Prison Health Care Firm Collapses, Owed $8 MIllion for Treatment


A Florida-based company that lent its CEO more than $5 million for an Angus cattle ranch and a biography and screenplay about himself has gone into receivership, leaving Duke University Health System and area doctors' offices owed more than $8 million for treating patients from Butner federal prison, reports the Raleigh News & Observer. MDI Holdings Inc., of Ponte Vedra Beach, Fl., had a contract to administer some of the health care for the 5,000 inmates at the prison, subcontracting the work to Duke and local physicians.

The federal government let the Butner contract expire earlier this year after problems surfaced with MDI's finances. Last month, Wells Fargo won a $30 million lawsuit that forced the company into receivership. This means that apparently Wells Fargo, which had lent MDI $37.5 million over several years, will get any money left at MDI, said Conor Brockett of the North Carolina Medical Society. The group has told its members that they are not likely to recover a cent from MDI. It has begun investigating whether the Federal Bureau of Prisons has any obligation to pay the outstanding bills.

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