Allina says UCare owes it $70M for unpaid medical bills

Allina Health says it’s owed more than $70 million for care provided to UCare members and the health system wants answers to critical questions about the insurer’s shutdown.

The assertions, which Allina made in filings with Ramsey County District Court, come in the rare case of an established health insurer suffering financial losses so large that they’re forcing liquidation, as is happening at UCare.

The Minneapolis-based health care provider says if it isn’t paid by UCare in a timely fashion, patient services could be affected. In court filings over the past week, Allina has asked to intervene in the case.

UCare should have enough money to cover the insurer’s projected operating deficit, Allina said, but it’s not clear exactly when or how health care providers will get paid as the insurer winds down operations.

“Payment delays only create more uncertainty and financial strain on Allina Health that, like other health care providers, is already facing financial pressures driven by rising costs, declining reimbursement for the care we provide and concerns about funding cuts,” the health system said in a statement to the Minnesota Star Tribune.

Following huge financial losses at the Minneapolis-based insurer over the past two years, the Minnesota Department of Health took over UCare’s operations last month as a prelude to its eventual shutdown.

Minneapolis-based Fairview Health Services has said in court filings that it was owed more than $100 million by UCare. Fairview is asking to formally intervene in the court case, which was launched Dec. 1 by a petition from the Health Department seeking a “rehabilitation” order at UCare.

The state Health and Commerce departments, which jointly regulate health insurers, said they could not yet provide details regarding how much and when providers will be paid, since those payments require court approval.

“We are sharing updates with providers as we are able to ensure all parties are as informed as they can be,” the departments said in a joint statement.

On Jan. 1, UCare closed a deal for rival health insurer Medica to take responsibility for about 300,000 enrollees in UCare health plans for Medicaid and MNsure coverage. Financial terms have not been disclosed for the acquisition, which was first announced in November.

Only “scant details” have been provided about the Medica transaction, Allina said in a Dec. 31 court filing. UCare had more than $400 million in assets as of last summer, the filing said, yet it’s not clear whether any of these or other liquid assets will transfer to Medica.

The health system wants to know when the state’s plans for UCare will be filed and heard by the court. Allina also asked how the health system and others can be assured of fair and equitable compensation for services they’ve provided to patients in the past and the future.

“Before and after this action was filed, Allina sought to determine how Allina’s patients and health care providers will be protected,” the health system said in its filing. “Despite this, critical questions remain unanswered.”

In the coming months, the state and the court will sort out the financial details at UCare now that its roughly 500,000 health insurance enrollees have found or are transitioning to other coverage.

In September, the health insurer said it would shut down its popular Medicare Advantage plan, which forced about 150,000 people to shop for new coverage for 2026.

About 2,500 people with Medicare Supplement policies from UCare struggled through a much more abrupt transition, as they were told in December — despite previous assurances to the contrary — they’d have to scramble and find new policies before Jan. 1 to avoid a significant coverage gap.

Another 27,000 enrollees who qualify for both Medicaid and Medicare benefits, and previously opted to receive them through a UCare health plan, also had to transition to new coverage for 2026.