Michigan EMS Chasing $6 Million in Unpaid Prison Transport Fees

When it comes to unpaid accounts, $6 million is a lot of money. Coincidentally, that’s how much EMS agencies in Michigan are trying to recoup from the Michigan Department of Corrections (MDOC) for serving state prison inmates between April 2023 and April 2024. So far, there’s no sign that the bill will ever be paid.

Here’s the problem: The $6 million was supposed to have been paid to Michigan EMS agencies by Wellpath, “which was the contract health insurance provider for inmates and prisoners within the Michigan Department of Corrections facilities,” said Angela Madden. She is the Executive Director of the Michigan Association of Ambulance Services (MAAS), which represents close to 100 EMS agencies in the state. “Wellpath had received this money from MDOC and they were supposed to pay the Michigan EMS agencies that had provided them with services. But when the state changed providers in May 2024, these agencies still hadn’t been paid for this time period.”

MAAS’ efforts to get this $6 million debt paid have been underway for just over a year.

“Back then is when we received our first complaint from an agency about non-payment of claims by Wellpath,” Madden said. “Upon investigation, after the first couple of complaints that we received, it was determined that this was in fact a statewide issue for all agencies dealing with Michigan Department of Corrections facilities, where inmates had been transported due to medical emergencies from MDOC facilities.”

Once MAAS had determined that EMS agencies across Michigan were having issues being paid for state inmate transports and treatments, “we reached out to Wellpath,” said Madden. “They strung us along for a little bit ‘doing research on the issue’. Then they informed us that they were no longer able to pay claims and that they would not be paying any claims.”

“My understanding is yes, that the Michigan Department of Corrections has in fact paid Wellpath, whether or not it was for these claims specifically or for other health coverage that they provided to the inmates via the hospital or other healthcare providers,” she added. “What I do know is that EMS agencies in the state of Michigan haven't been paid for their work and the work has been completed.”

Trying to get this $6 million debt paid is proving to be a hard struggle for MAAS. Since the MDOC was the end client for the services rendered, the association has asked them for assistance. “MDOC has been helpful in assisting us in researching this issue,” said Madden. “They have been helpful in communicating to Wellpath on our behalf for us and then back to us. Unfortunately, since MDOC made payment to Wellpath, the state believes that the collection issue is between Wellpath and the individual EMS providers.”

MAAS has also reached out to Wellpath, but with no success. Asked by EMS World if Wellpath had refused to pay the outstanding bills, Madden replied, “Correct”.

Given this situation, MAAS has asked Michigan’s Department of State Attorney to take legal action against Wellpath to get the outstanding $6 million. “However, as you can imagine, the litigation process is a lengthy one,” said Madden. “In the interim, we have requested that the state of Michigan do a supplemental budget bill to immediately reimburse us for the work that we have already completed — and then they should be the party that files that litigation against Wellpath.”

If there is any good news to be found in this situation, it is that Michigan state legislators appear to be sympathetic to their EMS agencies’ financial plight, and are willing to pass a supplemental budget bill this fall, Madden told EMS World. One legislator who has put her support on the record is State Representative (Republican-Richmond) Jaime Greene. In an August 28, 2024 news release, she is quoted as saying, “This is absolutely outrageous. Our EMS providers put their lives on the line every day to ensure that all patients, including those incarcerated in our prisons, receive the emergency care they need. Now, they’re being told they won’t be paid for the services they provided. It’s time for the Legislature to step in and right this wrong.” According to Greene’s news release, “Wellpath is placing blame on the Michigan Department of Corrections, claiming administrators there did not disclose that Wellpath would be responsible for paying emergency responders.”

“As you might imagine, Wellpath [owned by the private equity firm H.I.G. Capital] has a different set of numbers than we do,” said Madden. “They believe they owe a substantially lower amount than what we have been tracking. So in the meantime, we are busy going claim by claim and ensuring that we have accurate data to provide to the Michigan legislature, to the Department of Corrections, to the Attorney General, and then directly to Wellpath.”

In the meantime, the affected Michigan EMS agencies are struggling to survive the current $6 million payment shortfall. “It is having a tremendous impact and that level of impact varies depending on their geographic makeup,” Madden said. “I have not heard anybody tell me they're going to have to turn the lights off or not make payroll. I have heard rumblings of perhaps delaying potential supply purchases or maybe not purchasing certain new pieces of equipment when they had originally budgeted to do so, based on the expectation that these claims would have been paid. As well, given our current staffing crisis, we absolutely want to make sure that our employees are paid accordingly. By having this debt hanging over our heads, it is making this very difficult and we would hate to have to balance our budgets on the backs of our employees today.”

The only silver lining to this cloud is that MDOC’s new healthcare provider, VitalCare, is paying for EMS transport on time. “They took over the contract effective May 1st, 2024, and I do believe payments after a small hiccup that every new system unfortunately has to go through, VitalCare has begun paying claims,” said Madden. “Everything seems to be working on the claim submission and compensation sides appropriately and accordingly.”