A prison cell in Holman Correctional Facility in Atmore, Alabama, as seen on Oct. 22, 2019. The Alabama Department of Corrections abruptly canceled a $1 billion health care contract for what it said was the contractor's "failure to adequately fulfill its contractual duties." (File)
The Alabama Department of Corrections has terminated a $1 billion health care contract with a troubled Tennessee company for what it called a “failure to adequately fulfill its contractual duties.”
ADOC said it terminated the 5-year contract that it awarded in 2023 had with Tennessee-based YesCare after it was reported that the company could not meet payroll to pay its employees.
“To ensure uninterrupted medical service, ADOC is working to execute an emergency agreement with NaphCare to provide inmate healthcare services,” Corrections said in a statement on Thursday.
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ADOC also said it would officially change the vendor to NaphCare on May 3.
A message was sent to the company on Thursday seeking comment.
Charles Williams, deputy commissioner for ADOC, told lawmakers at a meeting of the Joint Prison Oversight Committee on Wednesday that ADOC had switched to NaphCare, based in Birmingham, “over the weekend.”
“We are on an emergency contract right now,” he said. “It is an emergency contract with NaphCare because we wanted to make sure that the population gets the care that they should receive.”
Williams did not disclose the terms of the new contract that was approved, but it will eventually be before the Legislature at the Contract Review Committee that meets monthly.
“Our immediate focus is making sure this transition is smooth—for both patients and staff,” NaphCare said in a statement that was included in the ADOC news release. “Continuity of care is critical, and we’re committed to maintaining it from day one.”
The leadership that will oversee the health care in the prisons will be comprised of people from both companies, according to Williams, but the staff that provides health care to people in ADOC custody will remain the same.
The change happened several days after reports that several YesCare employees did not report to work because they had not been paid. Their paychecks were eventually deposited after a few days.
“The ADOC continues to work with YesCare to ensure health care services are uninterrupted for the inmate population,” ADOC said in a statement provided on April 14. “The ADOC is also in discussions with YesCare to prevent any future payroll delays.”
Members were surprised when they learned that ADOC had terminated the contract.
“We just found out today,” Rep. Chris England, D-Tuscaloosa, said in an interview following the meeting. “We literally just found out that we have a new health care provider in our health care system today.”
He added, “Did we break news today?”
The Wall Street Journal reported in March that YesCare forfeited its protection from Chapter 11 bankruptcy after it failed to make its required payment installments to a creditor last month.
“Who knew that a company that started off bankrupt, who took this deal so it can pay creditors, ended up bankrupt?” England said. “Who couldn’t see that coming? What is going to be the collateral damage to our budget? Because it is going to grow the health care budget from now until next year exponentially by terminating one contract and hiring another company midstream.”
England and other members of the Contract Review Committee raised questions about the YesCare contract when it came up for review in February 2023.
During the meeting, Mary Coleman-Roberts, then the acting general counsel for ADOC, said the company did not submit the lowest bid but that it was within 10% the lowest bid and offered competitive salaries to allow Corrections to reach the federally-mandated staffing requirements.
England also raised questions at the 2023 meeting about the presence of Bill Lunsford, a private attorney who has made millions of dollars representing DOC in lawsuits, on an advisory board for YesCare during bidding. Coleman-Roberts said at the time that Lunsford was not involved in the first round of bidding on the contract and had left the company by the time a second round began.
Lawmakers said they warned Corrections about the company’s financial situation even prior to the Committee learning of the $1 billion contract that was awarded at the February 2023 meeting.
“Rep. England was talking about this before the contract was signed with YesCare,” said Rep. Matt Simpson, R-Daphne, in an interview following the meeting on Wednesday. “He was bringing up this specific issue; he was bringing up the history of this company. We had these conversations years ago. Before the contract was signed, he was bringing this up.”
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Author: Ralph Chapoco