department of corrections: trends in inmate healthcaresfc.virginia.gov/pdf/retreat/2019...

SENATE FINANCE COMMITTEE

Annual Meeting

November 22, 2019

Department of Corrections:Trends in Inmate Healthcare

SENATE FINANCE COMMITTEE 2

Overview

Overview of Topic and Panel Introductions

2020 Session Budget Requests

Update on Inmate Healthcare and Trends

Options for the 2020 Session


Steve Herrick is the Director of Health Services with the Virginia Department of Corrections. Prior to this, he was the Director of Piedmont Geriatric Hospital for twelve years at the Virginia Department of Behavioral Health and Developmental Services. He is also Clinical Assistant Professor in Psychiatry at Virginia Commonwealth University in Richmond. He is a Licensed Clinical Psychologist, a Licensed Nursing Home Administrator, and holds a Master’s Degree in Health Care Administration. Dr. Herrick received his doctorate in Psychology at Virginia Commonwealth University in Richmond, Virginia. He has over twenty years’ experience working in five different psychiatric hospitals.

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Timothy (Tim) Newton is the Director of the Infrastructure and Environmental Management Unit, a group established a year ago, that combined the Environmental Services Unit and the Architecture and Engineering Unit. Tim was the Director of the Environmental Services Unit for 12 years and was the Central Region Environmental Manager for 5 years.Tim has 34 years of experience with the Department of Corrections.

Timothy Newton, Director, Infrastructure & Environmental Mngt. Unit, Dept. of Corrections

Dr. Steve Herrick, Director, Health Services, Department of Corrections


• Inmate healthcare has become a cost driver.

• Approximately 57% of GF funding requested in Public Safety and Homeland Security is related to inmate healthcare for the 2020-22 biennium.

• Healthcare represents nearly 20 percent of the DOC budget. It was 15 percent in 2007.

• Providing healthcare is complex in this population.

• Inmates have higher health care needs than the population overall.

• Approximately 14% of the inmate population is age 55 and over.

• Commonwealth is constitutionally required to provide health care to inmates.

Inmate Healthcare is a Critical Topic


Request (GF $ in millions) FY 2020 FY 2021 FY 2022

Electronic Health Records (Male and Female) - $17.1 $12.9

Hepatitis C Treatment $10.4 $12.6 $14.9

Pilot Projects with State Teaching Hospitals - $6.5 $6.6

Inmate Medical Costs $1.0 $2.8 $6.9

Inmate Medical Transportation - $2.9 $3.9

Opiate Treatment in Community Corrections - $1.3 $1.3

Support for New VCU Outpatient Clinic - $0.5 $1.0

Total $11.4 $43.7 $47.5

DOC Budget Requests for Inmate Healthcare


DOC Healthcare Delivery System is Complex

Inmate Care

Armor, Mediko, GEO Group, Diamond Pharmacy, VCU Health, UVA Health, Other Community Providers

Multiple Contractors

Medicaid (Inpatient Care) and Department of Corrections (Anthem is claims administrator)

Multiple Payers

Department of CorrectionsIn-House Providers

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Department of Corrections

Health Services Unit2019 Senate Finance Committee Annual Meeting:

Trends in Inmate HealthcareNovember 22, 2019

Steve Herrick, Ph.D. Director, Health Services804-887-8118

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Offender Healthcare: A Constitutional Mandate

Correctional systems are required to provide “reasonably adequate” health care to inmates under a 1976 U.S. Supreme Court decision, Estelle v. Gamble.

The case established that the constitutional protections under the Eighth Amendment, which guarantees freedom from cruel and unusual punishment, include that all inmates have a right to a standard of health care that is available in the community.

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Presentation Overview

Currently, our correctional healthcare system consists of state-provided services, contractor-provided services, and academic medical center services. The system is complex and involves thousands of healthcare providers across the state.

• Who we pay for• What we pay for• How much we pay• Cost drivers• Cost management opportunities• Cost management risks

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Offender Health CareWho We Pay For

• Approximately 38,500 state responsible offenders who reside in VADOC facilities, local jails, and regional jails

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Offender Health CareWhat We Pay For

• Medical care for all state responsible, incarcerated offenders when such care is not covered by Medicaid (For incarcerated offenders only inpatient costs are covered by Medicaid)

• Compensation for approximately 500 state healthcare providers (includes salaries, fringes, and health insurance)

• Comprehensive medical contracts (Armor, Mediko)• Medical service providers (Specialists, staffing agency nurses)• On-Site Contractual Services (Dialysis)• Pharmaceuticals • Medical and dental supplies and equipment

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VADOC Health Care Contracts

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Offender Health CareHow Much We Pay

Comprehensive Health Service

Contracts, $63,964,169, 29%

Offsite Care - DOC Share, $51,216,946,

23%

Offsite Care -Contractor Share, $21,639,553, 10%

Onsite DOC Staff Costs, $31,989,883,

15%

Prescription Drugs, $22,255,690, 10%

Other Health Services,

$12,974,290, 6%

Onsite Contract Costs, $9,413,929,

4%

Administration & Other, $4,514,052,

2%Supplies,

Equipment, and other, $3,181,801,

1%

Total Offsite Care,

FISCAL YEAR 2019 Healthcare Expenditures

$223.6M

Comprehensive Health Contracts include total costs of health care

i.e. prescriptions, staffing, administration

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Offender Health CareCost Drivers

Medical costs increased approximately 37% FY12-FY19• Addition of beds: increased demand for infirmary and long-

term care; serviced by contract sites• Increased use of medical service contractors and agencies:

state-wide recruit/retention issues; national problem• Industry increases: increases in both inpatient and

outpatient costs. • Increased cost of pharmaceuticals: namely specialty and

biologic drugs; some cost mitigation due to discount pricing through VCU

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Offender Health CareCost Management Opportunities

• When a patient is unable to return to an infirmary bed we are forced to pay outpatient bed rates (Medicaid will not pay for a discharged patient stuck in the hospital) Returning a patient to an infirmary bed cost a fraction of the cost. – 1 bed at VCU = approximately $474,500 per year ($1300/day)– 1 bed at SHMH = approximately $365,000 per year ($1000/day)– 1 bed at infirmary = approximately $120,000 per year ($330/day)

• Explore better rates through third party administrator • Use a third party to conduct utilization and claims reviews• Legislate a rate tied to Medicare• Partner with academic medical centers to staff and coordinate care

for offenders

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Offender Health CareCost Management Risks

• Federal Class Action settlement agreement at Fluvanna Correctional Center for Women

• Lawsuits related to providing Hep C medications• Need for Electronic Health Records (currently in development)

Medical Space Needs of the DOC:

Powhatan Infirmary (Phase I)&

Deerfield Correctional Center Expansion

Dr. Steve HerrickDirector of Health Services

Timothy NewtonDirector of Infrastructure & Environmental Management

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Continuum of Medical Care

Sick Call Medical Observation Infirmary

Long-Term Care:•Assisted Living•Nursing Home•Skilled Nursing•Dementia

Discussion Specific to Male Infirmary and Long-Term Care Needs 18

Continuum Bottlenecks

Sick Call Medical Observation Infirmary

Long-Term Care:•Assisted Living•Nursing Home•Skilled Nursing•Dementia

Due to an insufficient number of infirmary beds and with long-term care offenders backing up into the infirmaries, offenders are housed in other more expensive areas.

Unable to put sick offenders into an infirmary bed, those from sick call or medical observation are more likely to go to a hospital for care

Lack of long-term care beds results in these offender types filling up infirmary beds or being housed outside of an institution

E.g. At Southampton Memorial for $1,000+ per day

Offsite Medical Care

Institution non-medical beds

HospitalBed

Sick SR offenders in jails needing

specialized care

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Addressing BottlenecksRequires an Interdependent Plan

Build modern infirmary at State Farm Complex

Renovation of current facilities more costly than new construction

Expansion of dormitory style infirmaries creates costly inefficiencies

Expand Deerfield Correctional Center

Must be responsive to the needs of each type of Long Term Care Patient (e.g. AL, NH, SNF, Dementia)

Growing need for each type of long-term care as a result of aging population trends

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Current State ofState Farm Infirmaries

Deep Meadow Infirmary21

Current State ofState Farm Infirmaries

A double-bed infirmary cell converted to single-bed cell for an offender with dementia (PMU)

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Issues to Consider• Offender at Vibra

(Medical Cost >$600,000 + $200,000 in Correctional Officer cost over 6 months)

• Possible Infection Risk • Chemotherapy Administration• Post Surgery Rehabilitation• Mobile Imaging• Cardiac Clinics• Southampton Memorial Utilization

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Powhatan Infirmary Request (Phase I)Renovation of current infirmary isn’t cost effectiveDemolition of closed segregation buildingConstruction of 48,000 SF medical building containing

o 112 new infirmary bedso Diagnostic & procedure “clean rooms”o Combination of wards and isolation cellso Exterior mobile unit hook-upso Offices and Support services, such as kitchen, laundry, & pharmacy

Will accommodate:Offenders of all security levelsExpansion of onsite medical care/procedures (e.g. chemotherapy, urgent care, etc.)

$41 million

Increases collaboration with VCU and UVAReduced number of offsite medical care = cost savings & increased security

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Powhatan Infirmary (Phase I)

NewInfirmary Location

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Current State ofDeerfield

Cost of overflow at Southampton Memorial in FY2019 = $2.4 million

(Average Census at SHM is 5 offenders per month)

CurrentBeds

Beds Available June 2019

Infirmary 18 0

Assisted Living 390

(72 waiting)

Nursing Home/Skilled Nursing 00

(63 waiting)

Dementia Care 00

(46 waiting)

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Deerfield

Assisted Living Ward with Hospital Beds

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Deerfield

General Population Ward 28

Deerfield Expansion RequestConstruction of a new 115-bed medical building containing

o Diagnostic & procedure “clean rooms”o Additional Assisted Living bedso Combination of wards and cellso Nursing Home and Skilled Nursing care bedso Secure Dementia unit with “endless hallway” o Physical therapy spaceo Offices & Support services

$30 million

Reduces number of offsite transports and hospital stays for geriatric offenders who could be cared for onsite

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Deerfield Expansion

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Medical Needs Summary

• New Infirmary (Phase I) will:– Address inadequate number of infirmary beds– Improve efficiencies in providing care– Decrease offsite utilization and cost– Allow for faster medical jail transfers – Decrease medical transportations– Treat offenders within secure areas

• Expanded Assisted Living will:– Address varied needs of VADOC’s aging population– Decrease pressure placed on infirmary beds– Decrease utilization and cost of offsite care– Decrease utilization of medical transportation

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Thank You for your Attention &Consideration

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Major JLARC Recommendations:

• Pilot project to pay Medicare rates.

• Provide more treatment for inmates with chronic conditions at UVA and VCU.

• Modify contracts to provide incentives for stability and enforce standards.

• Implement Electronic Health Records.

• Initiate pilots with UVA and VCU to provide comprehensive care at a DOC facility.

• JLARC Option: Consider conditional release for serious illness.

Selected JLARC Recommendations (November 2018 Report)

Findings1) DOC spending similar to other

states.

2) DOC pays more than other public payers.

3) Compassionate release polices are restrictive.

4) Spending for inmates with terminal illness / complex conditions is higher than other inmates.

5) Staffing, record keeping, and monitoring pose legal and financial risks.

Access the JLARC Report at http://jlarc.virginia.gov/2018-inmate_health_care.asp


Options for the 2020 Session

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• 2019 General Assembly directed DOC to explore opportunities to better utilize the state teaching hospitals.

• VCU Health:

• Establish orthopedic and infusion services clinic at State Farm at a cost of$1.9 million GF a year.

• Expand use of 340B (Federal discount program) drug pricing to cancer and other high-cost drugs.

• UVA Health:

• Provide Hepatitis C drug treatment at Fluvanna Correctional Center.

• Would treat up to 130 inmates year at a cost of $3.7 million.

Should There Be a Larger Role for State Teaching Hospitals?


• Infection common among inmates.• One in three* inmates may have Hepatitis C.

• DOC has initiated opt-out screening for all inmates upon entry and current inmates with high-risk factors.

• Hepatitis C Drugs are expensive but prices have declined.• Increase access through state teaching hospitals for discounts.

• Other states have developed creative financing models.• Louisiana and Washington are using a subscription

model.

Fiscal Issues Surrounding Hepatitis C

* Source: Centers for Disease Control.


• Cost-Effectiveness of the Delivery System:• Consider use of Medicare rates. JLARC estimated DOC savings of $10 million in FY 2017

for outpatient and physician services.

• Expand role of State Teaching Hospitals to better unify the service delivery model.

• Likely reduce inmate transportation costs and savings through federal pharmacy discount program.

• Consider further study for UVA and VCU Health Systems providing comprehensive care at two DOC sites.

• Implementing Electronic Health Records:• Critical need to move from paper-based records, however existing funding may need to be

supplemented.

Summary of Options for 2020 Session


• Hepatitis C Funding:

• Consider options to lock-in lower prices.

• Expand use of discount pricing through the state teaching hospitals.

• Reducing Bottlenecks in Care:

• Consider increasing infirmary and long-term care space and the potential savings from alternative placements, which may include developing other public / private partnerships.

• Capital outlay options need to account for the full capital / operating costs for comparison to private sector costs.

Summary of Options for 2020 Session

department of corrections: trends in inmate healthcaresfc.virginia.gov/pdf/retreat/2019...

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