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Corizon Health: A Controversial Prison Healthcare Company Facing Bankruptcy and Lawsuits

Corizon Health is one of the largest and most controversial private prison healthcare companies in the United States. It provides medical, dental, mental health, and pharmacy services to over 100,000 inmates in 15 states, including state prisons, municipal jails, and other facilities. However, Corizon Health has also been accused of putting profits ahead of patients, delivering substandard and negligent care, and facing hundreds of malpractice lawsuits and investigations. In 2021, Corizon Health filed for bankruptcy in a complex and disputed maneuver that could shield its assets from its creditors and claimants. In this blog post, we will explore the history, business model, controversies, and bankruptcy of Corizon Health, and how it affects the inmates and the public.

History of Corizon Health

Corizon Health was formed in 2011 by the merger of two rival prison healthcare companies: Correctional Medical Services (CMS) and Prison Health Services (PHS). Both companies had a long history of providing healthcare to correctional facilities since the 1970s, but also faced criticism and lawsuits for their poor performance and misconduct.

Corizon Health inherited the contracts, assets, liabilities, and reputation of its predecessors. It also faced new challenges from the changing landscape of the prison healthcare industry, such as increased competition, regulatory scrutiny, budget cuts, and inmate population growth. Corizon Health struggled to maintain its profitability and market share, losing several contracts to its competitors and facing financial difficulties.

In 2020, Corizon Health was acquired by Flacks Group, a private investment company based in Miami. Flacks Group claimed that it would invest in Corizon Health’s growth and improvement, but also implemented a controversial restructuring plan that involved splitting Corizon Health into two entities: YesCare and Corizon LLC.

Business Model of Corizon Health

Corizon Health operates as a for-profit corporation that contracts with state and local governments to provide healthcare services to inmates. Corizon Health typically bids for contracts based on a per diem rate or a capitated rate, which means that it receives a fixed amount of money per inmate per day or per month regardless of the actual cost or quality of care.

Corizon Health claims that it can provide better and cheaper healthcare than the public sector by leveraging its economies of scale, expertise, technology, and innovation. Corizon Health also claims that it can reduce recidivism and improve public health by addressing the physical and mental health needs of inmates.

However, critics argue that Corizon Health’s business model incentivizes cutting corners and compromising care in order to maximize profits. Critics allege that Corizon Health understaffs its facilities, underpays its employees, undersupplies its equipment and medication, underdiagnoses and undertreats its patients, and underreports its errors and incidents.

Controversies of Corizon Health

Corizon Health has been involved in numerous controversies over its provision of prison healthcare. Some of the most notable ones are:

  • Malpractice lawsuits: Corizon Health has been sued for malpractice at least 660 times between 2011 and 2016. Many of these lawsuits allege that Corizon Health failed to provide adequate or timely care to inmates suffering from serious or life-threatening conditions, resulting in preventable deaths or injuries. For example, Hector Garcia died of a perforated ulcer after being ignored by Corizon Health staff at a New Mexico jail. William Kelly developed stage 4 kidney cancer after being denied proper diagnosis and treatment by Corizon Health staff at a Michigan prison.
  • Investigations: Corizon Health has been investigated by various authorities for its compliance with laws and standards regarding prison healthcare. For example, in 2016, the Department of Justice found that Corizon Health violated the constitutional rights of inmates at an Idaho prison by providing grossly inadequate medical care. In 2018, the New York State Commission of Correction found that Corizon Health contributed to the death of six inmates at Rikers Island jail by providing deficient care.
  • Scandals: Corizon Health has been involved in several scandals that exposed its unethical or illegal practices. For example, in 2015, Corizon Health agreed to pay $8.3 million to settle allegations that it fraudulently billed Medicaid for services that were not provided or were ineligible. In 2017, Corizon Health was accused of smuggling drugs into a Florida prison through its employees.

Bankruptcy of Corizon Health

In 2021, Corizon Health filed for bankruptcy protection under Chapter 11 in Texas. However, this was not a typical bankruptcy case. Instead of filing as one entity, Corizon Health split itself into two entities: YesCare and Corizon LLC. YesCare is the new name of Corizon Health’s operating company, which provides healthcare services to inmates. Corizon LLC is the new name of Corizon Health’s holding company, which owns the assets and liabilities of Corizon Health.

According to Corizon Health, this restructuring plan was designed to reduce its debt burden, improve its liquidity, and enhance its operational efficiency. Corizon Health claimed that it had the support of its major creditors and that it would continue to provide uninterrupted care to its patients.

However, according to a lawsuit filed by a former Corizon CEO, this restructuring plan was actually a fraudulent scheme to shield Corizon Health’s assets from its claimants, especially the hundreds of malpractice plaintiffs. The lawsuit alleges that Corizon Health transferred its valuable assets, such as contracts, cash, and intellectual property, to YesCare, while leaving its liabilities, such as lawsuits, debts, and taxes, to Corizon LLC. The lawsuit also alleges that Corizon Health concealed its true financial condition and manipulated its books to justify its bankruptcy filing.

The bankruptcy court has not yet approved or rejected Corizon Health’s restructuring plan. Meanwhile, all the lawsuits against Corizon Health have been stayed, meaning that they cannot proceed until the bankruptcy case is resolved. This could take months or years, leaving the plaintiffs in limbo and potentially depriving them of justice and compensation.

Conclusion

Corizon Health is one of the largest and most controversial private prison healthcare companies in the United States. It provides medical, dental, mental health, and pharmacy services to over 100,000 inmates in 15 states. However, Corizon Health has also been accused of putting profits ahead of patients, delivering substandard and negligent care, and facing hundreds of malpractice lawsuits and investigations. In 2021, Corizon Health filed for bankruptcy in a complex and disputed maneuver that could shield its assets from its creditors and claimants.

Corizon Health’s bankruptcy case raises important questions about the accountability and transparency of private prison healthcare providers. It also highlights the challenges and risks of outsourcing public health services to for-profit corporations. It also affects the lives and rights of inmates and their families who depend on Corizon Health for their healthcare needs.

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