<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): September 16, 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 September 16, 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 July 19, 1998 through August 28, 1998, which is attached hereto
as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Monthly Operating Report for the period from
July 19, 1998 through August 28, 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: October 7, 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 July 19, 1998
through August 28, 1998.
4
<PAGE> 1
Exhibit 99.1
FPA Medical Management Inc.
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
---------------------------------------------
For the Period 7/19 to 8/24/98
---------------------------------------------
Projected (1) Actual (1) Difference
---------------------------------------------
A B C = B - A
---------------------------------------------
<S> <C> <C> <C>
BEGINNING CASH BALANCE $ 1,718,745 $ 1,322,908 $ (395,837)
Cash Receipts:
- --------------
Fee For Service Billings 25,525,507 23,477,154 (2,048,353)
Claims & Capitation 25,147,157 18,506,124 (6,641,033)
Reimbursement - 2,377,522 2,377,522
Medicare A/R Collections - - -
---------------------------------------------
Total Cash Receipts 50,672,664 44,360,800 (6,311,864)
Cash Disbursements:
- -------------------
Employee/Physician Payroll 27,090,333 33,078,710 5,988,378
Catch-up payments to Doctors 228,822 - (228,822)
Insurance (2) 1,464,950 2,098,081 633,131
Claims & Capitation 17,839,742 5,523,442 (12,316,300)
Patient Refunds 395,000 285,460 (109,540)
Rent 1,914,339 2,261,826 347,487
Utilities 190,326 147,719 (42,607)
Bank Lock-Box Account Fees 17,500 229 (17,272)
Medical Supplies 395,300 190,699 (204,601)
Trade Accounts Payable 11,555,407 4,160,016 (7,395,390)
---------------------------------------------
Total Cash Disbursements 61,091,718 47,746,181 (13,345,537)
Net Cash Flow from Operations (10,419,054) (3,385,381) 7,033,673
Financing Charges (3) (2,080,274) (1,577,233) 503,041
Stop Loss Insurance (3) (475,000) (476,091) (1,091)
Retention Costs - - -
Utility Company Deposits (43,523) - 43,523
Professional Fee Retainers - - -
Professional Fees (3) - (146,315) (146,315)
Repayment to HPI (3) (1,000,000) (1,000,000) -
DIP Loan Proceeds (4) 14,132,038 11,100,000 (3,032,038)
ENDING CASH BALANCE $ 1,832,932 $ 5,837,888 $ 4,004,956
---------------------------------------------
</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) Insurance expense includes $1,484,789 expended in the week of 7/27 to
7/31/98 for Medical Malpractice expense incurred at the FPA Corporate
level only.
3) Amounts for Financing Charges, Stop Loss Insurance, and Professional Fees
are generally reflected at the FPA Corporate level only. Additionally,
Intercompany transfers occuring between Sterling Healthcare Group, Inc.and
FPA Corporate are not separately reflected herein.
4) 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> 2
Sterling Healthcare Group, Inc.
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
-------------------------------------------------------
For the Period 7/19 to 8/24/98
-------------------------------------------------------
Projected Actual Difference
-------------------------------------------------------
A B C = B - A
-------------------------------------------------------
<S> <C> <C> <C>
BEGINNING CASH BALANCE $ 247,847 $ (2,457,911) $ (2,705,758)
Cash Receipts:
- --------------
Fee For Service Billings 21,400,000 18,193,369 (3,206,631)
Claims & Capitation - - -
Reimbursement - - -
Medicare A/R Collections - - -
-------------------------------------------------------
Total Cash Receipts 21,400,000 18,193,369 (3,206,631)
Cash Disbursements:
- -------------------
Employee/Physician Payroll 13,057,084 12,534,215 (522,869)
Catch-up payments to Doctors - -
Insurance 66,072 6,770 (59,302)
Claims & Capitation - -
Patient Refunds 335,000 284,309 (50,691)
Rent 116,806 115,287 (1,519)
Utilities 30,000 31,181 1,181
Bank Lock-Box Account Fees 17,500 - (17,500)
Medical Supplies - 617 617
Trade Accounts Payable 2,302,500 2,676,872 374,372
-------------------------------------------------------
Total Cash Disbursements 15,924,962 15,649,250 (275,712)
Net Cash Flow from Operations 5,475,038 2,544,118 (2,930,920)
Net DIP Advance - 6,437,928 6,437,928
Financing Charges - (127,278) (127,278)
Intercompany Transfer 507,000 (3,322,739) (3,829,739)
DIP Loan Proceeds - - -
ENDING CASH BALANCE $ 2,844,347 $ 3,074,119 $ 229,772
-------------------------------------------------------
</TABLE>
<PAGE> 3
Calif. (Axminster)
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
-------------------------------------------------------
For the Period 7/19 to 8/24/98
-------------------------------------------------------
Projected Actual Difference
-------------------------------------------------------
A B C = B - A
-------------------------------------------------------
<S> <C> <C> <C>
BEGINNING CASH BALANCE $ (6,500) $ 1,723,261 $ 1,729,761
Cash Receipts:
Fee For Service Billings 99,000 411,608 312,608
Claims & Capitation 1,386,000 1,378,655 (7,345)
Reimbursement - - -
Medicare A/R Collections - - -
-------------------------------------------------------
Total Cash Receipts 1,485,000 1,790,263 305,263
Cash Disbursements:
Employee/Physician Payroll 732,000 511,074 (220,926)
Catch-up payments to Doctors - - -
Insurance - - -
Claims & Capitation 477,250 506,367 29,117
Patient Refunds - - -
Rent 157,500 115,731 (41,769)
Utilities 27,000 - (27,000)
Bank Lock-Box Account Fees - - -
Medical Supplies 60,000 2,408 (57,592)
Trade Accounts Payable 24,000 65,195 41,195
-------------------------------------------------------
Total Cash Disbursements 1,477,750 1,200,775 (276,975)
Agreed Cash Adjustments - - -
-
Less: Interest - - -
Net Cash Flow 7,250 589,488 582,238
Intercompany Transfers - (1,752,302) (1,752,302)
ENDING CASH BALANCE $ (257,000) $ 560,447 $ 817,447
-------------------------------------------------------
</TABLE>
<PAGE> 4
Cornerstone
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
------------------------------------------------------
For the Period 7/19 to 8/24/98
------------------------------------------------------
Projected Actual Difference
------------------------------------------------------
A B C = B - A
------------------------------------------------------
<S> <C> <C> <C>
BEGINNING CASH BALANCE $ (23,500) $ (20,207) $ 3,293
Cash Receipts:
- --------------
Fee For Service Billings 668,000 345,068 (322,932)
Claims & Capitation - - -
Reimbursement - - -
Medicare A/R Collections - - -
------------------------------------------------------
Total Cash Receipts 668,000 345,068 (322,932)
Cash Disbursements:
- -------------------
Employee/Physician Payroll 328,500 156,914 (171,586)
Catch-up payments to Doctors - - -
Insurance - - -
Claims & Capitation - - -
Patient Refunds - - -
Rent 22,500 - (22,500)
Utilities 9,750 - (9,750)
Bank Lock-Box Account Fees - - -
Medical Supplies - - -
Trade Accounts Payable 121,500 80,946 (40,554)
------------------------------------------------------
Total Cash Disbursements 482,250 237,860 (244,390)
Agreed Cash Adjustments - - -
Less: Interest - - -
Net Cash Flow 185,750 107,208 (78,542)
Intercompany Transfers - (87,000) (87,000)
Ending Cash Balance $ (156,500) $ - $ 156,500
------------------------------------------------------
</TABLE>
<PAGE> 5
Florida (Clinics and Humana)
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
-------------------------------------------------------
For the Period 7/19 to 8/24/98
-------------------------------------------------------
Projected Actual Difference
-------------------------------------------------------
A B C = B - A
-------------------------------------------------------
<S> <C> <C> <C>
BEGINNING CASH BALANCE $ (355,633) $ 1,575,276 $ 1,930,909
Cash Receipts:
- --------------
Fee For Service Billings 1,102,170 868,770 (233,400)
Claims & Capitation 7,261,691 1,655,014 (5,606,677)
Reimbursement - -
Medicare A/R Collections - -
-------------------------------------------------------
Total Cash Receipts 8,363,861 2,523,784 (5,840,077)
Cash Disbursements:
- -------------------
Employee/Physician Payroll - 3,305,014 3,305,014
Catch-up payments to Doctors - -
Insurance - -
Claims & Capitation 5,394,906 2,483 (5,392,423)
Patient Refunds - -
Rent - 605,175 605,175
Utilities - 72,107 72,107
Bank Lock-Box Account Fees - -
Medical Supplies - 63,710 63,710
Trade Accounts Payable 6,450,341 462,255 (5,988,087)
-------------------------------------------------------
Total Cash Disbursements 11,845,247 4,510,742 (7,334,505)
Agreed Cash Adjustments - - -
Less: Interest - - -
Net Cash Flow (3,481,386) (1,986,958) 1,494,428
Intercompany Transfers - 411,682 411,682
Ending Cash Balance $ (1,602,275) $ - $ 1,602,275
-------------------------------------------------------
</TABLE>
<PAGE> 6
San Antonio (Gonzaba)
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
--------------------------------------------------------
For the Period 7/19 to 8/24/98
--------------------------------------------------------
Projected Actual Difference
--------------------------------------------------------
A B C = B - A
--------------------------------------------------------
<S> <C> <C> <C>
BEGINNING CASH BALANCE $ (496,500) $(2,795,651) $(2,299,151)
Cash Receipts:
- --------------
Fee For Service Billings 100,500 190,198 89,698
Claims & Capitation 1,976,000 4,343,615 2,367,615
Reimbursement - -
Medicare A/R Collections - -
--------------------------------------------------------
Total Cash Receipts 2,076,500 4,533,813 2,457,313
Cash Disbursements:
- -------------------
Employee/Physician Payroll 1,202,500 2,974,821 1,772,322
Catch-up payments to Doctors - -
Insurance 48,000 91,584 43,584
Claims & Capitation 536,000 695,595 159,595
Patient Refunds - 610 610
Rent 189,000 477,875 288,875
Utilities 40,500 25,411 (15,089)
Bank Lock-Box Account Fees - - -
Medical Supplies 150,000 67,969 (82,031)
Trade Accounts Payable 37,500 119,071 81,571
--------------------------------------------------------
Total Cash Disbursements 2,203,500 4,452,936 2,249,436
Agreed Cash Adjustments - -
Less: Interest - -
Net Cash Flow (127,000) 80,877 207,877
Intercompany Transfers - 2,714,774 2,714,774
Ending Cash Balance $ (524,500) $ - $ 524,500
--------------------------------------------------------
</TABLE>
<PAGE> 7
Meridian
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
--------------------------------------------------------
For the Period 7/19 to 8/24/98
--------------------------------------------------------
Projected Actual Difference
--------------------------------------------------------
A B C = B - A
--------------------------------------------------------
<S> <C> <C> <C>
BEGINNING CASH BALANCE $ 2,640,000 $ 438,212 $(2,201,788)
Cash Receipts:
- --------------
Fee For Service Billings 750,000 615,161 (134,839)
Claims & Capitation 2,157,816 2,187,166 29,350
Reimbursement - -
Medicare A/R Collections - -
--------------------------------------------------------
Total Cash Receipts 2,907,816 2,802,327 (105,489)
Cash Disbursements:
- -------------------
Employee/Physician Payroll 2,675,000 2,499,488 (175,512)
Catch-up payments to Doctors - -
Insurance - -
Claims & Capitation 2,100,000 999,079 (1,100,921)
Patient Refunds - 541 541
Rent 632,000 554,020 (77,980)
Utilities - 14,351 14,351
Bank Lock-Box Account Fees - - -
Medical Supplies - 50,352 50,352
Trade Accounts Payable 510,000 318,143 (191,857)
--------------------------------------------------------
Total Cash Disbursements 5,917,000 4,435,974 (1,481,026)
Agreed Cash Adjustments - -
Less: Interest - -
Net Cash Flow (3,009,184) (1,633,647) 1,375,537
Intercompany Transfers - 1,770,443 1,770,443
Ending Cash Balance $ 1,630,000 $ 575,008 $(1,054,992)
--------------------------------------------------------
</TABLE>
<PAGE> 8
Tentative & Closures
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
--------------------------------------------
For the Period 7/19 to 8/24/98
--------------------------------------------
Projected Actual Difference
--------------------------------------------
A B C = B - A
--------------------------------------------
<S> <C> <C> <C>
Initial Cash Balance $ 1,594,031 $ 2,859,931 $ 1,265,900
Cash Receipts:
- --------------
Fee For Service Billings 1,405,837 2,852,980 1,447,143
Claims & Capitation 12,365,650 8,941,673 (3,423,977)
Medicare & Collections - 2,377,522 2,377,522
--------------------------------------------
Total Cash Receipts 13,771,487 14,172,175 400,688
Less: Cash Disbursements:
- -------------------------
Employee & Physician Payroll 9,095,249 11,097,184 2,001,935
Catch-up payments to Doctors 228,822 - (228,822)
Insurance 1,350,878 514,939 (835,939)
Claims & Capitation 9,331,586 3,319,919 (6,011,667)
Patient Refunds 60,000 - (60,000)
Rent 796,533 393,738 (402,795)
Utilities 83,076 4,669 (78,407)
Bank Lock Box - 229 229
Medical Supply 185,300 5,643 (179,657)
Other 2,109,566 437,535 (1,672,031)
--------------------------------------------
Total Cash Disbursements 23,241,009 15,773,855 (7,467,154)
Agreed Cash Adjustments
Less: Interest
Net Cash Flow (9,469,522) (1,601,680) 7,867,842
Net DIP Advance 2,800,000 2,800,000
Intercompany Transfers (1,507,000) (2,429,936) (922,936)
Ending Cash Balance $ (9,382,491) $ 1,628,315 $11,010,806
--------------------------------------------
</TABLE>
Source: Information reflected above was obtained from the books and records of
FPA Medical Management Group, Inc.
<PAGE> 9
Health Partners Inc.
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
Cumulative Totals
<TABLE>
<CAPTION>
--------------------------------------------
For the Period 7/19 to 8/24/98
--------------------------------------------
Projected Actual Difference
--------------------------------------------
A B C = B - A
--------------------------------------------
<S> <C> <C> <C>
Initial Cash Balance $ - $2,229,932 $ -
Cash Receipts:
- --------------
Fee For Service Billings - 4,477,989 -
Claims & Capitation - 3,622,373 -
Medicare & Collections - -
--------------------------------------------
Total Cash Receipts - 8,100,362 -
Less: Cash Disbursements:
- -------------------------
Employee & Physician Payroll - 4,586,075 -
Catch-up payments to Doctors - 215,425 -
Insurance - 266,089 -
Claims & Capitation - 1,964,346 -
Patient Refunds - 12,327 -
Rent - 330,742 -
Utilities - 11,889 -
Bank Lock Box - -
Medical Supply - 166,126 -
Other - 844,403 -
--------------------------------------------
Total Cash Disbursements - 8,397,422 -
Agreed Cash Adjustments
Less: Interest
Net Cash Flow - (297,060) -
Net DIP Advance -
Intercompany Transfers - 1,000,000 -
Ending Cash Balance $ - $2,932,872 $ -
--------------------------------------------
</TABLE>
General:
- --------
Health Partners Inc. is reported for cash flow purposes as a stand alone
entitiy. These transactions are not included as a part of the FPA Medical
Management, Inc. roll-up.
