RALEIGH -- The state could save an estimated $11.5 million a year by requiring that hospitals and other health care providers bill Medicaid when prisoners are treated as inpatients, according to an audit released Tuesday.
The report from state Auditor Beth Wood said North Carolina paid about $159 million for inmate health care in 2008 and 2009. Of that, about $26.5 million went to treat prisoners who were potentially eligible for Medicaid, a federal-state health care program for the needy and disabled.
Wood's audit said that the Department of Correction could have saved $17.3 million on those services at Medicaid rates and that the federal government would have reimbursed the state an additional $5.9 million, bringing the two-year savings to roughly $23 million.
"The amount of potential savings will increase when health care reform expands Medicaid eligibility in 2014," the audit said.
Earlier this year, a state audit reported that North Carolina's prison system pays almost five times more for inmate health care than government insurance programs such as Medicaid and Medicare and that costs will continue to escalate. In that report, Wood said spending on hospital care has shot from $17.5 million in 1999 to $55.8 million in 2009.
At the time of that audit's release in February, Dr. Paula Smith, Correction chief of medical services, said the department is outgunned and lacks the expertise to negotiate health care contracts.
Wood's most recent audit says the department does not have procedures in place to see whether an inmate needing inpatient care is eligible for Medicaid. The audit said the department may need to train specialists.
In his response, Correction Secretary Alvin W. Keller Jr. said the department has been working with the state Department of Health and Human Services to determine whether inmates are eligible for Medicaid and to ensure that those costs are reimbursed. The Correction Department hopes to start this process in September, spokeswoman Pam Walker said.
The savings described in the audit may not be so large, Keller wrote. Recent legislation allows the department to reimburse medical providers at no more than 70 percent of the charges. New contracts with medical providers will include Medicaid reimbursement, he said.
