, Capital Expenditures and Security Deposits are generally
reflected at the FPA Corporate level only. Additionally, Intercompany transfers
occurring between the Sterling Healthcare Group, Inc. and FPA Corporate are not
separately reflected herein.
3) The amount is exclusive of $22,000,000 received by the Debtor and Utilized to
repay a prepetition secured claim known as the "Sterling Loan Facility" pursuant
to an Order of Court.
<PAGE> 4
STERLING HEALTHCARE GROUP, INC.
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
---------------------------------------------------
Projected Actual Difference
------------ ------------ ------------
A B C=B-A
------------ ------------ ------------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ 6,229,885 $ 3,074,121 (3,155,764)
Cash Receipts:
Fee For Service Billings $ 15,000,000 $ 10,453,115 (4,546,885)
Claims & Capitation $ -- $ -- --
Reimbursement $ -- $ -- --
Medicare & Collections $ 500,000 $ 386,235 (113,765)
------------ ------------ ------------
TOTAL CASH RECEIPTS $ 15,000,000 $ 10,839,350 (4,160,650)
Less: Cash Disbursements:
Employee & Physician Payroll $ 12,651,584 $ 12,386,184 (265,400)
Catch-up payments to Doctors $ -- $ -- --
Insurance $ 66,072 $ 246,317 180,245
Claims & Capitation $ -- $ -- --
Patient Refunds $ 220,000 $ 118,045 (101,955)
Rent $ 116,806 $ 31,655 (85,151)
Utilities $ 60,000 $ 34,749 (25,251)
Bank Lock Box $ 35,000 $ -- (35,000)
Medical Supply $ -- $ -- --
Other $ 1,386,590 $ 1,125,549 (261,041)
------------ ------------ ------------
Total Cash Disbursements 14,536,052 $ 13,942,500 (593,552)
Financing Charges $ -- $ -- --
Net DIP Advance $ -- $ 5,000,000 5,000,000
Net Cash Flow 963,948 $ (3,103,149) (4,067,097)
Intercompany Transfers $ -- $ (1,672,324) (1,672,324)
ENDING CASH BALANCE 7,193,833 $ 3,298,648 (3,895,185)
------------ ------------ ------------
</TABLE>
<PAGE> 5
CALIFORNIA (AXMINSTER)
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
--------------------------------------------
Projected Actual Difference
---------- ---------- ----------
A B C=B-A
---------- ---------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ 750 $ 560,446 559,696
Cash Receipts:
Fee For Service Billings $ 66,000 $ 68,084 2,084
Claims & Capitation $1,128,000 $ 737,622 (390,378)
Reimbursement $ -- $ -- --
Medicare & Collections $ -- $ -- --
---------- ---------- ----------
TOTAL CASH RECEIPTS $1,194,000 $ 805,705 (388,295)
Less: Cash Disbursements:
Employee & Physician Payroll $ 488,000 $ 375,881 (112,119)
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ -- --
Claims & Capitation $ 377,000 $ 182,401 (194,599)
Patient Refunds $ -- $ -- --
Rent $ 105,000 $ 115,989 10,989
Utilities $ 18,000 $ 2,668 (15,332)
Bank Lock Box $ -- $ -- --
Medical Supply $ 40,000 $ 10,292 (29,708)
Other $ 16,000 $ 111,214 95,214
---------- ---------- ----------
Total Cash Disbursements $1,044,000 $ 798,445 (245,555)
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ 150,000 $ 7,261 (142,739)
Intercompany Transfers $ -- $ 429,118 429,118
ENDING CASH BALANCE $ 150,750 $ 996,825 846,075
---------- ---------- ----------
</TABLE>
<PAGE> 6
CORNERSTONE
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
------------------------------------------
Projected Actual Difference
--------- --------- ---------
A B C=B-A
--------- --------- ---------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ 162,250 $ -- (162,250)
Cash Receipts:
Fee For Service Billings $ 354,000 $ 312,529 (41,471)
Claims & Capitation $ -- $ -- --
Reimbursement $ -- $ -- --
Medicare & Collections $ -- $ -- --
--------- --------- ---------
TOTAL CASH RECEIPTS $ 354,000 $ 312,529 (41,471)
Less: Cash Disbursements:
Employee & Physician Payroll $ 219,000 $ 145,209 (73,791)
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ -- --
Claims & Capitation $ -- $ -- --
Patient Refunds $ -- $ -- --
Rent $ 15,000 $ 16,160 1,160
Utilities $ 6,500 $ 4,801 (1,699)
Bank Lock Box $ -- $ -- --
Medical Supply $ -- $ -- --
Other $ 81,000 $ 1,603 (79,397)
--------- --------- ---------
Total Cash Disbursements $ 321,500 $ 167,774 (153,726)
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ 32,500 $ 144,756 112,256
Intercompany Transfers $ -- $(144,756) (144,756)
ENDING CASH BALANCE $ 194,750 $ (0) (194,750)
--------- --------- ---------
</TABLE>
<PAGE> 7
FLORIDA (CLINICS & HUMANA)
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
-------------------------------------------------
Projected Actual Difference
----------- ----------- -----------
A B C=B-A
----------- ----------- -----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $(3,837,019) $ -- 3,837,019
Cash Receipts:
Fee For Service Billings $ 746,952 $ 926,626 179,674
Claims & Capitation $ 7,261,691 $ 2,370,530 (4,891,161)
Reimbursement $ -- --
Medicare & Collections $ -- --
----------- ----------- -----------
TOTAL CASH RECEIPTS $ 8,008,643 $ 3,297,156 (4,711,487)
Less: Cash Disbursements:
Employee & Physician Payroll $ -- $ 2,451,178 2,451,178
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ -- --
Claims & Capitation $ 4,676,292 $ 18,018 (4,658,274)
Patient Refunds $ -- $ 3,807 3,807
Rent $ -- $ 236,910 236,910
Utilities $ -- $ 191,862 191,862
Bank Lock Box $ -- $ -- --
Medical Supply $ -- $ 113,968 113,968
Other $ 3,563,672 $ 363,299 (3,200,373)
----------- ----------- -----------
Total Cash Disbursements $ 8,239,964 $ 3,379,041 (4,860,923)
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ (231,321) $ (81,886) 149,435
Intercompany Transfers $ -- $ 81,886 81,886
ENDING CASH BALANCE $(4,068,340) $ (0) 4,068,340
----------- ----------- -----------
</TABLE>
<PAGE> 8
SAN ANTONIO (GONZABA)
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
-------------------------------------------------
Projected Actual Difference
----------- ----------- -----------
A B C=B-A
----------- ----------- -----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ (623,500) $ -- 623,500
Cash Receipts:
Fee For Service Billings $ 67,000 $ 37,106 (29,894)
Claims & Capitation $ 1,583,000 $ 885,625 (697,375)
Reimbursement $ -- $ -- --
Medicare & Collections $ -- $ -- --
----------- ----------- -----------
TOTAL CASH RECEIPTS $ 1,650,000 $ 922,731 (727,269)
Less: Cash Disbursements:
Employee & Physician Payroll $ 750,000 $ 1,250,137 500,137
Catch-up payments to Doctors $ -- $ -- --
Insurance $ 32,000 $ -- (32,000)
Claims & Capitation $ 429,000 $ 166,172 (262,828)
Patient Refunds $ -- $ 4,530 4,530
Rent $ 126,000 $ 123,066 (2,935)
Utilities $ 27,000 $ 40,563 13,563
Bank Lock Box $ -- $ -- --
Medical Supply $ 100,000 $ 113,598 13,598
Other $ 25,000 $ 80,656 55,656
----------- ----------- -----------
Total Cash Disbursements 1,489,000 1,778,723 289,723
Financing Charges $ -- $ -- --
Net DIP Advance $ -- $ -- --
Net Cash Flow 161,000 $ (855,992) (1,016,992)
Intercompany Transfers $ -- $ 855,992 855,992
ENDING CASH BALANCE $ (462,500) $ -- $ 462,500
----------- ----------- -----------
</TABLE>
<PAGE> 9
MERIDIAN
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
-------------------------------------------------
Projected Actual Difference
----------- ----------- -----------
A B C=B-A
----------- ----------- -----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ (369,184) $ 575,008 944,192
Cash Receipts:
Fee For Service Billings $ 500,000 $ 325,563 (174,437)
Claims & Capitation $ 2,143,671 $ 2,241,939 98,268
Reimbursement $ -- --
Medicare & Collections $ -- --
----------- ----------- -----------
TOTAL CASH RECEIPTS $ 2,643,671 $ 2,567,502 (76,169)
Less: Cash Disbursements:
Employee & Physician Payroll $ 1,750,000 $ 1,655,620 (94,380)
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ -- --
Claims & Capitation $ 1,050,000 $ 1,029,810 (20,190)
Patient Refunds $ -- $ 813 813
Rent $ 316,000 $ 273,856 (42,144)
Utilities $ -- $ 161,985 161,985
Medical Supply $ -- $ 197,176 197,176
Other $ 340,000 $ 191,692 (148,308)
----------- ----------- -----------
Total Cash Disbursements $ 3,456,000 $ 3,510,952 54,952
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ (812,329) $ (943,450) (131,121)
Intercompany Transfers $ -- $ 719,382 719,382
ENDING CASH BALANCE $(1,181,513) $ 350,940 1,532,453
----------- ----------- -----------
</TABLE>
<PAGE> 10
TENTATIVES & CLOSURES
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
----------------------------------------------------
Projected Actual Difference
------------ ------------ ------------
A B C=B-A
------------ ------------ ------------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ (9,382,491) $ 1,628,313 11,010,805
Cash Receipts:
Fee For Service Billings $ 932,248 $ 866,710 (65,538)
Claims & Capitation $ 9,926,805 $ 6,213,422 (3,713,383)
Reimbursement $ -- $ 1,726,975 1,726,975
Medicare & Collections $ -- $ -- --
------------ ------------ ------------
TOTAL CASH RECEIPTS $ 10,859,053 $ 8,807,107 (2,051,946)
Less: Cash Disbursements:
Employee & Physician Payroll $ 2,388,978 $ 3,920,344 1,531,365
Catch-up payments to Doctors $ 228,822 $ -- (228,822)
Insurance $ 358,000 $ 462,908 104,908
Claims & Capitation $ 7,708,157 $ 1,708,524 (5,999,633)
Patient Refunds $ 40,000 $ 150,258 110,258
Rent $ 461,022 $ 590,576 129,554
Utilities $ 46,116 $ 14,304 (31,812)
Bank Lock Box $ -- $ -- --
Medical Supply $ 205,000 $ 8,179 (196,821)
Other $ 1,050,271 $ 656,360 (393,911)
------------ ------------ ------------
Total Cash Disbursements $ 12,486,366 $ 7,511,452 (4,974,914)
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ (1,627,313) $ 1,295,654 2,922,968
Intercompany Transfers $ -- $ (1,572,604) (1,572,604)
ENDING CASH BALANCE $(11,009,804) $ 1,351,364 12,361,168
------------ ------------ ------------
</TABLE>
Source: Information reflected above was obtained from the books and records of
FPA Medical Management Group, Inc.
<PAGE> 11
HEALTH PARTNERS, INC
DIP Budget
DIP Projected vs. Actual Cash Flows
August 31 to September 25, 1998
<TABLE>
<CAPTION>
For the Period 8/31/98 to 9/25/98
--------------------------------------------
Projected Actual Difference
---------- ---------- ----------
A B C=B-A
---------- ---------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ -- $2,932,872 $ --
Cash Receipts:
Fee For Service Billings $ -- $4,353,989 $ --
Claims & Capitation $ -- $3,722,904 $ --
Reimbursement $ -- $ -- $ --
Medicare & Collections $ -- $ -- $ --
---------- ---------- ----------
TOTAL CASH RECEIPTS $ -- $8,076,893 $ --
Less: Cash Disbursements:
Employee & Physician Payroll $ -- $2,699,273 $ --
Catch-up payments to Doctors $ -- $ 215,433 $ --
Insurance $ -- $ 250,767 $ --
Claims & Capitation $ -- $1,366,307 $ --
Patient Refunds $ -- $ 7,260 $ --
Rent $ -- $ 406,168 $ --
Utilities $ -- $ 93,199 $ --
Medical Supply $ -- $ 175,100 $ --
Other $ -- $ 768,657 $ --
---------- ---------- ----------
Total Cash Disbursements -- $5,982,164 --
Agreed Cash Adjustments $ -- $ -- $ --
Less: Interest $ -- $ -- $ --
Net Cash Flow -- $2,094,729 --
Intercompany Transfers $ -- $ -- $ --
ENDING CASH BALANCE -- $5,027,601 --
---------- ---------- ----------
</TABLE>
GENERAL: Health Partners Inc. is reported for cash flow purposes as a stand
alone entity. These transactions are not included as a part of the FPA Medical
Management, Inc. roll-up.
