1. 1 North Carolina Office of the State Auditor Excellence, Responsibility, Can-Do Attitude, & Teamwork

2. 2 Source: http://www.ncauditor.net/EPSWeb/Reports/Performance/PER-2010-7260.pdfhttp://www.ncauditor.net/EPSWeb/Reports/Performance/PER-2010-7260.pdf

3. 3 PERFORMANCE AUDIT Department of Correction Inmate Medicaid Eligibility Presented by Beth A. Wood, CPA, State Auditor Bill Styres, CPM, Performance Audit Supervisor North Carolina Office of the State Auditor June 17, 2011

4. 4 DOC Wasting Money on Medical Care http://abclocal.go.com/wtvd/video?id=7627758

5. 5 Where Did the Idea Come From? State Auditor Directive to Find Cost SavingsState Auditor Directive to Find Cost Savings Iowa Efficiency ReviewIowa Efficiency Review –Public Works December 2009 –Claim federal reimbursement for eligible inmate hospital care

6. 6 Where Did the Idea Come From?

7. 7 What Was Happening in North Carolina? A 2010 North Carolina Office of the State Auditor Fiscal Control Audit revealed:A 2010 North Carolina Office of the State Auditor Fiscal Control Audit revealed: –Hospitals were billing the Department of Correction: On average 467% of Medicare/Medicaid ratesOn average 467% of Medicare/Medicaid rates Ranging between 198% to 879% of Medicare/Medicaid ratesRanging between 198% to 879% of Medicare/Medicaid rates Q: Can Inmates Participate in Medicaid?Q: Can Inmates Participate in Medicaid? A: Inmates Are Not Eligible for MedicaidA: Inmates Are Not Eligible for Medicaid

8. 8 North Carolina Medicaid Plan Source: http://www.ncdhhs.gov/dma/plan/m.pdfhttp://www.ncdhhs.gov/dma/plan/m.pdf

9. 9 Federal Guidance Source: http://www.ncauditor.net/EPSWeb/Reports/Performance/PER-2010-7260.pdfhttp://www.ncauditor.net/EPSWeb/Reports/Performance/PER-2010-7260.pdf

10. 10 Audit Objective TheThe audit objective was to determine if the Department could reduce inmate health care cost by requiring hospitals and other medical service providers to bill Medicaid for eligible inmate inpatient hospital and professional services.

11. 11 Audit Scope The audit scope included the Departments inmate medical costs and inmate medical information for calendar years 2008 and 2009.The audit scope included the Departments inmate medical costs and inmate medical information for calendar years 2008 and 2009. We conducted the fieldwork from March to June 2010.We conducted the fieldwork from March to June 2010.

12. 12 What Did We Do? Obtained a Letter from the Centers for Medicare & Medicaid Services to Clarify Federal Regulations Concerning Inmate Medicaid EligibilityObtained a Letter from the Centers for Medicare & Medicaid Services to Clarify Federal Regulations Concerning Inmate Medicaid Eligibility Interviewed Department of Health and Human Services, Division of Medical Assistance StaffInterviewed Department of Health and Human Services, Division of Medical Assistance Staff Interviewed Personnel from States That Charge Medicaid for Inmate Health Care CostsInterviewed Personnel from States That Charge Medicaid for Inmate Health Care Costs

13. 13 What Did We Do?

14. 14 What Did We Do?

15. 15 What Did We Do? Obtained the Services of Specialists to:Obtained the Services of Specialists to: –Identify inmates receiving inpatient medical care for 2008 & 2009 –Identify doctor fees related to inpatient stays –Review inmates demographics and medical records –Identify inmates who were likely Medicaid eligible –Compared what was paid vs. what should have been paid under Medicaid rates –Removed FFP to get the state portion –Calculate potential savings

16. 16 What Did We Find?

17. 17 What Did We Find? Inmate Health Care Cost Savings of $11.5 Million a Year.Inmate Health Care Cost Savings of $11.5 Million a Year. Amount Is Equal to the Office of the State Auditors Annual Appropriation.Amount Is Equal to the Office of the State Auditors Annual Appropriation.

18. 18 Recommendations Bill Eligible Inmate Inpatient Health Care Costs to MedicaidBill Eligible Inmate Inpatient Health Care Costs to Medicaid Determine Inmate Medicaid Eligibility and Prevent Eligibility TerminationDetermine Inmate Medicaid Eligibility and Prevent Eligibility Termination Savings Possible for Local GovernmentsSavings Possible for Local Governments

19. 19 New Legislation Requires Department to Use Medicaid For Eligible InmatesRequires Department to Use Medicaid For Eligible Inmates

20. 20 Questions?

21. 21 North Carolina Office of the State Auditor Public Website: www.ncauditor.net www.ncauditor.net or by contacting: Kenneth Barnette Kenneth Barnette Performance Audit Manager Performance Audit Manager919-807-7540Kenneth_Barnette@ncauditor.net

22. 22 North Carolina Office of the State Auditor Bill Styres, CPM Performance Audit Supervisor 919-807-7580Bill_Styres@ncauditor.net