Minnesota health insurer UCare owes an estimated hundreds of millions of dollars in unpaid claims, affecting health and home care providers across the state.
The Minnesota Department of Health (MDH), which has sought control of UCare as it winds down operations after decades in business, described the non-profit as being in “hazardous financial condition” in a recent court filing.
Medica took over more than 300,000 UCare clients as of Jan. 1. According to a UCare webpage related to that transition, Medica will handle claims in 2026. However, few answers have been provided about unpaid claims from 2025.
Kathy Messerli, Executive Director of the Minnesota Home Care Association, said home care providers were still seeking clarity on Sunday.
“We represent home care providers all across the state of Minnesota, and they are in a financial crisis due to payments that have not been made for the last half of December,” said Messerli.
She said home care providers operate on thin financial margins, and with unpaid UCare claims, some providers have had to lay off staff and drop clients — often older adults and people with disabilities.
“There’s one agency that is not able to see 50 of their clients because they had to lay off caregivers… That’s just one agency,” Messerli said, adding that “hundreds of people across the state” could be impacted.
The impact reaches beyond home care.
More than 300,000 people were transferred from UCare to Medica, with needs ranging from large-scale health systems to smaller physician clinics, pharmacies, dental offices, and more.
When asked if they are all dealing with unpaid claims, Messerli said, “They are. They’re all dealing with it. It’s huge.”
Court filings reveal that Allina and Fairview, two of the state’s largest health systems, say they are collectively owed more than $170 million for months of care provided in 2025.
Allina and Fairview’s claims, taken together with Messerli’s estimate of unpaid claims to home care providers, suggest the total exceeds $200 million.
“Yes, that is fair,” Messerli said regarding the estimate.
UCare is under court-ordered rehabilitation, and that order said, MDH and MDH “…may amend the terms of provider contracts…”, including reimbursement, leaving it unclear when and by how much providers could ultimately be reimbursed for 2025 claims. Those answers are expected in an eventual court-approved rehabilitation plan.
UCare declined to comment, directing questions to the state.
Asked about the timeline, an MDH spokesperson replied, “The rehabilitation timeline is up to the court. Since the details involved in a rehabilitation are unique, we would not be able to speculate on a range of time.”
MDH declined to answer additional questions, citing pending litigation.
“We’re hopeful that claims will be paid at least in part,” Messerli said, though she doesn’t expect reimbursement for at least another six months.
According to court documents, UCare estimated it’ll be operating at a nearly $400 million deficit by the spring.
“From the conversations I’ve had, I have some optimism that there will be some money,” Messerli said, asked if she had concerns about UCare’s ability to reimburse providers for unpaid 2025 claims.
“I am not optimistic they’ll be paid in full,” she continued.
Both Allina and Fairview petitioned the court for a role in developing UCare’s rehabilitation plan. MDH has opposed these motions. The next court hearing is scheduled for Friday.
A Fairview spokesperson declined to comment, citing ongoing court proceedings.
See the statement provided by Allina Health below:
“Allina Health values our long-standing relationship with UCare and the partnership we’ve shared in serving patients. Like other health care providers, we are facing significant uncertainty and financial pressures driven by rising costs, declining reimbursement for the care we provide and concerns about funding cuts. Timely payment for care already delivered is essential to our sustainability and ability to provide care for patients.“
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