Wellpath Bankruptcy Rumblings: Following Corizon In Dodging Accountability? Election Outcome: Medicaid, Drug Policy, & Immigrant Detention

Highlighted Stories

Editor's Note

It started as a trickle. A few weeks back, in an Editor’s Note entitled “Deadbeat Correctional Healthcare Vendors”, COCHS had highlighted a Michigan story about Wellpath stiffing EMS agencies who transported for Wellpath incarcerated patients from that state’s prisons. Two weeks ago, there was a story from Augusta, Georgia, that reported that Wellpath was, “checking out sooner than expected” from its contract with that jurisdiction’s jail. In this week’s first highlighted article, from South Carolina, it is reported that Wellpath has missed settlement payments to former patients incarcerated in the Berkeley County jail.

Returning back to Michigan, what was once a trickle of stories has now become a flood. In the next three highlighted articles we see that Wellpath’s tenure in the Great Lake State is having major financial repercussions. Michigan state legislators are now proposing that the state steps in to reimburse the EMS agencies, mentioned above, for the expenses incurred by Wellpath. In the next article it is reported that the upper peninsula of Michigan may be soon without EMS services because of Wellpath’s delinquent payments. And just yesterday, in the last Michigan article, it was reported that Michigan filed suit against Wellpath for breach of contract.

The previous articles all start to make sense as Media Press House, in the next highlighted article, reports that Wellpath is preparing to file for bankruptcy. Continuing with this report about the financial viability of Wellpath, the VT Digger article repeats speculations about bankruptcy also noting that Wellpath is currently charging Vermont 50% more than the previous provider, VitalCore.

For our subscribers who may not know, Wellpath is the big player in the correctional healthcare market, just as Corizon once was. Like Corizon, Wellpath had been forged through various mergers of other correctional healthcare vendors. And now perhaps like Corizon, Wellpath seems about to declare bankruptcy. The question is, if Wellpath were to file for bankruptcy, how it might pay for legal settlements to former, incarcerated patients and the money owed to subcontractors, like the EMS agencies in Michigan? Might it like Corizon use the infamous Texas Two Step strategy, which involves splitting a company into two parts—one with most of the assets and the other with the bulk of the liabilities—and then filing the debt-laden company for bankruptcy? This strategy is why Corizon became Tehum Care, leaving a new company, YesCare with the assets and the liability with Tehum Care. Corizon as Tehum Care filed for bankruptcy seeking reductions in already agreed upon settlements to former incarcerated patients. But maybe following in the exact steps of Corizon/YesCare/Tehum Care might be too obvious and if Wellpath were to file for bankruptcy, it might forge its own unique and convoluted strategy.

Harry Truman was famously quoted as saying, “the buck stops here!”. Meaning he took full responsibility for his actions. In a perverse way, the proprietary correctional healthcare industry might say the same thing but meaning that the bucks, the very big bucks stop with them, but in their case, they might appear to take absolutely no responsibility for their actions.

Turning to our highlighted section on the election: last Friday, we at COCHS sent out a “Dear Colleague” letter about what the result of the election means for Medicaid coverage behind the walls of corrections. If you missed it, we provide a link to that letter. In addition, we are highlighting a posting by, Regina LaBelle, Director, Addiction Policy Initiative at The O’Neill Institute, Georgetown Law where she details what drug policy might look like in the Trump Administration. And finally in an article from Black Enterprise is a report about how prison companies like GeoGroup and CoreCivic welcome a new Trump administration in expectation of an increase in immigrant detentions.

Wellpath Bankruptcy Rumblings

The Berkeley County's (SC) jail former health care provider has missed settlement payments to eight women who reported being sexually abused by a male nurse. Circuit Judge Jennifer McCoy on Oct. 28 ruled Tennessee-based Wellpath has 15 days to pay the $1.5 million it agreed to pay earlier this year to settle lawsuits filed on behalf of the eight women.

State Reps. Jaime Greene and David Prestin are calling on the Legislature to take action to reimburse local EMS agencies for emergency calls to Michigan state prisons. “The failure of Wellpath and the lack of oversight have left our EMS agencies struggling financially. It’s time for the state to step in and reimburse these agencies – then seek to recover costs from Wellpath," said Greene. The Michigan Association of Ambulance Services estimates over $6 million in unpaid bills are owed to EMS agencies across Michigan.

Delinquent payments by the Michigan Department of Corrections (MDOC) former health provider Wellpath to EMS agencies will soon leave a portion of the Upper Peninsula without emergency response in some of its local communities. EMS providers operating near Michigan’s prisons provided emergency services to inmates in partnership with Wellpath, only to not receive payments for their treatment to patients.

The state of Michigan files suit against two Tennessee inmate healthcare providers for unpaid payments to third-party subcontractors. Recently the state of Michigan filed suit against Grand Prairie Healthcare and Wellpath Healthcare for breach of contract, in pursuit of damages to third-party subcontractor EMS agencies that total 35 million dollars. On Friday the Michigan Department of Corrections issued the statement.

Wellpath Holdings Inc., one of the largest providers of health-care services to prisons and jails across the US, is preparing to file for bankruptcy after struggling with an elevated debt load and high labor costs, according to people with knowledge of the matter. The company, owned by H.I.G. Capital, failed to repay a credit facility that expired on Oct. 1 and deferred interest payments on its other debt after entering a forbearance agreement with lenders, according to Moody’s Ratings. The credit grader said it views the actions as a default.

The company that provides health services in Vermont’s prisons, Wellpath, is preparing to file for bankruptcy, according to reporting from Bloomberg. The state began its contract with Wellpath in July 2023, which increased the annual cost of prison health services by 50% compared to its prior contract. Wellpath is owned by the private equity firm H.I.G. Capital. Last year, a whistleblower revealed the company’s top health-care administrator at the Springfield prison had lost his nursing license in three states.

Election 2024 Outcome

Following the recent election, momentum for Medicaid reforms in correctional settings remains strong with bipartisan and stakeholder support. Key figures, like Vice-President-elect JD Vance, have backed bills to ensure healthcare continuity for justice-involved individuals, reflecting a deepening commitment to healthcare equity. Supported by a coalition of diverse organizations, these efforts emphasize the need for regulatory frameworks in jails and prisons, building on bipartisan milestones like the Support Act to expand Medicaid in carceral settings.

Under a potential Trump administration, addiction and drug policy will likely focus more on law enforcement than public health, with support for expanded medication access and harm reduction initiatives facing mixed prospects. Law enforcement-centric approaches, including drug courts and pre-arrest diversion programs, are expected to continue, while federal backing for harm reduction may be limited. Additionally, Project 2025 could lead to a diminished role for the Office of National Drug Control Policy, potentially shifting more responsibility to agencies like the DEA or DOJ.

Private prison groups are cheering for President-elect Donald Trump’s plan for a massive deportation on day one of his term, labeling it as the “unprecedented opportunity” they’ve been waiting for. During an earnings call on Nov. 7, top-ranking private prison groups explained their excitement over a second Trump era. Members of GEO Group and CoreCivic feel the election results will increase government funding of private contracts for immigration detention, electronic tracking devices, and transportation of detainees from the United States to other countries.

Medicaid

Santa Clara County is one of the first in the state to implement a program that would provide health services to people who are set to be released from prison or jail through Medi-Cal. The Justice-Involved Reentry Initiative would provide medical and behavioral health services for Medi-Cal eligible adults and youth in state prisons, county jails and youth correctional facilities 90 days before their release. The counties of Inyo and Yuba were also participating in the program. By Oct. 1, 2026, all counties in the state will be required to implement the program.

As of September, more than 25 million Americans — including 1.9 million Floridians — had lost Medicaid coverage since the expiration of federal covid-19 pandemic protections in March 2023 that had kept people continually enrolled. Among them were patients in treatment for opioid addiction. It is unclear how many people with opioid addiction have lost coverage in the Medicaid disenrollment, known as the “unwinding.” Many people who lost their insurance in the Medicaid unwinding have since seen it reinstated.

This article provides a useful overview of the challenges people returning to communities from incarceration and the important role Medicaid can play in assisting in a successful transition.

Opioid Epidemic

Analysis of Medicaid data from 2016–2020 found that waiver implementation in seventeen states did not significantly improve overall medication treatment or reduce nonfatal overdoses among OUD enrollees, though it led to modest increases in methadone use and treatment for severe cases. These findings suggest that while waivers had limited impact on broad OUD outcomes, they may have slightly improved care access for high-need patients.

Individuals receiving methadone for opioid use disorder had a lower risk for discontinuing treatment compared with the combination of buprenorphine and naloxone. However, the findings revealed low mortality risk when receiving either treatment option. Treatment options for OUD also remain underutilized, with prior research showing that only one in five adults with the condition receive medication.

The Michigan Department of Corrections (MDOC) will be implementing a new system for verifying privileged mail sent to incarcerated individuals to increase safety and security. The new system, TextBehind DOCS, will be used by attorneys, courts, legal service organizations, consulates, and others that have the right to send confidential, privileged, and special handling mail to clients within prison.

The amount of fentanyl it takes to cause an overdose is 2 milligrams. That makes keeping the powerful drug out of jails or prisons tricky. The Alaska Department of Corrections has found small amounts of fentanyl in legal mail, such as letters from attorneys. That mail is constitutionally protected so in the past, prison staff didn’t open it. Alaska DOC has instituted a process where the legal mail is copied and handed to the incarcerated person. But the ACLU says that people have a right to privileged communication with their attorney. Other states use systems that protect attorney-client confidentiality and keep fentanyl out of prisons, like encrypted email for protected correspondence (see story above from Michigan Department of Corrections).

Seven Los Angeles County jail inmate were hospitalized after being exposed to an unknown substance at Men's Central Jail, an incident sheriff's officials have now described as a suspected overdose that led to several deputies also being medically evaluated. Some of the men were seen being escorted away from the jail in wheelchairs in aerial footage of the scene

Five people have died while in the custody of the Denver Sheriff Department as of early October this year, matching 2023's numbers. Fentanyl was involved in two of those deaths, another reminder of how pervasive the drug is in Colorado. The deaths in Denver are higher than other jails in counties with similar populations.

Incarcerated Women

The incarceration of women has risen astronomically, increasing by nearly 600% in the past few decades. As reproductive health faces a new wave of criminalization, we must include the criminal legal system in our analysis and discussion of women's health disparities. In particular, Black women are disproportionately criminalized and incarcerated.

As part of a sweeping two-year investigation into prison labor, The Associated Press found that correctional staff nationwide have been accused of using inmate work assignments to sexually abuse incarcerated women, luring them to isolated spots, out of view of security cameras. Many cases follow a similar pattern: Accusers are retaliated against, while the accused face little or no punishment.

First Nation People

Native American tribes in the Northwest are calling on Washington lawmakers to do more to help incarcerated Indigenous people who have been dying in local jails. Citing a handful of Native Americans who have died behind bars recently, the Affiliated Tribes of Northwest Indians say jails run by counties and cities need to do a better job treating incarcerated people dealing with drug use, withdrawal symptoms and suicide.

Incarcerated Elderly

Eric Topol's substak has an interview with Rachel Bedard who when she went to work on Rikers Island who was the first jail based geriatrician in the country. She worked in jail for six years and took care of elderly people with serious illnesses. Jails are not systems that adapt easily to emergency conditions. But during the pandemic she worked to get people who are sick out of jail so that they can get treatment and potentially die in a free setting.

Obituary

Dr. Ronald Shansky was a pioneering force in prison health reform, dedicating his life to improving healthcare for incarcerated individuals. As a federal court-appointed monitor and medical director for the Illinois Department of Corrections, Shansky made significant strides in providing mental health treatment and advancing standards for disease management. His compassionate, justice-centered approach influenced prison health guidelines making him a respected leader in correctional healthcare.

BOP

Investigators from federal agencies launched an “interagency operation” at the troubled lockup in New York City where Sean “Diddy” Combs is being held. The investigators from the Bureau of Prisons, the Justice Department’s inspector general’s office and other law enforcement agencies descended on the Metropolitan Detention Center in Brooklyn, the Bureau of Prisons. Those held there have long complained about rampant violence, dreadful conditions, severe staffing shortages and widespread smuggling of drugs and other contraband, some of it facilitated by employees.

An internal investigation by the Bureau of Prisons conducted last spring found that some staff at Florence used excessive force in violation of policy, and Andrew Ciolli, as warden, should have stopped it — but didn’t. Investigators referred him for disciplinary action. But he’s now landed a role as the director of the bureau’s Management and Specialty Training Center, which provides leadership training and specialized instruction across the agency.

Data & Statistics

A one-page fact sheet with statistics on prisons and jails. The fact sheet includes information on demographic differences in each type of institution, as well as sections on cost, mortality, and aging.

State Roundup

Alabama

A sergeant at an Alabama women’s prison has been arrested and charged with custodial sexual misconduct. Court records show that a woman incarcerated at the prison told an investigator that a correctional officer coerced her to perform sexual acts by threatening to write her up for disciplinary infractions unless she did what he said.

California

19 people died in the custody of Riverside County jails in 2022, its deadliest year in more than three decades. That rate ranked the jail system, run by the Riverside County Sheriff’s Department, among the most lethal in the nation, and the second-most in California. The deaths included homicides, drug overdoses, natural deaths and suicides. Riverside County agreed to pay more than $12 million to settle lawsuits related to jail deaths dating back to 2020.

Colorado

With Colorado prisons continuously struggling to recruit and retain staff, medical personnel in particular are running low, leading to burnout for those who are filling those positions and delayed care for those who are incarcerated. Dan Meyer is an attorney at the Spero Justice Center, which focuses on decarceration and ending extreme sentencing practices in Colorado. He said his organization regularly hears “extremely disturbing stories” about medical care within the system.

Georgia

The Center for Diversion & Services in downtown Atlanta is a place where police and the nonprofit PAD can bring people battling mental health concerns, substance abuse issues, homelessness or arrestable, low-level offenses. The facility is intended to take pressure off of Fulton County’s jail and court system. Services include a 24/7 sobering room, certified peer support, case management and referrals and a warrant resolution clinic. Individuals will also have access to showers and laundry services. Eligible guests must be 18 and older and must agree to the diversion.

Hawai'i

Claims that the tap water at an Arizona prison is making Hawaii inmates sick are “demonstrably false,” according to a joint statement issued Wednesday by Hawaii corrections officials and private prison operator CoreCivic. Hawaii holds about 1,000 state prisoners in CoreCivic’s Saguaro Correctional Center in Eloy, Arizona. Prisoners have complained they were becoming ill when they drink the water and suffering skin and eye irritation from water from the prison showers. A day after the ACLU went public with its concerns about the water quality, CoreCivic staff had started installing water filters.

Illinois

Peoria County Jail, which has the distinction, in recent years, of restraining its charges in chairs for longer durations than other jails in the state and far past industry recommendations. The jail restrained people more than 350 times from 2019 to 2023, with an overwhelming majority of the incidents involving some type of mental health issue. Experts caution that restraints should only be used as a tool of last resort and for a short period of time.

Kansas

Kansas prison officials have now allowed an Regena Robinson's mother and their attorney to visit after she was hospitalized and underwent surgery following a period of alleged indifference to her health concerns. A federal lawsuit filed by Robinson's mother, Carol Robinson, in U.S. District Court in Topeka alleges the Kansas Department of Corrections showed deliberate indifference to her serious medical needs and violated her constitutional rights. The lawsuit also alleged that Regena Robinson's family and her attorney had been denied access, and that KDOC was attempting to return her to Topeka Correctional Facility while she still needed inpatient care.

Minnesota

The state of Minnesota has given the Hennepin County jail eight days to reduce its inmate population by 239 people, saying the jail doesn’t have enough staff on duty and isn’t checking on inmates as often as it should. Since the Hennepin County Adult Detention Center’s last biennial inspection in September 2022, seven inmates have died either in the jail or after being transported from the jail for treatment.

Mississippi

An appeals court says a federal receiver can proceed with a takeover of the Raymond Detention Center in Hinds County where a judge found unconstitutional conditions and “a stunning array of assaults, as well as deaths.” A panel of the 5th U.S. Circuit Court of Appeals ruled Thursday that U.S. District Judge Carlton Reeves acted properly in 2022 when he appointed a public safety consultant to act as a receiver of the jail.

North Carolina

A coalition of eight North Carolina human and civil rights groups are demanding the release of nearly 2,000 incarcerated people to ease what they are calling “dangerous, inhumane overcrowding,” in state prisons — a situation exacerbated by Hurricane Helene. Last month, the North Carolina Department of Adult Correction announced that it transferred 2,190 people from five prisons in western North Carolina to facilities in the central and eastern parts of the state due to the storm.

Oklahoma

An Oklahoma County District Court Judge has dismissed a case brought by the Oklahoma County jail trust asking state health inspectors be banned from conducting surprise inspections. Oklahoma County District Judge Brent Dishman ruled State health inspectors shall be able to conduct surprise inspections at the Oklahoma County jail. The Health Department has a separate case pending against the Oklahoma County jail trust before the Oklahoma Supreme Court, asking for the jail to be ordered to allow state health inspectors in at any time –see Editor’s Note of September 17, 2024 .

According to Mental Health America, Oklahoma ranks 47th in mental health treatment. An interim Monday on mental health treatment in the Oklahoma County Detention Center highlighted what are key issues, including lack of access to care, overcrowding and inadequate mental health resources. State Rep. Jason Lowe, D-Oklahoma City, a criminal defense attorney, held the study with the House Criminal Justice and Corrections Committee at the Capitol to highlight mental health issues in Oklahoma jails during what he called a nationwide crisis.

Pennsylvania

The University of Pennsylvania Carey Law School and several student groups hosted a panel calling for restorative justice following the damaging medical experiments conducted by the late Penn dermatologist Albert Kligman. Between 1951 and 1974, Kligman tested viruses, fungi, and chemical agents, including asbestos, on hundreds of incarcerated individuals — most of whom were Black — at the prison, which was located in Northeast Philadelphia.

Texas

The Texas Department of Criminal Justice’s staffing shortages harm the safety of staff, inmates, and the public, state lawmakers found in a new report, as the nation’s largest state prison system aims to better handle an inmate population of more than 130,000. The key takeaway: a large inmate population and a changing workforce have created a “staffing crisis” that makes it “almost impossible” to adequately staff some facilities, making them more dangerous for staff and inmates alike.

Varmnot

A first of its kind forum put three candidates for statewide office in front of prospective voters, who happen to be residents of Southern State Correctional Facility. The event celebrated Vermont’s distinction as one of only three jurisdictions, alongside Maine and Washington D.C., that allows its incarcerated population to vote. While incarcerated people in Vermont have voting rights, access can still be a challenge. Prisons aren’t polling places, and prison residents can’t typically meet candidates to decide who to vote for.

Correctional Nursing

The integration of healthcare and security is vitally important to the provision of healthcare in correctional facilities, but there must be policies and procedures that mandate discussion of the healthcare need in question and how it will be best addressed. Sometimes, there are general circumstances that can be directly addressed in the policies and procedures, but most often issues arise with the care of a particular patient, and so it is vitally important that the mechanism is set for discussion and resolution.

Prison Contractors

GEO Group s suing California and a Kern County health officer over a state law signed this year that allegedly violates the Constitution. Senate Bill 1132 gives county and city health officers the authority to investigate a private detention facility, including all of California’s Immigration and Custom Enforcement (ICE) detention centers. GEO Group argues in the lawsuit that filed last week that SB 1132 violates the supremacy clause of the Constitution by giving state control over federal contractors.

Proprietary Correctional Health Care Vendors

VitalCore

Changes at the El Paso County jail meant to decrease deaths were on display this week as Sheriff Joe Roybal led county commissioners on an annual walk-through of the facility. The El Paso County jail has received scrutiny over recent deaths in which inmate families have alleged neglect from the facility. In 2022, 11 people died in custody. In January, the Sheriff's Office switched medical providers from Wellpath to VitalCore.

Turn Key Health Clinics

An Oklahoma man in police custody in Sebastian County, Arkansa suffered a medical emergency and died in hospital. Arkansas State Police investigators are handling a probe into the man's death. Simultaneously, Sebastian County investigators are conducting an internal investigation to review whether policies and procedures were followed in the handling of the emergency. In September, Sebastian County and health provider Turn Key Health Clinics LLC reached a $6 million settlement with Larry Eugene Price Jr.'s family to settle a lawsuit filed over Price's 2021 death from dehydration and malnutrition

NaphCare

The County of San Diego will pay $4.95 million to the mother of Michael who died as a result of a lack of medical care inside Central Jail in February 2019. The County agreed to settle a lawsuit filed by Phyllis Jackson, the mother of 32-year-old Michael Wilson on October 23, days before the trial was set to begin. (For more context on the Michael Wilson story see article below.)

Correctional Healthcare Partners founder, Dr. Peter Freedland, is a defendant in the Michael Wilson case, which could go before a jury later this year. According to his family’s lawsuit, Michael Wilson died of congestive heart failure even though jail officials knew about a pre-existing condition that required constant monitoring and treatment. Before he was returned to custody for a probation violation, a judge warned sheriff’s officials that Wilson required special care, court records show. Correctional Healthcare Partners has been serving as a subcontractor, providing medical staffing to NaphCare.