American Health Care Providers (AHCP) is going out of business, having ended its legal battle with the Illinois Department of Insurance. Cook County Circuit Court Judge Aaron Jaffe on May 11 placed the company into liquidation after AHCP withdrew its objection to a petition by the state.
Illinois regulators in February filed a petition to liquidate the company, saying AHCP had $25 million in liabilities, which outweighed its assets and made it insolvent. The company disputed the state's decision, maintaining the company was not running in the red.
AHCP president Asif Sayeed has not returned Insure.com's phone calls seeking comment, but in a press release he says he offered the state a reorganizational plan that would have provided an additional $10 million cash infusion. Illinois, though, says the plan would not have pulled the company out of the red.
"The director of insurance rejected the plan as unacceptable," says Richard Darling, a spokesperson for the insurance department.
Darling says 35,000 AHCP customers will have to choose different HMOs. However, customers will continue to receive coverage. Claims submitted by AHCP's policyholders will be paid by the Illinois HMO Guaranty Association, which is supported by contributions from HMOs operating in the state. On its Web site, the Illinois Department of Insurance offers more information about the Guaranty Association. You also can call the insurance department at (217) 782-4515 or (312) 814-2427, or contact AHCP at (708) 503-5000.
Prior to the state's move to put it out of business, AHCP covered 90,000 customers, but as the court proceedings continued, more than half left for other plans.
For example, the Illinois Department of Public Aid on April 30 ended its contract with AHCP to insure 19,000 people enrolled in Medicaid, a government-subsidized health insurance program for low-income families. The state says it will transfer the former AHCP customers to other HMOs.
Advocate Health Care, Chicago's largest provider of medical care, terminated a contract with AHCP on May 1. Advocate Health Care, based in Oak Brook, Ill., owns eight hospitals and has more than 4,200 affiliated doctors.
The Health Care Financing Administration (HCFA), a federal Medicare program for senior citizens, also cut ties to AHCP, the agency announced. It terminated its contract May 1, which meant about 4,000 seniors who live in Cook County will have to find new health insurance. HCFA guarantees them health care coverage, but they will need to choose among four other managed care plans that contract with HCFA.
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