Louisiana Universities to receive $2.7M from closing of HMO

Six Louisiana universities will divide more than $2.7 million under a court order that finalized the dissolution of a failed HMO.

AmCare Health Plans of Louisiana Inc. went into receivership in 2002 after investigators found the health maintenance organization was severely undercapitalized and had manipulated its financial records by moving assets back and forth between sister companies in an attempt to appear solvent.

“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,” Louisiana Insurance Commissioner Jim Donelon said in a press release announcing the award on Tuesday. “We have been able to pay those to whom money was owed and we are investing the remaining funds in our next generation through educational insurance and business programs at these institutions.”

Southern University, the University of Louisiana at Lafayette, the University of Louisiana at Monroe, the University of New Orleans, Xavier University of New Orleans and LSU-Shreveport each will get about $460,000, according Donelon. In addition to receiving the surplus funds, the universities may seek matching funds from the Kevin P. Reilly Sr. Louisiana Education Quality Trust Fund established in the state constitution.

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