The Corrections Department could do a better job of minimizing health care costs for inmates, according to the State Auditor’s Office.
The Department of Corrections (DOC) contracts with Correct Care Solutions (CCS) of Nashville, Tenn., for inmate health services.
From Feb. 1, 2010, through Jan. 31, 2013, the state paid CCS $53.3 million to provide health care services to roughly 1,500 inmates incarcerated at in-state facilities — $4.2 million over what the state had budgeted.
The audit, released Monday, shows that the structure of that contract, coupled with gaps in the department’s oversight, left Correct Care Solutions with little incentive to keep costs to a minimum.
“Since it’s a cost-plus-management fee contract, the state bears the financial risk and the contractor lacks incentive to minimize costs,” State Auditor Doug Hoffer explained in a statement to the press.
The audit also concludes that the department hasn’t kept close enough tabs on CCS to ensure the company is billing properly when inmates have insurance, and to ensure it procures medication for soon-to-be-released inmates in the cheapest way possible.
The DOC’s health services director, Dr. Dee Burroughs Biron, said she appreciated the recommendations from the auditor’s office but the department has already been working to address the major red flags — “The audit is a retrospective view of what we’ve been doing,” she said.
The DOC’s three-year contract with CCS was extended to January 2015. Burroughs Biron said the department is in the midst of a two-year planning effort to shed the for-profit contract and instead adopt a community-based model that would rely on local agencies and federally qualified health centers to provide services.
“We would like to take a bold leap in Vermont and do something that is more Vermont-centric,” Burroughs Biron said.
The initiative was prompted by an earlier review, completed in 2012 by the consulting firm Public Consulting Group, as part of Act 41, or the War on Recidivism Act.
Hoffer’s audit uncovered one instance in which CCS failed to bill Medicaid for an inmate’s medical procedure, which cost $84,000.
Burroughs Biron said that the DOC noticed this soon after, and corrected the situation.
“We have in place a reconciliation procedure so you can catch those types of things. That did get billed to Medicaid because it got picked up very soon after. There was no loss to the state. We had already caught that,” she said.
The audit also turned up an instance in which the prescriptions for two inmates being released from the Chittenden Regional facility cost the DOC $1,100 more than it could have because CCS returned the medication it had already ordered from a large supplier and instead ordered prescriptions from local pharmacies — a more expensive option.
Burroughs Biron said the department’s priority is making sure inmates, many of whom deal with serious health problems, don’t experience a lapse in their medication.
“Maybe they have diabetes or hypertension. I don’t think it’s fair to have them leave with less than adequate medication,” she said. “Can we do better with getting those medications from a major pharmacy provider? We used to do that and we are going back to that, but the important bottom line is that people are getting their medication. I think I try to balance the cost with the care that is provided.”
Some of the oversight problems uncovered by Hoffer’s office coincide with a period of understaffing in the Department of Corrections, a situation that has since been remedied.
The audit notes that CCS failed to meet certain contractual requirements between August 2010 and December 2011, but it took the DOC until 2013 to actually penalize the company. By allowing so much time to elapse, the report concludes, “DOC lost the opportunity to offer a monetary incentive for CCS to correct its deficiencies in a timely manner.”
Burroughs Biron, who started as health services director in 2007, left the department in October 2010, which exacerbated the understaffing of its health team. Burroughs Biron returned in 2012, and a new contract monitor was hired in October.
The audit concludes that DOC’s “cost monitoring,” which it described as “not robust” up until then, had improved by late 2012. “DOC has made substantial improvements to both their cost and performance monitoring processes in the past year. However, more needs to be done to help ensure that the State is not paying excessive amounts for the services that it is purchasing.”
Burroughs Biron said the DOC is still constrained by limited staff — it only employs six people to oversee the entire health services system for inmates, who are spread out among eight different facilities throughout the state.
“All our providers are Vermonters, and they are working their rear ends off to do a very good job to serve the corrections population,” she said. “I would just emphasize the hard work that goes into this, providing health services day after day. It is a tremendous outpouring of energy and effort and, yes, the money — it doesn’t come for free.”