Press Release: 2024-12-20
Warren Urges Wellpath to Commit to Fair Payouts and Fair Notice for Incarcerated Patients During Bankruptcy Process
“It is critical that Wellpath commit to ensuring fair payout to creditors, particularly incarcerated patients harmed by medical malpractice, as well as local health care providers and contracting partners.”
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) sent a letter to Wellpath — one of the nation’s largest private providers of prison healthcare — following its declaration of bankruptcy, urging them to ensure that incarcerated patients with credible, serious tort claims against the company — as well as staff and other creditors — receive fair notice and fair compensation in the course of Wellpath’s bankruptcy proceedings.
On November 11, 2024, Wellpath, the private equity-owned, for-profit company and one of the nation’s largest private providers of health care services in prisons and jails, filed for bankruptcy in the Southern District of Texas. Although the company has faced financial stress, Wellpath still earns over $2 billion in revenue per year from state, local, and federal jail and prison contracts.
Wellpath’s bankruptcy is part of a growing trend of private equity-backed health care companies — including in the prison health care market — filing for bankruptcy when faced with serious claims. For example, in 2023, Wellpath’s peer company Corizon — another private equity-backed prison health care provider — filed for bankruptcy in the Southern District of Texas and attempted to use the notorious “Texas Two-Step” maneuver to avoid adequately compensating incarcerated tort claimants. In addition to trying to hide assets from creditors, Corizon attempted to coerce victims into accepting lower settlements, obscure its ownership structure, and deprive victims of meaningful justice against third parties, all while providing victims insufficient notice of their rights.
Like Corizon, Wellpath has faced a flood of lawsuits challenging the health care provided. Currently, Wellpath and its affiliates are fighting more than 1,500 lawsuits, primarily alleging deficient medical care. For example, Wellpath staff allegedly refused to provide a schizophrenic man his prescribed medication in a California jail, leading to his attempted suicide, and failed to provide antibiotics to treat a woman’s infection at a Colorado jail, leading to her death nine days after she entered the facility. Senator Warren urged Wellpath to “avoid Corizon’s missteps.”
“Many Wellpath claimants are now concerned that their suits are being stayed during the pendency of the company’s bankruptcy proceedings — and that they may receive only pennies on the dollar in compensation for viable claims,” wrote Senator Warren. “It is critical that Wellpath commit to ensuring fair payout to creditors, particularly incarcerated patients harmed by medical malpractice, as well as local health care providers and contracting partners.”
Finally, Senator Warren noted that there have been multiple reported instances of Wellpath personnel destroying evidence in ongoing litigation and pushed Wellpath to take steps to ensure that documents relevant to these proceedings are preserved.
“Our bankruptcy system provides companies with the opportunity for a fresh start,” concluded Senator Warren. “Wellpath must not abuse that system to avoid paying what it owes to incarcerated patients with credible claims against it.”
Senator Warren has been a leader in fighting for the health of those in custody:
- In August 2024, Senator Warren and other lawmakers sent a letter to federal health agencies urging key investments to improve the quality of care in prisons, jails, and detention centers.
- In February 2024, Senator Warren sent a letter to the DOJ, raising concerns about the abuse of the bankruptcy system by Corizon Health, Inc.
- In December 2023, Senator Warren and other lawmakers raised concerns over Wellpath’s inadequate health care services in prisons and jails nationwide.
- In October 2023, Senator Warren and other lawmakers sent a letter to Corizon Health, Inc.-affiliated companies Tehum Care Services, Inc. and YesCare Corporation (together, “Corizon”), expressing concern about poor-quality health services provided to incarcerated people in jails and prisons around the country.
- In March 2021, Senator Warren and lawmakers sent a letter to the U.S. Department of Justice Office of the Inspector General (OIG) urging them to conduct a comprehensive review of all COVID-19-related deaths of incarcerated individuals in the custody of the Federal Bureau of Prisons (BOP) and BOP staff since the beginning of the pandemic.
- In November 2020, Senator Warren and lawmakers sent a letter to the Department of Justice (DOJ) and the Federal Bureau of Prisons (BOP) seeking information about the status of medical copays in correctional facilities during the COVID-19 pandemic.
- In January 2020, Senator Warren led a letter to Immigration and Customs Enforcement (ICE) and the Federal Bureau of Prisons (BOP) questioning their anti-corruption policies and practices after a series of high-profile officials responsible for oversight of the private prison and detention industry left to join the biggest companies in the industry.
- In September 2019, Senator Warren and lawmakers sent a letter to DHS and HHS expressing serious concerns over DHS’s announcement that migrant families detained at U.S. Customs and Border Protection (CBP) holding centers would not be vaccinated for the flu ahead of that year’s flu season.
- In July 2019, Senator Warren sent a letter to Jennifer Costello, Acting Inspector General (IG) of the Department of Homeland Security (DHS), requesting that the IG conduct an investigation into the use of solitary confinement and other punishments to coerce participation in “voluntary” work programs at federal and federally-contracted immigration detention facilities, and the role of Immigration and Customs Enforcement (ICE) policies, procedures, and guidance in such practices.
- In April 2018, Senator Warren and other lawmakers sent a letter to Deputy Director of Immigration and Customs Enforcement (ICE) Thomas Homan, requesting information about a recent policy change allowing for the increased detention of pregnant women in ICE detention facilities.