Health system left holding bag on prisoner care

Duke University Health System will likely eat the $8.3 million it is owed now that a Florida firm that administered healthcare services for prisoners has been forced into bankruptcy, reported the Raleigh News & Observer.

The firm, MDI Holdings Inc., was forced into receivership by Wells Fargo bank, which had lent MDI $37.5 million over the past several years. The bank is first in line to receive any money that is remaining in MDI's accounts, the News & Observer reported. Since the North Carolina health system is an unsecured creditor, it's low on the list of those to be paid.

In addition to the money owed Duke University Health, an unknown number of physicians in the region also have been left with unpaid bills, according to the article.

MDI CEO Richard Willich alarmed Wells Fargo by using company funds to loan himself money to run a private farm and to a company that held the rights for a biography and screenplay about his life.

The financial vagaries of third parties often impact hospitals. For example, Jefferson County, Ala., where the city of Birmingham is located, filed for bankruptcy protection in 2011. As a result, Cooper Green Mercy Hospital is likely to close soon because the county can no longer subsidize its operations, Reuters reported.

For more information:
- here's the News & Observer article
- read the Reuters article

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