Audit Reveals State Overpaid Medical Bills After Inmates Were Treated In Hospitals

6:44 PM, Mar 1, 2013   |    comments
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 PDF Document: DPS Medical Budget

Raleigh, NC -- The North Carolina Department of Public Safety overpaid several hundred dollars to hospitals  for inmates' medical bills, according to a new audit.

Read: Official Report From State Auditor

A contractor with the NC State Auditor's Office reviewed 10 of the largest hospital claims for inmates for between 2011 and 2012.

During that fiscal year there were more than 893 external hospital claims billed to the Division of Adult Correction.

State Auditor Beth Wood says the overpayments were initially discovered last year in a separate audit.

But because the Division was working to correct other issues found in that audit, the medical overpayments were left on the back burner.

The 10 claims included in the latest audit range from $68,441.70 to $301,869.25 for services hospitals provided sick inmates.

Five of those claims had no overpayments.

But the other five made up for $105,674.48 in overpayment.

Based on the audit, the Division "does not perform externally focused recovery audits of hospital charges."

But spokespeople with the Department of Public Safety say they do.

"There's a review process in place but the systems that we have available to us and the expertise of the people we have doing this are not what we like them to be," said Keith Acree, a communications officer with DPS.

The Division paid duplicate bills and for medical services that had no clear benefit to the inmate, according to the audit.

Wood says because of the small sample, there's a good possibility there were more overpayments made during that time period on the other claims.

"Getting your arms around how much would be the hard thing," Wood said in a phone interview on Friday. "For us to be paying bills of this magnitude and not researching or at least have some procedures in place to hit the biggest ones is just not good business practice."

WFMY News 2 spoke with two representatives from the Division of Adult Correction about the findings in the audit.

Acree said, "We're in the process of doing what we can to correct that and that is hiring a third party to look at the claims for us."

Terri Catlett, the Section Chief for Division of Adult Correction, also added that as a result of the findings, the Division is in the process of hiring a third party vendor to "recover these expenditures" and review inmates' hospital bills in going forward. 

The Division explains that some inmates have terminal diseases, others are chronically ill and for years that routinely drove up the budget.

They went over budget by millions 13 of the last 15 years.

But they have also cut costs considerably in the last two years because of several changes including new internal medical facilities that keep outside costs down, a legislative cap on how much hospitals can bill the Division and a conscious effort to enroll inmates in Medicaid which further reduces the amount the Division has to pay when inmates use outside hospitals.

It is state law that the division finds ways to contain inmates' medical costs.

"These kinds of things that we are finding are continuing to hit taxpayers because if we're doling out money that we shouldn't be then we're wasting the taxpayer dollars," Wood said.

The state auditor says to the Division's credit, they had many other changes to address from the last audit, which they have since corrected.

Acree points out that the Divison's data shows the changes they've made in the last two years have led to a reduction of $40 million in the Division's budget.

Based on their response to this new audit, Wood says, she's confident by next year, the inmates' hospital bill overpayment problem will be fixed.

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