Minnesota’s health insurer UCare is facing a crisis, with hundreds of millions in unpaid claims affecting health and home care providers statewide.
The Minnesota Department of Health (MDH) labeled UCare as being in a “hazardous financial condition” in court filings as it begins winding down operations after many years. As part of this process, Medica has taken over more than 300,000 UCare clients effective January 1, but concerns linger about claims from 2025 that have not yet been settled.
Kathy Messerli, Executive Director of the Minnesota Home Care Association, expressed concerns for home care providers who are struggling financially. “They are in a financial crisis due to payments that have not been made for that last half of December,” she explained. Providers often operate on slim margins, and unpaid claims have led many to lay off staff and cut services, impacting vulnerable populations including elderly individuals and those with disabilities.
“One agency can’t see 50 clients anymore because they laid off caregivers,” Messerli noted. “That’s just one example of how widespread this issue is.” The situation affects not only home care but also hospitals and clinics statewide. Claims submitted by Allina and Fairview, two of the state’s largest health systems, indicate they are collectively owed over $170 million for services rendered in 2025. When combined with claims from home care providers, the total could exceed $200 million.
Currently, UCare is undergoing court-ordered rehabilitation. MDH’s involvement suggests they may amend provider contracts, including reimbursement terms. However, uncertainty remains about when providers can expect payment for 2025 claims. “We’re hopeful that claims will be paid at least in part,” said Messerli, though she anticipates it could take at least six months before any reimbursements occur.
According to UCare’s court documents, the organization could be facing a deficit of nearly $400 million by spring. This precarious situation raises questions about the future. Will UCare be able to pay providers in full? Messerli feels optimism about partial payments but remains cautious.
Both Allina and Fairview are seeking a role in shaping UCare’s rehabilitation plan, but MDH has opposed these requests. The next court hearing is slated for Friday. A Fairview spokesperson refrained from commenting due to the ongoing litigation. In a statement, Allina Health emphasized the importance of timely payments, stating, “Like other health care providers, we are facing significant uncertainty and financial pressures driven by rising costs and declining reimbursement. Timely payment for care already delivered is crucial to sustaining our ability to serve patients.”
The challenges faced by UCare offer a snapshot of broader issues within the healthcare payment system. As these situations unfold, the ripple effects will undoubtedly impact many lives across Minnesota. For more information on healthcare challenges, visit the Minnesota Department of Health website.
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Allina,Fairview,Health,Medical,Renée Cooper
