21 Feb LA Universities to Receive $2.7M After Demise of AmCare
The demise of AmCare Health Plans of Louisiana, Inc. began in 2002 when investigators discovered the company was undercapitalized. Investigators determined that AmCare did not have enough funds to sustain normal business operations and pay its creditors. The dissolution of the health management organization was a shock to the higher education community in Louisiana that relied upon it. AmCare had been feigning health by transferring assets back and forth between sister companies. A favorable court order declared that six Louisiana universities would receive money owed to them. 19th Judicial District Court Judge Janice G. Clark of Baton Rouge signed the plan for distributing the funds.
The six universities receiving surplus funds are Louisiana State University-Shreveport, Southern University and A&M College, University of Louisiana-Lafayette, University of Louisiana-Monroe, University of New Orleans and Xavier University. These schools will receive equal amounts of $460,000. Additionally, the universities may seek matching funds from the Kevin P. Reilly Sr. Louisiana Education Quality Trust Fund (LEQTF) established .n the state constitution. Louisiana Insurance Commissioner Jim Donelon was pleased with the result of the court order saying, “the dissolution of a company is never a pleasant thing, but I am glad to report that this ending is going to have a beneficial outcome.” Commissioner Donelon stated that the rest of the funds owed by AmCare would be investigated “in our next generation through educational insurance and business programs at these institutions.”
The legal battle to reclaim funds from AmCare began when the Louisiana Department of Insurance, as well as Texas, and Oklahoma regulators sued AmCare for breach of contract. Lower courts awarded damages to Louisiana, Oklahoma, and Texas. The Louisiana Supreme Court followed the lower courts’ rulings and allowed for the Commissioner of Insurance to disburse the funds collected from AmCare’s liquidation. Thanks to this ruling, providers, and policyholders of AmCare are allowed to receive their payments.