WASHINGTON — Correctional health care provider YesCare has filed for Chapter 11 bankruptcy for the second time in just three years following a $307 million jury verdict tied to medical neglect, according to Worth Rises, a national nonprofit organization focused on ending prison industry exploitation.
The filing is the latest in a wave of bankruptcies involving major carceral health care contractors, including Wellpath, Armor Correctional Health and YesCare’s predecessor, Corizon Health.
The Wall Street Journal reported that “The payment default stripped YesCare and its backers of the litigation shield against the creditors and hundreds of personal-injury claimants alleging medical malpractice, professional negligence and other harms.”
The Wall Street Journal also reported, “YesCare also lost one of its biggest government contracts when the Alabama Department of Corrections terminated its roughly $1 billion healthcare services contract with the provider for failing to fulfill its contractual duties.”
Executive Director of Worth Rises Bianca Tylek stated that “Correctional healthcare provider YesCare was born out of the bankruptcy of its predecessor Corizon, and not yet three years old, YesCare is already filing for bankruptcy.”
“Facing a $307 million jury verdict in Michigan for medical neglect, YesCare seeks to absolve itself of responsibility for the devastating harm it’s caused,” Tylek continued.
Tylek added that “The corporation’s repeated bankruptcies are the inevitable conclusion of a business model that prioritizes profit over human life.”
“For decades, the correctional healthcare industry has raked in billions while denying incarcerated people care, resulting in constitutional violations, catastrophic health outcomes, including preventable deaths, and mountains of legal settlements,” Tylek said.
Tylek highlighted that “The providers in this industry depend on bankruptcy courts to then clear their balance sheets and get back to business as usual, with no intention to change its provision of care.”
“They treat their patients as liabilities to be managed rather than human lives to be protected — and when their profit margins depend on denying life-saving care, lawsuits are a certainty, not a risk,” Tylek added.
Tylek said, “The bottom line is that there is no corporate restructuring or financial engineering that can fix the problem in the correctional healthcare industry because this is not a balance sheet problem; this is a moral problem.”
A wave of bankruptcies has swept through the correctional health care industry in recent years, with major contractors collapsing under the weight of medical malpractice litigation and mounting liabilities.
In 2023, Corizon Health, the predecessor to YesCare, filed for bankruptcy after a divisional merger attempted to isolate litigation liabilities from revenue-generating contracts, according to Worth Rises. The strategy later faced significant legal challenges and ultimately failed.
The organization wrote that “At the time, Corizon had roughly $1 billion in legal settlements, primarily from medical malpractice, and eventually agreed to a $75 million settlement.” Worth Rises added that YesCare recently failed to meet payments owed to affected families.
Wellpath, the nation’s largest private provider of carceral health care, filed for Chapter 11 bankruptcy in late 2024, “citing an unmanageable volume of medical malpractice litigation and the inability to secure affordable third-party insurance.”
Armor Correctional Health moved to liquidate its assets in 2024 following a 2023 Chapter 11 filing. The firm’s collapse was precipitated by a “litigation crisis” involving hundreds of lawsuits and a rare criminal conviction for falsifying medical records in Wisconsin.
“Across the industry, corporations are abusing bankruptcy courts to escape accountability for injuries and deaths,” said Tylek.
Tylek concluded by asking, “As juries continue to issue major settlements, will bankruptcy courts continue to erase their will and let the industry get away with murder?”
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