For months, a Michigan ambulance service has been stretched thin, struggling to cover 650 square miles in the eastern corner of the Upper Peninsula.
Kinross EMS has cut back a crew but still provides 24-hour service to Chippewa County. It’s operating, essentially, paycheck to paycheck with no extra funding in the bank. And it’s about to take on more work when a neighboring EMS disbands in a couple of months.
“We pretty much ran through our funds balance. Now we’re working week to week, month to month,” said Kinross EMS Director Renee Gray.
The issue: unpaid prison bills
It ties back to a bankrupt healthcare company that was contracted to provide services to the Michigan Department of Corrections but allegedly left behind millions in unpaid bills.
The state is now suing Grand Prairie Healthcare Services and Wellpath over the debt owed to contractors. It’s one of 1,500 lawsuits that have been brought against Wellpath in recent years.
And Kinross EMS, with its 38 employees, has been caught in this fallout.
The rural ambulance provider says Wellpath owes them nearly half a million dollars – a sizeable 10% hole in their annual budget.
“It’s strapping us,” Gray said.
Kinross is one of at least 15 Michigan EMS providers waiting on Wellpath to pay its bills.
That’s why the Michigan Association of Ambulance Services and several lawmakers have been pushing the state to reimburse the EMS providers while the breach of contract lawsuit is pending.
“EMS agencies can no longer continue to carry that debt on their books,” said Angela Madden, executive director for the Michigan Association of Ambulance Services.
Wellpath said it is unable to comment on the issue at this time.
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A contract that fell apart
In 2021, Michigan awarded a new $590 million contract to Grand Prairie Healthcare Services to provide healthcare, psychiatric care and dental care to inmates at 27 prisons.
Grand Prairie partnered with Wellpath, one of the nation’s largest for-profit prison healthcare providers, which is owned by private equity firm H.I.G. Capital.
The five-year contract was celebrated at the time with Wellpath saying it would “make the transition seamless and transparent” for staff and patients.
But things quickly soured.
Grand Prairie and Wellpath “frequently failed to pay subcontractors” in a timely manner and “the situation became worse as time went on,” according to lawsuit brought by the Michigan Department of Corrections and the Michigan Department of Technology, Management and Budget in Ingham County Circuit Court last fall.
Only three years into the contract, Michigan switched to VitalCore, another healthcare vendor, because of Grand Prairie’s “dismal performance.”
The Michigan Department of Corrections says it made “full payment for services” to fulfill the contract, but Grand Prairie and Wellpath didn’t pay its contractors. The state still doesn’t know exactly how much debt Grand Prairie left behind, but it’s estimated, as of April 2024, the company owed $35 million.
“Grand Prairie and Wellpath have failed to provide updated outstanding payment data, despite numerous requests from the state,” the Michigan Department of Corrections said in a statement.
Because of the unpaid bills, some contractors have refused to continue providing treatment to Michigan prisoners, the lawsuit alleges. And some third-party providers have raised their rates for the state by 150% to 200%.
The complaint also alleges the debt has even caused prisoners to “receive collection notices from debt collectors for medical bills that defendants did not pay.”
Two months after Michigan brought the lawsuit, Wellpath filed for Chapter 11 bankruptcy with $644 million of debt.
The company cited “significant financial challenges” in recent years including “escalating operating and labor costs, a transitory increase in professional liability insurance expenses, and underperformance on several significant contracts.”
Michigan EMS waiting on payments
The contract dispute has been particularly straining for Michigan ambulance providers.
During 2023 and 2024, Wellpath relied on more than a dozen EMS agencies to respond to Michigan prisons. But the Michigan Association of Ambulance Services says the company has not reimbursed those agencies for roughly $6 million worth of services rendered.
“The payroll, the gas, the supplies – everything has already been spent and the bills were not paid,” Gray said.
For Kinross EMS, this has totaled $434,000 for 224 trips to Chippewa County Correctional Facility.
Gray, who’s worked with Kinross EMS for 19 years, says the agency usually keeps at least three months of operating funds in the bank. But because of the unpaid bills, this has dwindled down to about 10 days – leaving Kinross EMS with no buffer for any mishaps.
Anything major, like a truck breaking down or needing new radio equipment, could spell disaster.
“We can only maintain that so long before the inevitable of something drastic happening,” Gray said. “You can’t count on everything being a perfect world every day.”
Kinross EMS also cut down a crew, operating with three trucks on the road instead of four.
On top of that, Kinross EMS is about to absorb a bigger swath of Chippewa County.
Kinross will add De Tour, a village on the eastern tip of the Upper Peninsula, to its already long list: Kinross, Kincheloe, Rudyard, Dafter, Pickford, Raber, Bruce Township, Marquette, Neebish Island and Smithers Winter Test Center.
De Tour EMS plans to dissolve in June because most of its volunteers are in their 70s, eyeing retirement.
“There’s no young people coming on board to help us,” said Candace Postula, who’s been volunteering with De Tour EMS for more than 50 years.
The agency, which also provides support to Drummond Island, was planning to disband in April but pushed that deadline back to give Kinross EMS more time to prepare.
“We don’t want to leave the area uncovered,” Postula said. “We’re just going to put our lives on hold for two more months.”
A push for funding
Since last summer, ambulance providers have been urging Michigan lawmakers to help.
“We’re not asking for any sort of handout or anything like that,” Gray said. “We’re just asking that the state pays their bills.”
The Michigan Association of Ambulance Services asked the state legislature last year to appropriate $6 million to temporarily cover Wellpath’s unpaid bills. Madden says they want the state to pay the debt now and “recoup the funds” once the litigation is done.
Without that, it could take years for bankruptcy proceedings and civil lawsuits to be settled.
Several state lawmakers are backing this request.
State Rep. Phil Green, a Republican from Watertown Township, proposed amending a budget bill last year to redirect emergency funds and reimburse EMS providers. In his district, he says a Lapeer County EMS is owed $100,000 for transporting inmates.
Last October, State Rep. Jamie Greene and Dave Prestin penned a letter to both Appropriations Committee Chairs Angela Witwer and Amos O’Neal asking the legislature to provide immediate funding to reimburse EMS agencies.
“It’s just a bad situation for the state of Michigan, it’s a bad situation for corrections and it’s a really bad situation for these EMS agencies,” Prestin said.
Those efforts, which faltered last year, have been rekindled in the new legislative session.
Prestin, who represents a portion of the Upper Peninsula, has been trying to figure out the “best path forward” through the state budget or supplemental budget bill.
“We’re going to look at this on a triage level,” he said. “We’re putting the ones that are the most at risk at the front of the line. But with the plan of everybody being made as close to whole as we can.”
Another state lawmaker is pushing for a deeper investigation into the unpaid bills.
State Sen. Roger Hauck, a Republican from Mount Pleasant, asked Attorney General Dana Nessel and Auditor General Doug Ringler in September to review the state’s contract with Grand Prairie and Wellpath.
Hauck says Michigan awarded the contract because the “cheapest option may have seemed like a good decision at the time.” But he now questions why the state agreed to let Grand Prairie and Wellpath walk away despite the unpaid bills.
“Rather than ensuring these outstanding payments were resolved, the state transitioned the contract to VitalCore Health Strategies, leaving many providers in a precarious position with no clear path to recovering what they’re owed,” he said in a statement.
Michigan also offered the contract despite Wellpath’s questionable track record: accusations of wrongful deaths and negligent care at prisons throughout the country.
In Michigan, this includes a case settled after a woman suffered multiple brain hemorrhages while she was an inmate at the Muskegon County Jail in 2020. Wellpath also paid a $1.3 million settlement after a man died because he didn’t get proper care while in Macomb County jail.
“We need to do a better job of vetting these vendors,” Prestin said.
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