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Audit: State prisons overpay for inmate medical care

Posted February 11, 2010

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— The state Department of Correction needs better policies and procedures to control skyrocketing inmate medical costs, according to an audit released Thursday.

Medical costs for inmates in state prisons amounted to $231 million last year, with more than $90 million going to outside providers.

State Auditor Beth Wood Wood: Action needed to cut wasteful spending

A review of the DOC's fiscal controls by the State Auditor's Office found that the department allows hospitals and other medical providers to dictate the terms of contracts for inmate medical care, leading to a range of pricing. Also, not enough guidance is provided to claims examiners handling payments to providers that don't contract with the state for inmate medical care, according to the audit.

Payments were made for procedures that wouldn't be considered allowable charges under the State Health Plan or Medicaid, auditors found. In some instances, hospitals charged the state rates called for under the contracts when the actual cost of care was far lower.

On average, providers billed the DOC at rates 467 percent of reimbursement rates under Medicare or Medicaid, according to the audit. For example, the department paid WakeMed $482,000 for a trauma case that Medicare would have paid $120,000 to treat.

"It just appears to be waste," State Auditor Beth Wood said Thursday.

The findings upset taxpayers like 69-year-old Tom Slaughter.

"My gut reaction? It made me angry," said Slaughter, who has emphysema and struggles to find doctors to accept his insurance. "These convicted prisoners are getting better health treatment than I'm getting as a senior citizen."

North Carolina Hospitals Association spokesman Don Dalton points out prisoners are not typical patients.

"We're talking about a segment of the population that's more dangerous (and), therefore, more costly to manage, and they're often sicker and more costly to treat," Dalton said.

He also disagreed with the audit using Medicare or Medicaid reimbursements as a benchmark.

"Hospitals are underpaid well below cost in both Medicare and Medicaid," he said.

Auditors recommended that the DOC should look to limit covered services and rates to those allowed under Medicare or Medicaid

DOC officials responded to the audit by noting that they crafted a bill in the General Assembly last year that would have required providers to charge rates equal to those charged under the State Health Plan. Lawmakers watered the bill down, however, and the provisions that were eventually signed into law don't adequately contain inmate medical costs, officials said.

"There are smarter ways to do this. Other states are negotiating with their providers in a much fairer way," said Adam Searing, director of the Health Access Coalition, which is part of the NC Justice Center, a left-leaning think tank.

Wood said that she hopes her staff's findings will compel lawmakers to look at the issue again in the upcoming legislative session.

"As a taxpayer and not just the state auditor, it's my expectation that the people who are responsible, the people who can make this go away, the people who can get these costs in line will step up to the plate this session and make that happen," Wood said.

"I think it would be irresponsible for us to allow this to continue because we're looking at tens of millions, if not hundreds of millions, of dollars," she said.

While waiting for legislative help, DOC officials said they plan to hire a medical expert to help negotiate hospital contracts and better monitor expenses. They also said a hospital under construction at Central Prison in Raleigh could cut costs by 30 percent.

51 Comments

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  • TomLynda Feb 12, 2010

    WXYZ:

    You are correct. I think most of the comments are directed towards the Government. As you said, the prisoners do not set policy, etc., and in the soceity we live in, we have to provide medical care for them.

    But as others have pointed out, when the state is being charge up to 800% over what is paid on Medicare, something is wrong. It is not a DOC problem, for they have to pay what is billed, according to the law the lawmakers decide. That is where the problem lies. The out of control, tax and spend, and then tax and spend some more government. They were asked to correct the problem before and didn't do it. Wonder if they will now???

    For some reason I kinda doubt it. It will be the same old, same old. Them listen to we citizens? I'm not holding my breath for that to happen.

    The only real power we have is to vote them all out and start over with a clean, honest slate of lawmakers, and officials.

  • WXYZ Feb 12, 2010

    The prisoners DO NOT set policy, make decisions or have any control over themselves. Where should the disgust and indignation be directed? Answer: At the people who who ignored the cronism, corruption, nepotism, bid rigging, kick backs, pay-offs, elitism, deliberate government "money laundering"; and who kept re-electing the same bureaurcrats year time after time; and who ignored the run-away rise in the state's annual budget. Now, go after the bureaucrats who are still doing "business as usual" with the taxpayer money. Start with Easley, then Perdue and then the legislature and then the bureaucrats. That is where your anger and demands for better policy and performance should be directed. Government will always spend ALL of the money it takes. The solution is to force the government to REDUCE the annual budget and reduce taxes and government fees until all the jobs in the private sector have been restored.

  • WXYZ Feb 12, 2010

    So, overpaying contractors was quick and easy way to GET RID OF THE SURPLUS MONEY during the Easley+Perdue Administration. And, then, no one was "auditing" or asking questions. The stupid voters kept re-electing the Socialist-Rubber Stamping-Yellow Dog Democrat Legislature gave the Easley-Perdue Administration anything they wanted and looked the other way-most of the time- when the cronies (e.g. Easley + Black or Easley + Phipps or Easly + Nifong) "got busy" and when nepotism (Mary Easley) occurred...because they were doing it too. So, don't blame the prisoners or try to punish them for something they had no control over--blame and punish the crooked Democrat bureaucrats--many of whom are STILL in office or STILL have their jobs. Believe me, medical care for prisoners in NC is mostly little better than that available in a 3rd world country. And, it is not "free"--if an inmate has any money, it will be taken in order to pay for medical care.

  • WXYZ Feb 12, 2010

    Why this? During the Easley + Perdue + Socialist Democrat Legislature 8 years in office, the state's annual budget was raised from about $10.5 billion to about $21.5 billion. 7 of 8 of those years the state had a budget SURPLUS--nearly $2 billion in FY 2005-6. What did the above mentioned bureaucrats do? The RAISED the budget, in order to SPEND the SURPLUS; and they RAISED taxes and fees EVERY year to boot! How did they SPEND the money? Hiring MORE and MORE state government employees and paying them more and more to do less and less. In addition to building new roads, widening existing roads (can you say "bid rigging"), building new and expanding old prisons, buying equipment that was never used (e.g. cars, trucks, computers, furniture), renting more office space than they need, taking bribes and kick backs, going on "business trips" at taxpayer expense. Now the state government is NC biggest employer. This has crippled the private sector's ablity to sustain itself and grow.

  • delilahk2000 Feb 11, 2010

    THEY SHOULD BE TURNED AWAY JUST LIKE WE WOULD BE IF WE COULD NOT PAY. BUT, WE TAX PAYERS ARE JUST LOADED WITH MONEY AND WE DO NOT GET HALF THE CARE THEY DO. THIS IS ANOTHER SHAM AT THE TAXPAYERS COST. OUR GOV. IS LOUSY WHEN IT COMES TO OUR MONEY AND HOW THEY SO FREELY GIVE IT AWAY.

  • whatelseisnew Feb 11, 2010

    ""Hospitals are underpaid well below cost in both Medicare and Medicaid," he said."

    And that right there is one of the big reasons private insurance is being driven through the roof. Get rid of Medicare and Medicaid and costs will come down.

  • ladyblue Feb 11, 2010

    Only in America do the prisoner get better medical care than the average working citizens of this country. No wonder so many get into trouble to go to jail.

    This is disgusting IMO---But the current administration wants to cut the medical benefits by 500 billion for our seniors who worked and paid into the system all their lives until retirement. got to love/hate it all.

  • archmaker Feb 11, 2010

    if i were a doctor, i wouldn't charge the same for a murderer and a little old lady on medicare.

    that being said, the best frre, preventative, comprehensive, healthcare coverage given by our government right now is at gitmo

  • Panther Feb 11, 2010

    When a prisoner request to go see the Doctor, just give them a cyanide pill and tell them “Ok, take this for the pain and wait for a few minutes”
    I bet that will reduce the prison population and request to see the doctor!!

  • whatusay Feb 11, 2010

    If an inmate has a private health insurance plan (say his/her spouse has family coverage) and the inmate needs medical care who pays, the tax payers, or the private insurance company???

    I don't believe the state even considers checking to see if the inmate has private coverage.

    If the state would do an audit on past medical claims they might be able to bill the insurance companies for those costs.
    Just a thought, not sure the state even cares.

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