North Carolina DOC Medical Overpayments Exceed 10% of Total Bills

The North Carolina Department of Public Safety, Division of Corrections (DOC), is in need of the services of a professional recovery audit firm, an audit by the state’s Auditor concluded. The audit uncovered more than $105,000 in overpayments on just 10 bills submitted by eight hospitals for prisoner health care.

The audit covered the period from July 1, 2011, to June 30, 2012. During that period, DOC paid 893 hospital claims worth more than $14 million. The audit focused on the 10 largest claims worth about $1 million. It was found that DOC had overpaid approximately $105,700 on those claims, representing an overpayment of 10.6 percent.

The overpayments occurred because of separate billings that are normally part of a larger service, charges for services provided with no clear patient benefit, and duplicate charges. The DOC did not realize or suspect the claims included excessive billing, so it paid the bills.

“The [DOC] did not previously identify these or other over-billings because it does not perform externally focused recovery audits of hospital charges,” states the report. This contrasts with state law, which requires DOC to explore medical cost containment methods. Large ...

GEO Group Reaps Higher Profit from New Mexico Prisons than Other States

New Mexico pays significantly more to house prisoners in private prisons than other states, concluded a 2007 state legislative report. “Business decisions across two administrations may result in New Mexico paying an estimated $34 million more than it should pay for private prison costs,” concluded the 100-page report from a Legislative Finance Committee audit team.

As of March 2007, New Mexico housed 6,574 prisoners. Of those, 2,790 prisoners, or 42 percent of the population, were housed in private prisons, which was the highest rate of private prison use in the nation.

Between Fiscal Year ’01 and Fiscal Year ’06, annual spending on private prisons increased 57%, from $34 million to $54 million. Yet, the number of prisoners over that period increased only 21% from 2,348 to 2,840. Increases paid to the private prison operator, GEO Group, were blamed.

The report found an increase in annual per diem rates was caused by the New Mexico Department of Corrections (Department) raising the rate yearly by an amount equal to 80% of the consumer price index (CPI) or other increase up to a five percent cap. This increase in the entire ...

When Halfway Houses Pose Full-Time Problems

by Derek Gilna

A recent interest among government officials in reducing prison populations as a way to cut costs, stemming from the 2008 Great Recession that resulted in significant budget deficits, has placed renewed emphasis on the importance of halfway houses. As more prisoners are released there is a corresponding need for more post-release housing – including reentry facilities.

Loosely defined as a “halfway” point for prisoners between incarceration and freedom, halfway houses have experienced a number of problems that indicate the industry is in need of systemic improvements. If states continue the trend of reducing their prison populations and more federal prisoners are released due to sentencing reforms [see, e.g., PLN, Aug. 2014, p.26], then halfway houses – also known as Community Corrections Centers (CCCs) and Residential Reentry Centers (RRCs) – will have to increase their capacity as well as the quantity and quality of the transitional services they provide.

An Industry Plagued with Problems

Although some halfway houses are adequately managed and staffed with competent professionals, others are operated more for profit than an interest in helping offenders successfully return to society. Too many incidents involving poorly-supervised halfway house residents and indifferent, ...

Tennessee Man Sues for Placement in Women’s Facility for Three Years

"How can you not tell a vagina from a penis?” asked Carla Brenner, aka Lamonda Fuller, a female impersonator who filed suit against the City of Nashville, Tennessee and the private company that held him in a women’s facility for three years.

“The big hair, the makeup – I am an entertainer, a drag queen,” Brenner stated. “That basically means a man who enjoys dressing as a woman. It’s not a woman. I have no intention on being a woman – never, ever have.”

Nevertheless, when Brenner was convicted of stealing a purse in Nashville, he was sent to a Corrections Corporation of America (CCA) facility that houses women offenders.

Brenner said he was told not to say anything, to pretend he was a woman and to go to the women’s facility, for reasons that were unclear. He went so far as to check a box that said he was female, officials noted. That’s apparently all it took.

Brenner dismissed attempts to fault him for his predicament. “They had two doctors – someone from the board of health and a Metro administrator come to the jail,” he said. “And ...

CCA Board Member Steps Down from Open Government Organization

Corrections Corporation of America (CCA), the nation’s largest for-profit prison firm, is also one of the least transparent government contractors despite performing an inherently governmental function – incarceration.

For example, CCA has vigorously opposed efforts to require the company to comply with state public records laws. In Tennessee, where CCA is headquartered, the company fought a public records suit filed by Prison Legal News managing editor Alex Friedmann for five years before conceding defeat after two appellate court rulings. [See: PLN, June 2013, p.14]. CCA also refused to comply with PLN public records requests in Texas and Vermont, resulting in litigation in those states. [See: PLN, April 2014, p.35; July 2013, p.42].

Additionally, the company has lobbied against the Private Prison Information Act – federal legislation that would extend the Freedom of Information Act to privately-operated facilities that house federal prisoners. [See: PLN, Feb. 2013, p.14].

Therefore, given the company’s lack of transparency and public accountability, it was both ironic and incomprehensible when CCA board member Charles L. Overby joined the board of directors of the Tennessee Coalition for Open Government (TCOG) in March 2014. TCOG, a non-profit ...

Controversy, Criticism Plague Brooklyn Halfway House

by Derek Gilna

Community First Services, Inc., established by Jack A. Brown III in 2005 to provide transitional services for prisoners returning to New York City, has come under scrutiny following news reports that cast doubt not only on the organization’s halfway house but also the oversight provided by the federal Bureau of Prisons (BOP).

Congress had the right idea when it passed the Second Chance Act, a broad legislative initiative to make it easier for prisoners to receive the reentry assistance and job training and placement they need to help reduce high recidivism rates. [See: PLN, Feb. 2009, p.8]. However, as detailed in this month’s cover story, that lofty goal has foundered on the reality that there are too few halfway houses capable of providing necessary reentry services and too few trained personnel to provide the counseling, treatment and job placement needed.

As the number of federal prisoners has steadily climbed over the past several decades, so has the number of prisoners released into the community after completion of their sentences. Unfortunately, the capacity of BOP licensed and approved halfway houses has not kept pace – many are overcrowded and in some cases ...

Prison Bankers Cash in on Captive Customers

by Daniel Wagner

Pat Taylor doesn’t believe in going into debt. She keeps her bills in a freezer bag under her bed, next to old photo albums, and believes in paying them on time religiously. For Taylor, living within your means is part of being a good Christian.

Lately, Taylor, 64, has felt torn between that commitment and her desire to be a loving, supportive mother for her son Eddie.

Eddie, 38, is serving a 20-year prison sentence at Bland Correctional Center for armed robbery. He’s doing his time at a medium-security Virginia state prison located 137 miles northwest of Johnson City, across the dips and valleys of the Blue Ridge Mountains here in the heart of Appalachia. The cost of supporting and visiting Eddie keeps going up, so Pat makes trade-offs.

“I would send him money even if it broke me, because I do go without paying some bills sometimes to go see him,” Pat says.

Between gas to make the trip and overpriced sandwiches from the prison vending machine, visiting Bland costs about $50, a strain on her housekeeper’s wages. So she alternates, visiting Eddie one week and sending him money ...

$690,000 Settlement in HRDC Suit Over Death of Prisoner’s Baby at CCA Jail

by Derek Gilna

In August 2014, Corrections Corporation of America (CCA), the nation’s largest for-profit prison firm, settled a federal lawsuit filed by PLN’s parent organization, the Human Rights Defense Center (HRDC), on behalf of a former ...

Ethics Charge Against Former U.S. Marshal Ends in Pre-Trial Diversion

by Derek Gilna

A criminal ethics charge filed against a former U.S. Marshals Service agent in Arizona who had applied for a job with a private prison company he previously monitored has been dropped, and prosecutors let him enter a pre-trial diversion program. At the same time, former agent Thomas B. Bullen is proceeding with a lawsuit against the Marshals Service.

The Arizona U.S. Attorney’s Office refused to comment on Bullen’s case or the requirements of the pre-trial diversion program, which he agreed to enter in October 2013.

Bullen was indicted in 2012 for allegedly violating a federal ethics law that prohibits federal employees from taking jobs with companies they are responsible for overseeing. In Bullen’s case that included Corrections Corporation of America (CCA), which operates a detention facility in Florence, Arizona.

Bullen was a chief administration officer for the Marshals Service until 2011, when he was demoted and put in charge of overseeing the agency’s contract with CCA and monitoring the company’s compliance.

A federal indictment said Bullen had described his duties in an unrelated proceeding, stating: “I go throughout the facility and compare the contract with what they ...

JPay Fined in Pennsylvania, Michigan for Operating without a License

As indicated in this issue’s cover story, JPay, a company incorporated in Delaware and based in Miami, Florida, and the industry leader in prison money transfer services, has been fined $408,500 for operating without a license in at least seven states – including Pennsylvania and Michigan.

JPay allows consumers to transfer money by using credit and debit cards through its website and by phone, through cash transfers with cash agent locations that contract with JPay, and by mailing money orders to the company. JPay charges consumers a fee for most money transfers.

The company’s contract with the Pennsylvania Department of Corrections specifies it is the sole provider of electronic fund services for state prisoners.

In August 2011, the Pennsylvania Department of Banking (PDB) concluded an investigation that found JPay had not been licensed as a money transmitter as required by the state’s Money Transmitter Act, 7 P.S. §§ 6101-6018. Yet the company had been transferring money from Pennsylvania citizens to prisoners since December 2004.

The PDB found that JPay did not meet any of the Act’s exemptions; during the investigation, the company was cooperative and provided information and documents to ...