Prison Contractor Demands Held Payments from State
A Florida-based medical contractor on Tuesday filed a motion in federal court accusing California's prison medical receiver Robert Sillen of refusing to pay the company $2.6 million it is owed, the Sacramento Bee reports.
Medical Development International in September 2006 was hired by the state to provide scheduling, transportation and billing services for California inmates seeking medical care.
In its motion filed with U.S. District Court Judge Thelton Henderson, MDI says it cleared a backlog of more than 500 specialty appointments for inmates at two state prisons in less than three months. The company also says it:
- Reduced inpatient stays at hospitals;
- Increased specialty services at the prisons; and
- Saved the state $3 million in claims payments.
MDI also charged that in addition to the $2.6 million in back payments, the company is accruing expenses at a rate of $700,000 per month (Furillo, Sacramento Bee, 4/5).
Theodore Willich, vice president of MDI, says Sillen in January suspended payments because the company lacked a medical license, making the contract illegal.
However, after a lawyer for MDI informed Sillen that the company would withdraw from its contract if payment were withheld, Sillen threatened to "make sure MDI never worked in California again" if it quit, according to Willich.
A spokesperson for Sillen's office declined to comment on the motion because the office had not received a copy (Reiterman, Los Angeles Times, 4/5). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.