A judge has approved a plan to partially pay hundreds of medical providers who are owed money by a Seneca-based health insurer that shut down due to fraudulent letters of credit. A state Insurance Department receivership has paid a “quarter on a dollar” to about 1,700 providers stuck with claims totaling $11.1 million from the collapse of the S.C. Health Cooperative.

A circuit judge in Columbia signed the “rehabilitation plan” Friday in the receivership that was prompted by a discovery last year that the cooperative used two letters of credit totaling $8 million that turned out to be fraudulent. In December, a judge appointed state Insurance Director Ray Farmer to be receiver of S.C. Health Cooperative finances after an audit showed the insurer to be financially insolvent, with $10.6 million in liabilities and $250,000 in assets.