TRACO, an insurance affiliate of Dallas-based Steward Health Care, filed a Dec. 26 complaint in bankruptcy court alleging that the for-profit health system has failed to repay funds despite court orders authorizing payments, jeopardizing insurance coverage for thousands of Steward-affiliated healthcare professionals.
Steward sought Chapter 11 protection May 6 and has worked to sell off its then-31 hospitals.
The complaint, obtained by Becker's, said that TRACO provides medical malpractice coverage to around 1,400 medical practitioners, including around 1,200 physicians Steward employed and around 200 private practice physicians affiliated with Steward.
The insurer claims that the for-profit health system owes it millions in unpaid insurance premiums and that it is also entitled to more than $72 million from an early 2023 sale of various Steward hospitals in Utah to Chicago-based CommonSpirit Health for $685 million.
It also alleges entitlement to additional proceeds from the Steward sale of Odessa (Texas) Regional Medical Center and Big Spring, Texas-based Scenic Mountain Medical Center to Brentwood, Tenn.-based Quorum Health.
TRACO has demanded that Steward pay the owned premiums, return the hospital sale proceeds and provide a full accounting of its financial dealings.
Becker's has reached out to Steward for comment and will update this story should more information become available.