Navigation Links
Detroit Area Hospitals Sue To Recover Medicaid Funds
Date:12/8/2008

DETROIT, Dec. 8 /PRNewswire/ -- In a lawsuit arising out of the demise of the Detroit-based OmniCare, a once large health maintenance organization servicing primarily Medicaid recipients, several major Detroit area hospitals filed an emergency motion this morning in Wayne County Circuit Court against United American Healthcare Corporation, the former manager of the failed HMO.

In the emergency motion, the hospitals -- Beaumont Hospital, Henry Ford Hospital, the Detroit Medical Center, St. John Hospital, Trinity Health, and Oakwood Hospital -- requested that Judge Isidore Torres enjoin United American Healthcare from using up to $1 million in company funds to buy back stock from shareholders -- some of whom are individual defendants in the case.

The hospitals, which are pursuing damages in the tens of millions of dollars for United's mismanagement of OmniCare, claim that United has insufficient funds to pay claims of OmniCare creditors who were not paid for providing care to Medicaid patients. The emergency motion argues that, under Michigan law, corporations are prohibited from buying back outstanding shares of stock in order to avoid paying creditors.

In the suit, the hospitals allege that a management agreement between OmniCare and United American Healthcare was breached as a result of United American Healthcare's mismanagement of OmniCare. In the late 1990's, the State of Michigan filed a petition against OmniCare, putting OmniCare into supervision, then rehabilitation, and, when it was determined that OmniCare could not be salvaged, then into liquidation. The State of Michigan's filings in Lansing asserted that OmniCare was operating with insufficient capital requirements, in violation of state law.

During the proceedings in Ingham County Circuit Court, it was determined that United American Healthcare had not paid many health care providers for tens of millions of dollars of care rendered to OmniCare Medicaid insureds. Yet, during this same period, United American Healthcare was paid over $50 million in management fees by OmniCare. During the liquidation process, the court approved an order allowing the hospitals to pursue damages claims against United American HealthCare and various of its officers and directors for mismanaging OmniCare.

On December 2, 2008, United American Healthcare announced a "Stock Repurchase Program" under which it proposed to redeem up to $1 million of its outstanding shares, thereby transferring its cash to its shareholders. The motion alleges that this buyback will almost certainly render United American Healthcare unable to pay full damages to the hospitals.

Gerard Mantese, the hospitals' attorney, stated, "This suit establishes that, in a very real sense, United American Healthcare and many of the individual defendants took money directly from the pockets of providers caring for Michigan's most vulnerable residents. The primary purpose of those payments was to pay for health care for Michigan's Medicaid population, which consists largely of children, disabled individuals and senior citizens living in poverty."


'/>"/>
SOURCE Mantese and Rossman, P.C.
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Tickets Still Available for Detroit Uncorked;
2. Detroit Metro Tower Air Traffic Controllers File Lawsuit Alleging Improper Mold Removal and Health Effects
3. McKesson Corporation CEO to Address the Detroit Economic Club on Preserving Our Healthcare System and Improving Quality of Life
4. Haile Gebrselassie Coming to Detroit for Free Press/Flagstar Marathon
5. Saturn Shows Its Commitment to Health and Fitness by Becoming Expo Title Sponsor for The Detroit Free Press/Flagstar Marathon
6. EPA Awards $40,000 Grant to Detroit Health Department for Asthma Program
7. Ilitch Brings New Brand of Pilates to Metro Detroit With Opening of Studio in West Bloomfield
8. Detroit Homeless Men Adopt Local Families for Christmas
9. University of Detroit Mercy School of Dentistry Moves to Larger Facility on New Corktown Campus
10. Old Newsboys Goodfellow Fund of Detroit Has REACHED and EXCEEDED ITS GOAL of $1.375 Million
11. Dorsey Schools, Detroit Areas Preeminent Career Training School, Opens a Fifth Campus in Farmington Hills
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/24/2016)... ... ... was in a crisis. Her son James, eight, was out of control. Prone to extreme ... “When something upset him, he couldn’t control his emotions,” remembers Marcy. “If there was ... other children and say he was going to kill them. If we were driving ...
(Date:6/24/2016)... ... June 24, 2016 , ... ... micro-osteoperforation for accelerated orthodontic treatment. Dr. Cheng has extensive experience with all areas ... , AcceleDent, and accelerated osteogenic orthodontics. , Micro-osteoperforation is a revolutionary adjunct ...
(Date:6/24/2016)... ... , ... People across the U.S. are sharpening their pencils and honing their ... in which patients and their families pay tribute to a genetic counselor by nominating ... of Genetic Counselors (NSGC) Annual Education Conference (AEC) this September. , In April, ...
(Date:6/24/2016)... ... 24, 2016 , ... Puradigm® & Innovative Solutions today announced ... and processing operations at its production facility, and opened its first two dispensaries ... manufacturer of a complete system of proactive air and surface purification solutions for ...
(Date:6/24/2016)... ... , ... Venture Construction Group (VCG) sponsors Luke’s Wings ... the Woodmont Country Club at 1201 Rockville Pike, Rockville, Maryland, 20852. The event ... that have been wounded in battle and their families. Venture Construction Group is a ...
Breaking Medicine News(10 mins):
(Date:6/24/2016)... FRANCISCO, Calif. , June 24, 2016 /PRNewswire/ ... ), a biopharmaceutical company developing novel therapeutics for ... unmet needs, today announced the closing of its ... of common stock, at the public offering price ... in the offering were offered by GBT. GBT ...
(Date:6/24/2016)... The Academy of Managed Care Pharmacy (AMCP) ... would allow biopharmaceutical companies to more easily share health ... and coverage decisions, a move that addresses the growing ... The recommendations address restrictions in the sharing of ... label, a prohibition that hinders decision makers from accessing ...
(Date:6/24/2016)... According to a new market ... Needles, Safety Pen Needles), Needle Length (4mm, 5mm, 6mm, ... of Purchase (Retail, Non-Retail) - Trends & Global Forecasts ... market for the forecast period of 2016 to 2021. ... by 2021 from USD 1.65 Billion in 2016, growing ...
Breaking Medicine Technology: