Woman sues Kentucky for contracting with now-bankrupt prison health care provider

The sister of a man who died in a Kentucky prison in 2021 has filed a second lawsuit — this time against the state justice cabinet and its officials for failing to enforce insurance contracts in its facilities.

In the lawsuit, filed Oct. 10 in Franklin Circuit Court, Britney Jones, 38, accuses Kentucky Attorney General Russell Coleman, Department of Corrections Commissioner Cookie Crews and other state employees of allowing Wellpath, the state’s embattled jail health care provider, to have insurance policies that could not pay out for settlements.

Jones’ brother, Chad Lake Raymond, died at Eastern Kentucky Correctional Complex from endocarditis, an infection of the heart’s valves, after his condition worsened over a period of 11 days. Her previous lawsuit, filed in 2022, accuses Wellpath of medical negligence and wrongful death.

But just as that lawsuit was about to be settled, according to court documents, it came to an abrupt halt when Wellpath declared bankruptcy.

The bankruptcy filing not only interrupted Jones’ suit, but left hundreds of others who claimed they were wronged or neglected in prison by Wellpath in the lurch. The Tennessee-based health care company, which insures prisons across the U.S. against health-related lawsuits, faced 571 pending lawsuits nationwide as of Oct. 21, including 22 in Kentucky.

Some of those suits accuse the company of fraud, prompting questions about whether Wellpath is even capable of paying out lawsuits.

The sheriff’s office in Cobb County, Ga., near Atlanta, claims in a lawsuit filed Feb. 18 that Wellpath lied about the type of coverage they offered. When county corrections officials were sued for medical negligence, Wellpath failed to pay up, the suit alleges.

Cobb County accused the company of obtaining an insurance contract through “false pretenses, a false representation, or actual fraud,” and the lawsuit is ongoing.

In Kentucky, in addition to providing medical coverage for inmates, Wellpath was on the hook if a prison had to pay out a settlement related to medical negligence. Wellpath was required to have insurance of its own to cover those payouts in case it filed for bankruptcy.

In Kentucky, Wellpath remains the health care provider for the commonwealth’s 14 prisons. The department of corrections has contracted with the company, formerly Correct Care Solutions, since 2014. The state paid $62 million for the 2024 fiscal year contract.

Greg Belzley, Jones’ lawyer, claims the state did not enforce Wellpath’s contractual insurance requirement — by either not “doing its homework” or “not caring” once the agency discovered the company lacked the coverage for payouts.

“It is an example of extraordinary incompetence among the state officials responsible, or their utter disregard of the consequences of the Kentucky inmates and their families who might be injured due to Wellpath’s neglect of, or deliberate indifference to, their medical needs,” said Belzley.

When Wellpath signed a contract to provide health care for prison inmates in Kentucky, it assured the state it had third-party insurance to pay out claims of negligence and wrongful death. But James Seitz, the company’s director of insurance, wrote in bankruptcy filings that Wellpath’s insurance was merely a “fronting policy” and did not appear to provide actual coverage against lawsuits.

Seitz wrote the fronting policies were submitted solely to gain contracts and imposed “no risk or liability on any third party.”

Fronting policies — which don’t require proof that a company can pay out settlements but instead assure the policyholder the company will be able to pay out if it comes to that — meet requirements set by state lawmakers that prisons have coverage from a licensed insurer, Seitz wrote.

Morgan Hall, spokesperson for the Kentucky Justice and Public Safety Cabinet, said the state’s contract with Wellpath requires the company to maintain general and professional liability insurance within specified limits.

“The department expects Wellpath to remain in full compliance with those contractual requirements,” Hall wrote in an emailed statement. “Due to pending litigation, the department cannot provide additional comments.”

Hall added: “The Kentucky Department of Corrections is committed to ensuring the safety and well-being of all individuals in state custody and has contracted with Wellpath, an independent medical provider, to afford those in state custody access to medical care and treatment. The department extends their deepest sympathies to the family of Chad Raymond, who we know is grieving the loss of their loved one.”

Kentucky Attorney General Russell Coleman did not respond to a request for comment.

Jones’ original lawsuit is scheduled for mediation.

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