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| State prisons overpaying for inmate care, auditor says |
| By Mercury News |
| Published: 04/12/2004 |
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California's troubled prison system is paying too much to provide health care for inmates because it routinely fails to bid competitively for medical services, the state auditor said last Tuesday. An independent review of Department of Corrections' health care contracts from the past four years found that three-quarters of the agreements were signed without ensuring that the state was paying a reasonable price. "Not only is Corrections unable to demonstrate that its contracts are in the state's best interest, but also its prisons may be paying inappropriate and invalid medical claims," according to the report by Auditor Elaine Howle. Since 1998, prison health care costs from contracts have more than doubled, from $96 million to $239 million in 2002. The audit describes an erratic system for setting the state-paid medical fees. In one case, the department paid 24 percent more than the contracted cost, but at other times the department got a better deal than the federal government pays to provide health care. At issue is a 30-year-old exception to state contracting policy that allows the Corrections Department to enter agreements for most health care services without advertising for competitive bids. The report urged the state to end this practice. The Department of General Services, which oversees state contracting, said it would reconsider its exemption for health care. Corrections officials said they are committed to improving the system, but are concerned that the length of the competitive bidding process would make it difficult to meet unpredictable medical needs. In response to the audit, Corrections Director Jeanne Woodford said prisons need the flexibility to quickly comply with federal court orders requiring timely medical care. |
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