Improvements to Inmate Healthcare Reimbursement and Internal Processes Could Save $5.6 Million Annually (October 2018)

North Carolina provides health services to inmates at a cost of $322 million annually, an $89 million increase from 10 years ago. The Program Evaluation Division (PED) found the Department of Public Safety’s Health Services division (DPS Health Services), which manages and delivers inmate healthcare services, is partially funded by lapsed salaries and cannot demonstrate results from cost-containment efforts. PED also found statutory and contractual payment arrangements cause the State to reimburse community providers at rates higher than other states. Further, chronically vacant health services positions and subsequent reliance on contract staff costs $25 million annually, and the limited use of telemedicine has contributed to unnecessary costs. Finally, DPS Health Services’s methods for pursuing federal Medicaid funding for community services has been unsuccessful. The General Assembly should direct DPS Health Services to conduct a salary study of healthcare positions, seek federal reimbursement for Medicaid-related staff activities, modify data collection and submission methods for Medicaid applications, develop a plan for implementing telemedicine, and improve supply management practices and services. Further, the General Assembly should modify state law to reduce community provider reimbursement rates and consider establishing a data analysis position and realigning DPS Health Services’s base budget.

Final Report

Executive Summary


Full Presentation with Audio Narration (YouTube)

Presentation of Findings and Recommendations

Report Series Digest

Relevant Legislation:

  • Session Law 2019-135 directs DPS to develop a plan to increase the use of the Central Prison Healthcare Complex; randomly audit high-volume contracted providers; work with the Department of Health and Human Services (DHHS) to enable social workers in DPS Health Services to qualify for and receive federal reimbursement for performing administrative activities related to Medicaid eligibility for inmates; issue requests for proposals to develop an electronic supply inventory management system; work with the Office of State Human Resources to jointly study the salaries of all inprison health services employees; and establish a telemedicine pilot program to provide physical health services to inmates in remote correctional facilities