IMCare to pay out $887K in unpaid claims in Lakeview suit settlement

GRAND RAPIDS — The contract dispute between Itasca County’s sole public insurance provider and a local mental health care company is now settled and the lawsuit dismissed.

The settlement was announced in a Monday, April 22, news release from Lakeview Behavioral Health. Itasca County Judge Heidi M. Chandler dismissed the case Friday after the parties notified the court of the settlement agreement.

IMCare agreed to reimburse $887,500 in claims from Lakeview Behavioral Health and waive Lakeview’s nearly $200,000 that IMCare was seeking to recoup from the provider. IMCare also agreed not to pursue any further recoupment.

The terms of the settlement agreement were provided to KAXE by the attorney representing Itasca County in the suit. IMCare Director Sarah Anderson deferred to the attorney when reached for comment.

"The Parties desire to avoid the expense, inconvenience, uncertainty and distraction of litigation and have decided to amicably resolve the Action and the Causes of Action under the terms set forth in this agreement," the agreement states.

The initial dispute between IMCare and Lakeview Behavioral Health became public in September 2023, when IMCare announced it was dropping Lakeview as an in-network behavioral health provider in December. The decision affected about 700 people whose services at Lakeview were covered through their IMCare insurance.

Lakeview filed the lawsuit last November, alleging breach of contract, unjust enrichment and defamation. The suit stated IMCare did not pay for claims submitted while the mental health provider was in-network. The company unsuccessfully sought a temporary injunction to stop the change before the end of the year.

County officials, meanwhile, said questionable billing practices and various other administrative concerns led to the cancellation. They characterized the move as part of their obligation to be stewards of taxpayer dollars. Lakeview did not include enough information when filing claims, and payment would be available once those concerns were addressed.

“We are thankful to have reached this agreement with IMCare,” said Tom Johnson, CEO of Lakeview Behavioral Health in a news release. “Our commitment to delivering high-quality care remains unwavering, and we look forward to continuing to serve our community with compassion and excellence.”

Lakeview will remain out of network for those who receive insurance through IMCare.