(The Center Square) – Emergency Medical Service providers in Michigan’s eastern Upper Peninsula now have no way of directly recouping nearly $6 million in unpaid claims after Wellpath Holdings, Inc., the former health care provider for the Michigan Department of Corrections, recently declared bankruptcy.
EMS services operating near state prisons served inmates in partnership with Wellpath, only for the organization to terminate its contract with the MODC in April and abandon its unpaid bills. The November bankruptcy filing leaves at least 15 EMS agencies across the state in financial distress and endangers the availability of emergency services for Michiganders in the eastern U.P.
Wellpath CEO Ben Slocum said in a press release the culmination of COVID-19 pandemic challenges, high inflation and rising interest rates left Wellpath in crippling debt–more than $644 million, according to court documents–to its service providers.
“After evaluating our options, the board and management team determined that a court-supervised process to facilitate a sale of our Recovery Solutions and a separate reorganization of Wellpath Correctional Healthcare is the best path forward to strengthen our financial foundation and stabilize Wellpath for the long-term,” Slocum said.
The Michigan Association of Ambulance Services has called on the state of Michigan to step in and reimburse EMS providers through a budget supplemental before the lame duck session concludes.
“EMS providers operate on thin margins and cannot afford to not be compensated for millions in emergency care,” MAAS Executive Director Angela Madden said. “Wellpath’s actions have put EMS agencies in an unwinnable position and it’s time for the State of Michigan [to] right this wrong.”
EMS providers in the eastern U.P. are warning that if they do not receive compensation within the next few months, they will be forced to shut down, leaving Michigan residents and state prisons in that area without emergency care.
“EMS providers show up and provide emergency care no matter what, but that can’t happen if we aren’t compensated for our work,” said Jeff White, Chief of Richmond Lenox EMS, which serves portions of Macomb and St. Clair Counties. “We need the State of Michigan to rectify this situation before the health and safety of our communities is at further risk.”
Wellpath has promised “to pay vendors and suppliers in full under normal terms for goods and services provided during the chapter 11 cases.” It did not specify whether it intends to pay debts to services provided before filing for bankruptcy.
Wellpath did not immediately respond to a request for comment.