CorrectCare

Helping Jails Do More . . . With More

Smart Laws Alleviate County Health Care Costs

By Ronald Wiborg, MA, MBA, and Jaime Shimkus

Across the nation, county jails are struggling to provide adequate health care for inmates in the face of daunting financial trends. As populations and acuities rise and budgets flatten or shrink, health services are caught in the squeeze.

Clearly, efforts to “do more with less” aren’t enough anymore. What’s needed is sensible and effective reform, along with creative thinking. This article will discuss several approaches for increasing revenues and reducing expenses for jail health care.

Blame It on the Feds?
The issue of using financial resources to defray the costs of health care in county jails is twofold. It could be characterized as the “front end” and the “back end” of incarceration.

At the front end is a federal rule that individuals who receive federal medical benefits are not eligible to receive those benefits while they are “inmates of public institutions.” The U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services applies the rule to inmates of state prisons as well as persons held in county jails and juvenile detention centers.

Most people would agree that states should be responsible for providing total care, including health care, of inmates residing in their prisons. These people have been convicted of felony offenses.

What causes significant financial woes for county governments is that the CMS rule has been interpreted to include persons who have been arrested and held in county jails, before even being charged with, not to mention being convicted of, a crime.

Furthermore, the rule does not differentiate between minor and serious crimes. The result is loss of eligibility for medical assistance for people who are detained, including those arrested for misdemeanor and nuisance crimes, many of whom are mentally ill.

There is a loophole: Those who can drum up the cash to “make bail” are released from custody and their benefits continue. Those who can’t make bail stay in jail, lose their eligibility and are required to reapply for benefits when released from jail. The reapplication process takes up to 90 days, during which the county has to pay for medical services.

Efforts are underway on Capitol Hill in Washington, DC, to modify the rule to require benefit eligibility to continue until the recipient is convicted of a crime and sentenced to a period of secure incarceration. The National Association of Counties is spearheading the effort, with support from counties across the country and several national organizations, including the National Commission on Correctional Health Care, the National Sheriffs’ Association and the National District Attorneys Association.

If this effort succeeds, it would have little financial downside on federal and state agencies. That’s because health services for Medicare and Medicaid beneficiaries are provided through managed care organizations, and premiums are paid at the beginning of each month. The HMOs do not refund that money when a former beneficiary lands in jail.

On the other hand, the nation’s 3,000-plus counties would save $300 million per year! Society also stands to gain. According to the National Association of Counties, “Counties have found that the cessation (however temporary) of their benefits leads directly to further criminal activity, perpetuating a cycle of their being in and out of the justice system.”

What States Can Do
The back end of this issue involves finding ways to alleviate the financial burden on counties for health care provided in jails. One way is related to, but not governed by, the CMS rule. Although this is a federal rule, it is up to each individual state to determine the process by which eligibility for medical assistance benefits ceases when a recipient is incarcerated.

States can opt to suspend eligibility rather than terminate. In fact, a May 2004 letter from CMS to all state Medicaid directors encourages states to suspend benefits for recipients who are incarcerated both pretrial and postconviction. At least three states (Minnesota, Oregon and New York) now suspend rather than terminate. State departments of human services can suspend eligibility voluntarily. However, these three states found it necessary to enact state laws to do so (click here for text of Minnesota statutes).

Minnesota has also passed two other laws to help stem jail health care costs. One allows counties to be reimbursed for the medical costs of jail inmates who receive benefits through General Assistance Medical Care (a state-funded program for low-income and indigent people who do not qualify for federal programs).

The other law allows counties to be reimbursed for medical services provided to jail inmates who have private medical insurance. Perhaps surprisingly, the insurance industry offered no resistance to this legislation. Because it applies to hospital care, those providers did question their role in collecting this money, but it is the county’s responsibility to collect.

Why did the Minnesota state legislators agree to pass these laws? It’s simple: property taxes. Counties pay for jail health care through property taxes, so any costs avoided have a direct effect on taxes—and voters.

Counties themselves can take steps to control costs while at the same time helping inmates to reenter the community. In Minnesota, the Hennepin County Adult Correctional Facility houses people convicted and sentenced for up to one year. There inmates are screened for economic assistance from federal and state programs, and their applications are processed while they are incarcerated. They are covered the same day they walk out of jail.

— About the authors: Ronald Wiborg, MBA, MA, is the contracts and grants manager for the Hennepin County (MN) Department of Community Corrections. Jaime Shimkus is the editor of CorrectCare.

[This article first appeared in the Fall 2007 issue of CorrectCare.]