‘Critical failure’ at UCare blocks dialysis care, creates systemic risk

Health insurer UCare failed to transport a patient for life-sustaining dialysis treatments in January, which state regulators called a critical example of systemic scheduling and customer service problems at the remaining business.

After state officials took over the insurer at the brink of financial insolvency late last year, many patients in legacy UCare health plans have found it virtually impossible to line up medical transportation because of excessive hold times to reach customer service, according to a state regulatory notice obtained by the Minnesota Star Tribune.

The transportation troubles are the latest example of how patients have been impacted by the surprise financial failure at Minneapolis-based UCare, which is facing liquidation after decades of successful operation as one of Minnesota’s largest nonprofit health insurers.

The problems also intersect with concerns over fraud in the state’s Medicaid program, including a transportation service that pays insurers to provide rides to medical appointments. Investigators are actively probing the spending in more than a dozen Minnesota Medicaid programs.

The recent complaint against UCare says the insurer has failed to provide transportation services under its contract. In some cases, the Minnesota Department of Human Services (DHS) says, UCare patients have been waiting on hold for more than an hour to schedule rides for medical care.

UCare’s contract with the state says its member services call center will answer calls within 2 minutes on average, yet wait times were averaging 15 minutes the week of Jan. 22.

In Clay County, in the northwest corner of the state, enrollees at one point found they had no transport options because UCare hadn’t secured transportation providers in the area.

The department issued a regulatory notice Jan. 23 saying it considered the health insurer’s “inability to provide essential transportation services to [patients] a critical failure and a formal breach of contract.”

“Furthermore, call center wait times that significantly exceed ... established performance standards have created an unacceptable barrier to care, intensifying DHS’s concerns regarding the health and safety of [UCare] members,” DHS said.

In an email response to questions, the department said it couldn’t provide specifics about the dialysis patient due to privacy concerns.

UCare is shutting down this year after a series of huge financial losses, including a $504 million loss on operations during 2024.

At that time, the nonprofit was providing coverage to about 587,000 state residents who qualify for benefits via the Medicare or Medicaid government programs, or federal subsidies for health insurance sold on the state’s MNsure exchange.

The scheduling and customer service problems exist in UCare’s legacy health plans for patients in Medicaid and MinnesotaCare, both of which provide taxpayer-funded coverage for lower-income people.

On Jan. 1, Minnetonka-based Medica acquired UCare’s health plans, which include more than 200,000 enrollees. They continue to operate using the UCare name.

In response to questions this week, Medica said it was adjusting staffing levels to increase help for patients during weekdays while expanding access to customer service resources. The insurer said it had invested in a transportation portal so enrollees could schedule their own rides, thereby reducing call center volume and wait times.

“When we became aware of a recent issue affecting our members, we responded immediately and worked to ensure uninterrupted care and support,” Medica said in a statement.

The January notice from DHS didn’t say exactly how many Medicaid and MinnesotaCare enrollees have been struggling with long wait times at the call center, or how many patients experienced health care consequences because transportation couldn’t be scheduled.

In January, UCare was reporting difficulty scheduling medical transportation statewide, DHS says, because many active providers were refusing new assignments due to unpaid claims for services rendered thus far in 2026. Medica says it was slow to pay some claims at the time due to complexities with the UCare transition.

In addition, DHS said: “This issue is compounded by the loss of some transportation providers due to numerous fraud, waste and abuse investigations.”

The legacy business at UCare was supposed to submit a corrective action plan in early February. DHS established a short “30-day cure period” due to the urgency of the issue, and said the insurer must decrease the number of missed rides/provider no-shows to 1% or less of requested rides each month.

Failure to solve the problems by Feb. 20 could result in further remedies and sanctions. DHS said it couldn’t comment further on the situation, because the corrective action plan was active and ongoing.

Medica said in an email response to questions: “We have seen significant improvement in hold times.”

Last year, more than 150,000 seniors in UCare Medicare Advantage plans had to find new coverage for 2026 after the insurer announced it would exit the market. In December, another 2,500 seniors had to scramble for new Medicare Supplement policies following a last-minute announcement that UCare wouldn’t be handing off their coverage to another insurance company.

Other aspects of the UCare saga are ongoing.

The health insurer announced in December that about 700 employees would be losing jobs over time, including some who are still working this year on company’s wind-down. Another 650 workers have shifted to employment with Medica.

Health care providers across the Minnesota say they’ve been waiting to get paid by UCare for services they provided in 2025. Fairview Health Services has said it’s owed more than $100 million, while Allina Health said its unpaid bills exceeded $70 million.

A state estimate in February suggested UCare should have enough money to cover its debts to hospitals, and might even have a little left over once accounts are settled. A Ramsey County judge has scheduled a hearing for this month on what’s called a “rehabilitation plan” for UCare, including a process for paying off creditors as well as liquidation for all the health insurer’s assets.

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