The medical transportation service, which serves several counties, including Marion, Washington, Taylor, Adair and Green, is owed a quarter of a million dollars in Medicaid claims.

"We'll never see it," Tony Royalty, owner of Life First, said.

Royalty has scaled back services in Marion and Nelson counties and has laid off at least 20 people in the last month and expects to lay off 20 more in the near future. He has also halted emergency runs.

The problem, Royalty said, lies with the brokerage system.

A few years ago, The Kentucky Transportation Cabinet began contracting with brokerages, which act as dispatchers for medical transportation services, such as Life First.

The state pays the services through the brokerages, but when brokerages go broke, such as Transportation Management Inc. in Elizabethtown, the providers are left with no way of getting paid.

"It's killing us," Royalty said. "We would have been better off to have gotten out of the business (when the brokerage system started)."

Lt. Gov. Steve Henry met with health care and transportation providers in Elizabethtown last month and pledged to seek legislative action to ensure that Medicaid claims are paid.

Henry's proposed legislation would require brokers to maintain surety bonds which would protect transportation providers in case of broker insolvency.

"These transportation companies provided services in good faith and now their employees are at risk of losing their jobs," Henry said. "These providers rely on payments to operate their business."

"It is unacceptable that our most vulnerable citizens, our seniors, disabled and poor women and children, are in danger of not being transported to their doctors or clinics," Henry continued.

"Transportation is essential for Medicaid recipients and insures their access to healthcare."

Royalty, however, doesn't think Henry's action will help the situation.

"[Henry is] under investigation himself so how much clout does he have?" Royalty said.

Some transportation services have stopped making Medicaid runs or have even sold their business because of the missed payments, according to Royalty.

The non-payment of Medicaid claims will likely have little effect on city/county ambulance services because taxpayers will keep them up and running.

The private services, such as his, are liable to fold, Royalty said.