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Posted: Tuesday, Apr. 24, 2012

Hospitals get their way on inmate care

By Joseph Neff
Published in: Prognosis: Profits

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For years, the state Department of Correction has been trying to rein in skyrocketing costs of hospital care for inmates – up from $17.5 million in 1999 to $63.8 million in 2011.

But prison officials had a problem: Unlike insurance companies that represent regular patients and can negotiate hospital charges downward, they had no bargaining power. They generally paid whatever the hospital demanded.

Paying the list price is expensive since North Carolina hospitals generally set their charges at three times their costs; an inmate hospital stay that cost the hospital $10,000, for example, could be billed at $30,000.

Paying the list price means a 200 percent profit for the hospital at the expense of taxpayers.

So the Department of Correction turned to the General Assembly. Last year, prison officials thought they had finally fixed the problem. The new state budget mandated that prisons now pay the lesser of 70 percent of charges, or twice the rate that Medicaid will pay. Either price guarantees a profit for the hospital and a significant savings for taxpayers.

Under federal law, all hospitals must see anyone who shows up in the emergency room. The state budget law would have required hospitals to admit inmates, not just treat emergencies.

But many hospitals don’t like treating inmates.

“Inmates?” asked Kenneth Morris, chief financial officer at Duke University Health System. “We don’t want their business. It’s disruptive.”

The day after the budget passed, a state lawmaker acting on behalf of WakeMed slipped a bland sentence into a “technical corrections” bill; the requirement that hospitals treat inmates for non-emergencies was quietly deleted. Those hospitals include big institutions such as Carolinas Medical Center, WakeMed in Raleigh, and Duke.

Hugh Tilson, lead lobbyist for the N.C. Hospital Association, said he urged hospital officials to call lawmakers if they didn’t want to be forced to admit murderers, rapists and child molesters.

Sen. Richard Stevens, a Cary Republican, submitted the amendment. Stevens had heard from officials at WakeMed, who complained that they have provided a disproportionate share of inmate care.

Stevens also said legislative staff were troubled by a provision in the law that could revoke a hospital’s license if it didn’t treat inmates.

In the fall, the Department of Correction opened a $155 million hospital at Central Prison in Raleigh that will diminish, but not eliminate, the need for inmates to be seen in outside hospitals. Frank Rogers has been in charge of the prison’s push on inmate health care at the legislature, and he has seen the hospitals’ clout.

“I was disappointed,” Rogers said of the last-minute change. “But I was not surprised.”

Neff: 919-829-4516

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