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Oregon Considers Subsidizing Prison Medical Costs Through Medicaid
With health care expenses for prisoners consuming more than $208 million of the biennial budget for the Oregon Department of Corrections (ODOC) – a 67% increase since 2005 – prison officials are desperate to contain costs.
Correctional Health Partners (CHP), which provides medical services at ODOC facilities under a contract that lasts until 2015, is exploring how the state prison system can tap into federal Medicaid funding thanks to a rule that says Medicaid will pay the medical bills of prisoners who are otherwise eligible and are hospitalized outside a prison for more than one day.
“The rule has been around for almost 15 years now,” explained CHP CEO Jeff Archambeau. “While it seems straightforward, the mechanics of it are quite complicated.”
Currently, the federal government pays approximately 63% of Medicaid costs in Oregon; the program covers some of the state’s low-income adults, pregnant women, juveniles, people who are elderly, disabled or sight-impaired and those who receive Temporary Assistance for Needy Families benefits.
In 2014, however, Medicaid will be expanded in 25 states to cover all U.S. citizens with an income less than 133% of the federal poverty guidelines under the Affordable Care Act (also known as “Obamacare”). For an individual, 133% of the federal poverty guidelines currently represents $15,281.70 in annual income. Given their lack of financial resources, most prisoners will qualify under the Medicaid expansion. Most recently-released prisoners will qualify for Obamacare, too, as eligibility is based on income. [See: PLN, May 2013, p.20].
During the first three years of the expansion, the federal government will pay 100% of the expanded health care coverage. After that period, states will be responsible for 10% of the cost.
As previously reported in PLN, Oregon is not the only state seeking to subsidize prisoners’ health care expenses through Medicaid. Washington, California and North Carolina have already taken advantage of existing Medicaid payments for prisoners hospitalized for more than one day. Colorado and other states are studying the issue but are waiting for the Medicaid expansion to go into effect. [See: PLN, Jan. 2013, p.40; April 2011, p.44].
According to Beth Goupillon, the Washington Department of Corrections’ (WDOC) Medicaid Coordinator, the state has saved millions of dollars since it began identifying Medicaid-eligible prisoners in 2009. She noted that approximately 75% of the WDOC’s Medicaid reimbursement applications are approved.
“There’s a substantial cost savings, but I don’t know what that is since we’ve been doing the program,” said Goupillon. “It’s in the millions, though.”
Oregon officials also do not know exactly how much savings they could realize by tapping into Medicaid funds. They do know, however, that with the 2014 expansion those savings will increase substantially.
Last year, CHP, a subsidiary of Physician Health Partners, LLC, explored the possibility of becoming a coordinated care organization (CCO), which would allow it to bill medical costs to Medicaid. One potential complication is that health care providers may be unwilling to contract with the state to provide prisoner medical care if they are paid lower Medicaid rates.
According to Archambeau, the ODOC would continue paying hospitals and other health care providers at the same market rate it currently pays for prisoner medical care. CHP would then bill the claim to Medicaid and the state would be reimbursed for a portion of the costs from the federal government.
“It ends up being a reconciliation process rather than either slowing down claim payments or paying providers at a lower rate,” Archambeau explained.
As a coordinated care organization, CHP would also work with the ODOC to assist recently-released prisoners in obtaining health care and other services.
“Part of the way to save costs and the easiest way, of course, is to keep your prison population down,” said Archambeau. “So if we can impact the rate of re-incarceration by making that transition more effective, then there’s probably a business model out there to saving taxpayers money.”
CHP submitted a letter of intent to the Oregon Health Policy Board to become a coordinated care organization, but the company later withdrew its request. Regardless, once the Medicaid expansion goes into effect next year, the 25 states that have opted into the expanded coverage can recoup certain prison medical costs from the federal government under the Affordable Care Act.
During a conference on prisoner health care held at the John Jay College of Criminal Justice in New York City on October 21, 2013, Amy Solomon, an advisor to the U.S. Department of Justice’s Office of Justice Programs, noted that the Affordable Care Act could significantly reduce states’ expenses related to prison medical services and prisoner re-entry.
“Continuity of care is essential if we want to see health and safety benefits,” she said, referring to the need to ensure that prisoners receive health care both during their incarceration and after their release.
Sources: Statesman Journal, www.thecrimereport.org
Correctional Health Partners (CHP), which provides medical services at ODOC facilities under a contract that lasts until 2015, is exploring how the state prison system can tap into federal Medicaid funding thanks to a rule that says Medicaid will pay the medical bills of prisoners who are otherwise eligible and are hospitalized outside a prison for more than one day.
“The rule has been around for almost 15 years now,” explained CHP CEO Jeff Archambeau. “While it seems straightforward, the mechanics of it are quite complicated.”
Currently, the federal government pays approximately 63% of Medicaid costs in Oregon; the program covers some of the state’s low-income adults, pregnant women, juveniles, people who are elderly, disabled or sight-impaired and those who receive Temporary Assistance for Needy Families benefits.
In 2014, however, Medicaid will be expanded in 25 states to cover all U.S. citizens with an income less than 133% of the federal poverty guidelines under the Affordable Care Act (also known as “Obamacare”). For an individual, 133% of the federal poverty guidelines currently represents $15,281.70 in annual income. Given their lack of financial resources, most prisoners will qualify under the Medicaid expansion. Most recently-released prisoners will qualify for Obamacare, too, as eligibility is based on income. [See: PLN, May 2013, p.20].
During the first three years of the expansion, the federal government will pay 100% of the expanded health care coverage. After that period, states will be responsible for 10% of the cost.
As previously reported in PLN, Oregon is not the only state seeking to subsidize prisoners’ health care expenses through Medicaid. Washington, California and North Carolina have already taken advantage of existing Medicaid payments for prisoners hospitalized for more than one day. Colorado and other states are studying the issue but are waiting for the Medicaid expansion to go into effect. [See: PLN, Jan. 2013, p.40; April 2011, p.44].
According to Beth Goupillon, the Washington Department of Corrections’ (WDOC) Medicaid Coordinator, the state has saved millions of dollars since it began identifying Medicaid-eligible prisoners in 2009. She noted that approximately 75% of the WDOC’s Medicaid reimbursement applications are approved.
“There’s a substantial cost savings, but I don’t know what that is since we’ve been doing the program,” said Goupillon. “It’s in the millions, though.”
Oregon officials also do not know exactly how much savings they could realize by tapping into Medicaid funds. They do know, however, that with the 2014 expansion those savings will increase substantially.
Last year, CHP, a subsidiary of Physician Health Partners, LLC, explored the possibility of becoming a coordinated care organization (CCO), which would allow it to bill medical costs to Medicaid. One potential complication is that health care providers may be unwilling to contract with the state to provide prisoner medical care if they are paid lower Medicaid rates.
According to Archambeau, the ODOC would continue paying hospitals and other health care providers at the same market rate it currently pays for prisoner medical care. CHP would then bill the claim to Medicaid and the state would be reimbursed for a portion of the costs from the federal government.
“It ends up being a reconciliation process rather than either slowing down claim payments or paying providers at a lower rate,” Archambeau explained.
As a coordinated care organization, CHP would also work with the ODOC to assist recently-released prisoners in obtaining health care and other services.
“Part of the way to save costs and the easiest way, of course, is to keep your prison population down,” said Archambeau. “So if we can impact the rate of re-incarceration by making that transition more effective, then there’s probably a business model out there to saving taxpayers money.”
CHP submitted a letter of intent to the Oregon Health Policy Board to become a coordinated care organization, but the company later withdrew its request. Regardless, once the Medicaid expansion goes into effect next year, the 25 states that have opted into the expanded coverage can recoup certain prison medical costs from the federal government under the Affordable Care Act.
During a conference on prisoner health care held at the John Jay College of Criminal Justice in New York City on October 21, 2013, Amy Solomon, an advisor to the U.S. Department of Justice’s Office of Justice Programs, noted that the Affordable Care Act could significantly reduce states’ expenses related to prison medical services and prisoner re-entry.
“Continuity of care is essential if we want to see health and safety benefits,” she said, referring to the need to ensure that prisoners receive health care both during their incarceration and after their release.
Sources: Statesman Journal, www.thecrimereport.org
