State Comptroller: Inmate Hospital Fees Need Better Controls

ALBANY, NY – Inmate hospital costs were not billed accurately 90 percent of the time by Oswego and seven other counties according to the state comptroller’s audit released Sunday (Oct. 5) and counties are not billing for federal money resulting in a loss of $46,352 in reimbursements.

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NYS Comptroller Thomas DiNapoli’s report, which covers inpatient claims paid in 2012, states, ” In seven (Chautauqua, Clinton, Erie, Jefferson, Orleans, Oswego and Rensselaer) of the eight counties audited, county officials did not pay the appropriate Medicaid DRG rates on 90 percent of the inpatient hospital claims paid in 2012.”

The eighth, Westchester County, uses a contractor to maintain financial responsibility for all inmate health care services, including ambulatory, inpatient and outpatient care, both on- and off-site which gives the county indemnification from all legal costs and lawsuits filed by inmates relating to health care.  According to the report, because the contractor assumes some risk and is simply not acting as an administrator obtaining the
money from Westchester County to pay the hospital, the DRG rates do not apply.

The comptroller said his staff reviewed 181 inpatient hospital claims and found that 164 claims were not billed accurately, resulting in over payments of $4,169 and underpayments of $198,034.

“In addition, only four (Chautauqua, Clinton, Erie and Orleans) of the seven counties audited took full advantage of the opportunity to enhance revenues by filing claims for retroactive federal financial participation reimbursement for the costs of certain inpatient medical services provided to correctional facility inmates. The other three counties (Jefferson, Oswego and Rensselaer) could have submitted claims seeking potential reimbursement of up to $46,352.”

DRG is a rate of payment developed by the New York State Department of Health based on the average cost of treating a patient within the same age range, diagnosed with the same or similar condition and needing the same type of treatment.

DiNapoli further stated the audit has been discussed with county officials, “and we considered their comments in preparing this report.”

Although tasked with controlling costs, county jail administrators must provide inmates with satisfactory health care services. “Often, inmates are part of a socioeconomically depressed population and are more likely to have poor health histories due to limited access to health care,” the report states.

According to county officials, jail inmates suffer from a number of maladies – dental issues, mental illness, substance abuse, human immunodefi ciency virus, sexually transmitted diseases and tuberculosis – at rates higher than the rest of the general population, which affects the cost of care.

“Furthermore, upon incarceration, inmates usually lose their eligibility for private and public health insurance benefits, forcing the county to take on the full responsibility of paying for inmates’ health care,” DiNapoli noted.

Inmate hospital costs for 2012 for Oswego County was $40,295 inpatient and $273,169 outpatient for a total of $313,464.

Erie County topped the list with a total cost of $1,642,554; Orleans and Jefferson each posted about a third less than Oswego County with total costs of $214,134 and $211,794 respectively.

The report advises that, of the inpatient claims for Oswego County, there was a potential federal financial program reimbursement of $20,147 – or almost half of the expenditure.

“Incarceration in a county correctional facility, as a public institution, renders inmates ineligible for Medicaid services. However, New York State Social Services Law and the Federal Social Security Act authorize each county DSS to file claims for retroactive federal financial program reimbursement for the costs of certain inpatient medical services provided to correctional facility inmates.

“Subject to federal approval and availability of FFP, county DSS may claim reimbursement for inpatient medical services provided to inmates who are:

  • Involuntarily confined or are residing in any correctional facility owned or operated by the New York City Department of Corrections;
  • Involuntarily confined or residing in any correctional facility owned or operated by a county or other municipality within a social services district; or
  • Confined or residing in a correctional facility operated under a contract with a county or a municipality other than a county.

The comptrolled advised that the federal government will only reimburse costs for those inmates who were in receipt of, or eligible for, Medicaid at the time of their incarceration, when an application had been previously submitted and denied for an otherwise Medicaid-eligible applicant due to inmate status, or when inpatient services were provided to an otherwise Medicaid-eligible inmate no earlier than the three-month retroactive period prior to application.

The comptroller called for stronger procedures on the county level for auditing inmates’ hospital claims by providing employees with Medicaid billing training; assure the rates used are the most current; and request that hospitals the Medicaid DRG code on inpatient claims to assist county officials in audit procedures.

DiNapoli also recommended that county officials “develop a process to submit eligible inmates’ inpatient hospital claims for federal financial program reimbursement.”

Meanwhile, his audit lauded Oswego and Chautauqua counties for “negotiated outpatient hospital service rate discounts with local hospitals and providers, ranging from 5 percent to 50 percent.”

The comptroller’s complete report can be found here: