Multiple ambulance agencies in Michigan are facing hundreds of thousands of dollars in debt after two prison healthcare companies contracted by the state allegedly failed to make payments. The Michigan Association of Ambulance Services says impacted members are out $6 million collectively, leaving some to forgo upgrades and struggling to make payroll.
Renee Gray is the director of Kinross EMS, an ambulance service in the eastern Upper Peninsula. She said they’re facing $430,000 dollars in debt.
“It has caused so much stress administrative wise that I can't even fathom," she said. "We are constantly watching the dollar week to week, trying to figure out can we make it to the next payroll."
Gray says the contractors, Grand Prairie Health and Wellpath, stopped paying for years, leaving 224 ambulance trips unpaid for. Kinross EMS carries about 2,300 people annually, including 300 prisoners in a nearby state facility.
“Dismal Performance”
Kinross EMS is just one of Grand Prairie and Wellpath’s many debtors in Michigan. The state MDOC is suing the company for over $35 million in missed payments.
Other EMS systems are in debt, including Jackson Community EMS ($630,179), Lapeer County EMS ($140,000) and Richard Lennox EMS in southeast Michigan, who were shorted $134,000.
In 2021, The Michigan Department of Corrections agreed to a $590 million contract with Grand Prairie and Wellpath, making them the official healthcare provider for state prisoners. Grand Prairie acted as a subcontractor for Wellpath, one of America’s largest prison healthcare companies.
The companies were supposed to pay providers for EMS trips, doctor’s visits, drug purchases, and other medical procedures state prisoners receive, similar to how a health insurance provider covers those costs for people on the outside.
However, the state of Michigan says the companies failed to pay for services. The state exited the contract two years early in 2024 and filed their lawsuit. The state argued the companies engaged in “dismal performance,” and repeatedly asked for more money and failed to pay contractors.
Wellpath has been hit with over 1,500 lawsuits around the country in recent years over debt and allegations of malpractice.
“It could increase response times”
Angela Madden is the executive director of the Michigan Association of Ambulance Services. She said the MDOC's lawsuit is on hold amid bankruptcy proceedings, which could take years, and many other creditors will be paid first.
Madden argues the state is responsible for compensating the impacted EMS systems because they signed the contract.
“The fact that there is an expectation that EMS agencies to receive some of these funds that we are owed from those bankruptcy filings is absurd," Madden told WCMU. "It's highly unlikely.”
When Wellpath exited Chapter 11 Bankruptcy last year, they had $644 million in debt. The company was able to settle about $15.5 million in a creditor settlement and spun off its behavioral health division to cancel $375 million in debt.
State legislators are pushing to get the impacted EMS systems compensated with a $6 million dollar line item; however, every attempt has failed. This includes an effort undertaken during negotiations over the last state budget this fall.
If the EMS systems are not compensated, Madden says, members will be forced to forgo upgrading or replacing equipment like ambulances, stretchers and heart monitors. EMS systems will also run into issues with hiring.
“Not being able to hire or backfill positions when we see attrition or retirements would then shrink our staffing," she said. "Which could then potentially have a negative impact on the greater public health and safety.”
Gray said Kinross EMS has to resort to keeping staffers part-time.
State lawmakers have raised issues with the contract, saying the MDOC should have been more considerate in awarding it. State Sen. Roger Hauck, R-Mount Pleasant, called for an audit of the contract in 2024.
“While selecting the cheapest option may have seemed like a good decision at the time, it’s now clear both companies under-projected costs,” he said in a statement.
Kinross EMS has consolidated into a collective of other area EMS groups. The Northern EMS Authority was made to improve performance, help local townships deal with debt and improve cross departmental communication.
If the state can’t pay back the service, Gray said the EMS service will “scrimp along as best we can.” She added that “services could be stopped to some areas eventually.”
Wellpath did not respond to a request for comment and Grand Prairie could not be reached by press time. Gov. Gretchen Whitmer’s office did not reply to a request for comment, but the MDOC reiterated in a statement that it's suing the companies and seeking damages.
