HD10 - Review of Inmate Medical Care and DOC Management of Health Services

  • Published: 1994
  • Author: Joint Legislative Audit and Review Commission
  • Enabling Authority: Appropriation Act - Item 15. (Regular Session, 1992)

Executive Summary:
Nationally, inmate health care has been the subject of much debate and a significant amount of court activity. The United States Supreme Court ruled in the late 1970s that inmates have a constitutional right to health care. However, questions remain concerning the appropriate level and quality of inmate health care. Consequently, correctional administrators and health care staff must make these determinations within certain legal parameters.

In fiscal year (FY) 1993, the Virginia Department of Corrections (DOC) spent approximately$36.9 million to provide health care to an average daily population of 17,011 inmates. Expenditures for inmate medical care made up the majority of expenditures for inmate health care services. The remaining expenditures were for inmate dental and mental health services.

Approximately 200 full-time State employees and additional contract personnel provide medical care services at 17 major institutions and 20 field units. In addition, the department employs four professional staff, who are assigned to the Office of Health Services (OHS) in the central office. The department has a decentralized approach to inmate health care that results in budgetary and programmatic decisions being made at the institutional and regional levels. Staff within OHS act primarily as advisors to correctional health care staff working in the facilities.

The 1992 Appropriation Act directs the Joint Legislative Audit and Review Commission (JLARC) to examine the increasing costs of health care in corrections and to determine the appropriate level for that care. This report, the third in a series of reports on inmate health care, focuses on the delivery of inmate medical care and the Department of Corrections' management of inmate health care. Previous reports addressed inmate dental care and inmate mental health care.

Although inmate health care represents a significant and growing component of the Department of Corrections' budget, the department does not effectively manage these services or their costs. Consequently, in three of the last five fiscal years, department expenditures for inmate health care have exceeded appropriations. Cost overruns and contractor noncompliance have plagued the department's experiment with privatization of inmate health care delivery at Greensville Correctional Center. The department needs to clearly delineate responsibility at the central office level for health care contract oversight, the analysis of inmate health care costs, and the development of needed management systems. Further, the department needs to improve inmate access to medical care by correcting deficiencies in medical care staffing, documentation of medical records, and facilities for female and handicapped inmates.

Problems with the Provision of Medical Care

Overall, access to care appears to be good. However, generalizations about inmate access to medical care must be caveated, because problems with documentation of care and sick call records made it difficult to assess the delivery of primary medical care at some of the major institutions. Medical care, particularly primary care available through sick call at DOC facilities, was difficult to assess due to:

• inconsistent record-keeping at major institutions
• incomplete, disorganized, and illegible medical record documentation
• poor documentation of off-site care
• inconsistent documentation of inmate medical transfer information.

Medical record and sick call documentation are important components for assessing inmate access to medical care. Medical records document the care provided to inmates, assure continuity of care by providing treatment information to multiple medical care providers, and provide a basis for planning and assessing the quality of medical care provided. Incomplete and inaccurate documentation of care may adversely affect the State in legal actions.

Problems with medical record documentation were noted in quality assurance reviews conducted by the Office of Health Services and in Board of Corrections standards compliance reviews conducted by DOC staff. To address these problems, the following recommendation is made:

• The Department of Corrections should ensure that institution and field unit staff improve documentation of inmate medical care. Also, the Office of Health Services should: (1) follow-up on documentation problems noted in quality assurance reviews, (2) complete the medical records manual, and (3) design and conduct training on documentation requirements for medical care staff.

DOC Needs to Improve Methods for Medical Staff Recruitment and Retention

In general, the department employs dedicated medical care professionals who are trying to deliver quality care in the correctional environment. However, medical staff recruitment and retention problems were evident at DOC major institutions and appear to negatively affect inmate access to primary medical care. Recruitment efforts for nurses and physicians are hampered by inadequate recruitment efforts, hiring delays, the lack of continuing medical education, and inadequate compensation. The department has failed to implement existing State retention mechanisms, such as the use of shift differentials or flexible scheduling.

In addition, physician recruitment and retention could be improved by establishing better linkages to teaching hospitals, offering continuing medical education opportunities, and offering more competitive compensation. To address physician coverage problems, DOC should supplement physician care with physician extenders, such as certified nurse practitioners or licensed physicians' assistants. These positions typically supplement physician primary care in community settings. Physician extenders could enhance inmate access to primary care and provide cost-effective care. However, DOC currently does not employ any licensed physician extenders in the correctional system.

The following recommendations are made to address these issues:

• The Department of Corrections should Change its nurse recruitment and retention policies and procedures to decrease position vacancy rates and use of temporary agency nurses to fill these positions. The department should work with the Department of Personnel and Training to implement a full range of methods for improving nurse recruitment and retention.

• The department should assess physician coverage in major institutions and consider alternatives for providing physician coverage, such as the use of physician extenders or enhanced physician recruitment efforts. The department should work with the Department of Personnel and Training to explore alternatives to improve physician recruitment.

Medical Services for Females and Handicapped Inmates Need Improvement

Potential access to care problems affect female and handicapped inmates. The Virginia Correctional Center for Women (VCCW) has a medical facility that has inadequate clinic space, medical beds, equipment, and staffing. Currently, most inmates needing specialty care must be referred offsite for medical services. This has resulted in higher medical care costs, longer waiting periods, and increased use of overtime for security personnel. Further, the inadequate facilities negatively affect the recruitment and retention of qualified medical staff.

Deep Meadow Correctional Center is the system's designated handicapped facility, containing one 50-bed dormitory for handicapped inmates. However, Deep Meadow has no infirmary medical beds available and the handicapped dormitory is separated from the medical building by a security gate. Some handicapped inmates may have medical conditions which require close nursing and monitoring, but current facility and staffing limitations do not facilitate this.

To address medical services for female and handicapped inmates, the following recommendations are made:

• The Department of Corrections should immediately begin to address problems in delivering on-site medical services at the medical infirmary at VCCW.

• The Department of Corrections should Track the number and acuity levels of handicapped inmates, develop a plan to address the full range of housing and medical care needs of handicapped inmates, and evaluate the current staffing patterns at Deep Meadow Correctional Center to determine if current levels are adequate to address the medical care needs of inmates housed at the facility.

Current Procedures Guiding Inmate Medical Transfers Are Inadequate

A number of problems affecting inmate medical transfers from one correctional facility to another were noted. Inmate medical transfers lack adequate physician involvement, notification, and documentation. DOC staff have failed to use precautions in transporting inmates with suspected infectious diseases, and training of security staff in handling inmate medical transfers appears to be inadequate. These problems have resulted in situations in which the medical care of transferred inmates has been compromised and the State has been exposed to potential legal liability.

• The Department of Corrections should revise policies and procedures for inmate medical transfers to address problems with physician involvement, appropriate precautions in transporting inmates with active or suspected infectious diseases, conditions under which medical staff should accompany the transferred inmate, and training for medical staff and correctional officers on medical transfers.

The Department Does Not Manage Health Care Costs

Health care costs are a significant and growing component of DOC's budget. In FY 1993, the department spent $36.9 million on health care services, or nine percent of the department's total expenditures. Current spending on inmate health services represents an 84 percent increase over the past five years. In three of the past five fiscal years, the department's health care expenditures have exceeded appropriations. State budget problems coupled with projected growth in the inmate population in Virginia make it imperative that DOC ensure its health care expenditures are cost effective. This review, along with previous JLARC reports on dental and mental health care, indicates that DOC does not have adequate control of these expenditures.

Currently, DOC lacks data on health care expenditures, inmate morbidity, and inmate health needs. DOC does not separately track dental, mental health, and medical service costs, and the method of classifying health care expenditures is not uniform. In addition, the department's morbidity data have been inconsistently reported, and are seldom used. The department does not maintain data on the severity of inmate medical conditions. As a result, DOC cannot determine the major components of health care costs, assess whether the costs of services purchased were reasonable, and determine if services could be purchased more cost effectively.

DOC's health care budgeting is also problematic. Over the past two fiscal years, 14 of 17 major institutions had inmate health care expenditures that exceeded their appropriations. This indicates two problems. First, DOC does not support its health care budget requests with valid data on inmate health care needs and the costs of those needs. Second, on the institutional and regional levels, health care funding is appropriated on a per-inmate basis. No allowances are made for special inmate health needs or higher service levels that are required at some institutions. This leads to overruns at higher service institutions.

Five recommendations are made to address these problems with inmate health care data and budgeting. The department should:

• use the element options to distinguish dental, mental health, and medical expenditures when processing financial vouchers for the Commonwealth Accounting and Reporting System

• ensure institutional and regional office accounting personnel use a system-wide classification of health care expenditures

• routinely collect, summarize, and analyze morbidity data; implement a systematic method of tracking inmates with special health care needs; and use the data on inmate health care needs to justify department health care budget requests and adjust institutional and regional health care budgets.

DOC Has Several Opportunities to Achieve Medical Care Cost Savings

JLARC staff analyzed the department's inmate health care expenditures to estimate and categorize DOC's medical expenditures. This analysis revealed that in FY 1993, approximately 86 percent ($31.7 million) of the $36.9 million in health care expenditures was for medical services. Medical expenditures were then categorized by the type of service purchased, such as personnel, hospital, or physician services (see figure on page v of the report). Analysis of these expenditure categories revealed that DOC has several opportunities to achieve cost savings if the department implements basic cost management techniques. For FY 1993, more than $2.3 million in cost savings could have been realized had DOC effectively managed its medical expenditures.

Since FY 1988, the percentage of health care expenditures going to DOC personnel services declined from 49 percent to 30 percent in FY 1993. This fact combined with dramatic increases in temporary nursing expenditures indicates that DOC is using more contractual services to directly deliver inmate health care. The department's use of temporary nursing is not cost effective. Temporary nurses are typically licensed practical nurses that cost almost as much per hour as State-employed registered nurses, but have a lower level of training and a narrower scope of clinical practice. By examining three institutions with large expenditures for contracted temporary nursing services, JLARC staff estimated more than $1 million could be redirected to provide recruitment and retention incentives for State-employed nurses instead of relying on temporary nurses to staff these positions on a routine basis.

The department lacks cost effective negotiated payment rates for many services. DOC has negotiated payment rates with Medical College of Virginia (MCV) Hospitals for male inmate inpatient stays. However, DOC pays 100 percent of charges for female inpatient care and outpatient care at MCV for all inmates. DOC also lacks negotiated payment rates for many other medical providers, such as physician groups, specialty care physicians, and other hospitals the department uses for inpatient and outpatient services. JLARC staff estimate that if DOC had negotiated payment rates of 80 percent of charges for many services currently not covered by negotiated rates, the department could have saved almost $1.1 million in FY 1993.

DOC also lacks fundamental reimbursement policies and processes to dispute billed services that appear to be medically unnecessary. Currently, medical bills are paid without determining the accuracy or appropriateness of the services being billed. The department may be making excessive payments for medical services because no mechanisms exist to dispute inappropriate or unnecessary charges. The department should seek assistance in creating these policies from other State agencies involved in health care.

In conjunction with developing reimbursement policies, DOC could obtain additional cost savings by better utilizing its utilization review contractor. Information from hospital utilization reviews could be used to deny medically unnecessary services. In addition, DOC could expand the number of cost audits conducted to identify inappropriate payments made to hospitals for services, and increase the number of concurrent and second opinion reviews.

More than $200,000 could have been saved in FY 1993 if DOC had established reimbursement policies and increased its utilization review activities.

Several recommendations are made to take advantage of cost saving opportunities.

• The department should develop a plan to reduce its usage of temporary nursing.

• The Secretaries of Public Safety and Education should direct DOC and MCV to renegotiate payment arrangements for inmates receiving care at MCV Hospitals.

• The Secretary of Public Safety should establish a task force to assist the department in developing more cost effective mechanisms for purchasing medical care services as well as developing reimbursement policies.

• The department should implement a plan to conduct a full range of utilization review activities for medical services and establish agreements with hospitals notifying them of utilization review activities that could result in payment denials.

Privatization of Health Care at Greensville Has Not Been Adequately Managed

DOC officials have indicated that privatization of inmate health care delivery is a possible direction for the future. DOC is testing the feasibility of privatization with a pilot project at Greensville Correctional Center. However, the department has not adequately managed the private contract for delivery of inmate health care at Greensville. This has led to problems with inmate access to care, costs that have significantly exceeded projected amounts, and contractor noncompliance with contract provisions. The department needs to assign responsibility for managing the contract to a single official or organizational unit at the central office level.

The contractor at Greensville, Correctional Medical Systems (CMS), has not adequately documented provision of inmate health care at Greensville. The contractor's substandard documentation of inmate tuberculosis (TB) testing violated contract provisions and public health standards. Tuberculosis testing procedures used by the contractor have threatened the health of inmates and staff. Further, the contractor has not provided adequate physician coverage in some instances. This has limited inmate access to medical care and violated contract standards on physician coverage. Problems with physician coverage have also been noted in DOC reviews of health care at Greensville.

The contractor's quality improvement efforts are minimal. The contractor's clinical oversight committees were late in being organized, seldom meet, and have sparse documentation. The contractor has not lived up to its contractual obligation to implement quality improvement activities and has not fulfilled its promise to achieve accreditation by a national organization.

In addition, DOC has not adequately fulfilled its support role to ensure inmate access to care at Greensville. For example, X-ray equipment at Greensville did not function fully until more than two years after the facility's opening. Repairs were not made until after the warranty on the equipment had expired. Problems with the functioning of the respiratory isolation rooms were not discovered until more than two years after the facility's opening. DOC management of the respiratory isolation rooms has not been adequate and has violated public health standards. DOC intends to request replacement respiratory isolation rooms but has not demonstrated the need for these or the ability to manage the existing respiratory isolation rooms.

The following recommendations are made to address these problems:

• The Department of Corrections should immediately require CMS to comply with all contract provisions regarding: (1) documentation of medical care, (2) physician access, (3) quality improvement activities, and (4) accreditation.

• The General Assembly may wish to Defer consideration of funding for the proposed respiratory isolation beds at Greensville Correctional Center until the department demonstrates: (1) the need for the proposed respiratory isolation beds and (2) the ability to manage the existing respiratory isolation facility.

DOC Management of Contract Costs Needs Improvement

DOC has not adequately monitored or controlled costs of the Greensville contract DOC has failed to require the contractor to: (1) bill in a timely fashion that provides sufficient data to verify expenditures, (2) fully implement utilization review. and (3) follow proper procedures for contract modifications. As a result, the price of the contract has exceeded both appropriated amounts and projected expenditures for the contract. To better manage the contract, DOC needs to assign responsibility for monitoring it to a single official or organizational unit at the central office level.

For both FY 1992 and FY 1993, costs incurred for inmate health care at Greensville exceeded appropriated amounts by approximately $5.4 million. DOC has not finalized the costs of the Greensville contract for FY 1993. JLARC analysis projects that costs incurred for the Greensville contract for FY 1993 will exceed appropriated amounts by more than $2.5 million and projected contract costs by more than $1.5 million.

Much of this overage is caused by greater than expected costs of the medical care pool, which pays for off-site care and on-site specialty care for inmates. DOC did not receive a bill for the medical care pool until nearly seven months into the contract, at which time it became clear that its cost would significantly exceed appropriated amounts. DOC has not yet finalized the cost of the medical care pool for FY 1993, but JLARC analysis suggests that it will exceed projected amounts by more than $1.3 million.

CMS did not implement utilization review activities until ten months into the contract. This may have contributed to the high costs of the medical care pool and violated contract provisions. CMS has still not fully implemented utilization review and has not sufficiently trained its nursing staff on utilization review.

DOC has not assigned responsibility for monitoring the Greensville contract to any single official or organizational unit at the central office level. This has created communication problems and diffused responsibility for managing the contract costs. For example, DOC officials at Greensville, in the procurement office, and in the Office of Health Services have not proper1y communicated contract modifications. This lack of communication has resulted in the addition of $200,000in annual costs to the contract.

DOC has not yet required CMS to comply with many contract provisions regarding access to and costs of care. DOC should plan to directly deliver inmate health care at Greensville and should implement these plans if the contractor does not immediately comply with all contract provisions.

The following recommendations are made to address these problems:

• The Department of Corrections should: (1) immediately clarify the costs of the medical care pool for FY 1993, (2) closely monitor and evaluate Correctional Medical Systems' performance of utilization review activities, (3) designate the health services administrator in the Office of Health Services as the central office official responsible and accountable for the contract, and (4) require Correctional Medical Systems to immediately comply with all provisions of the contract for medical care at Greensville Correctional Center. DOC should prepare a plan to deliver inmate health care directly in the event that the contractor does not immediately comply with the all provisions of the contract. The department should report the status of this recommendation to the next session of the General Assembly.

• The director of the Department of Corrections should ensure that DOC follows its internal policies. State contracting guidelines, and contract provisions for contract modifications of the contract for inmate health services at Greensville Correctional Center.

• The General Assembly may wish to restrict the department from entering into additional major contracts for direct delivery of substantially all inmate health care at major institutions until the department addresses the findings and recommendations of this report concerning privatization of inmate health care.

DOC Management of Health Services Need Improvement

Currently, DOC has not clearly delineated responsibility at the central office level for: (1) health care contract oversight, (2) analyzing inmate health care costs. and (3) development of needed management systems, such as quality improvement and cost containment initiatives. Improvement of DOC's oversight and management of inmate health care requires revising the mission, role, structure, and staff qualifications of OHS.

The Office of Health Services has not been assigned clear responsibility for a number of management systems needed to improve the administration of inmate health care. OHS lacks: (1) a defined mission with clear goals and objectives, (2) responsibility for inmate health care funding in the DOC system, (3) authority to enforce health care policies and procedures, and (4) direct supervisory authority over institutional health care staff.

OHS is located three levels of management below the agency director. This diffuses the office's accountability and oversight of health service delivery. Currently, 25 states have the health services director report to the director or deputy director of corrections. In addition, the Office of Health Services has not adequately performed its responsibilities for ensuring consistent documentation of medical care, data collection, quality assurance, infectious disease control, and risk management.

Recommendations to improve DOC health services management include the following:

• The Department of Corrections should: (1) specify the goals and objectives to be accomplished by the Office of Health Services, (2) clarify the role of the OHS, (3) have the Office of Health Services report to the department's director or deputy director for adult institutions, (4) consider placing control of funding for inmate health care in a central office unit responsible for health care oversight, and (5) consider granting central office health care staff direct supervisory authority over all health care staff.

• The department should develop a plan to remedy management deficiencies identified in JLARC reports on inmate dental, mental health, and medical care.

• The department should assess the resources required to accomplish the mission and role it determines appropriate for the central office oversight of inmate health care and assess the qualifications required of its central office health care staff.

• The department should require the Office of Health Services to improve its performance and to develop needed management systems in the areas of: (1) cost tracking, (2) quality assurance, (3) infectious disease management, and (4) risk management.