Purpose of Audit

The purpose of our audit was to examine the County’s internal controls over inmate healthcare for the period January 1, 2011, through December 19, 2012.

Background

Cattaraugus County is located in the southwest portion of New York State and has a population of 80,317. The County is governed by a 21-member Legislature. The Chairman of the Legislature is the County’s chief executive officer; however, the Legislature appoints a County Administrator to coordinate the County’s daily operations. The County’s budgeted appropriations for 2013 are $202 million, which include general fund appropriations of $155 million. The Sheriff’s Office is responsible for administering healthcare services for County jail inmates. Certain costs for these services are eligible for Medicaid reimbursement, for which the County’s Department of Social Services (DSS) is responsible for submitting claims.

Key Findings

• During 2011, the County paid $230,686 for inmate healthcare services for inpatient and outpatient care. We reviewed 59 vouchers totaling $93,038 for inmate healthcare services and found discrepancies with 18 claims totaling $88,540. These discrepancies occurred because County officials did not have adequate procedures to review invoices for inpatient hospital services provided to County inmates and verify that the correct Medicaid Diagnostic Related Group (DRG) rates were used.
• The County Department of Social Services (DSS) has not submitted claims for Federal Financial Participation (FFP) and County officials have not routinely submitted claims for third-party insurer reimbursement for inpatient medical services.
• While the County has negotiated rates for outpatient healthcare services with one provider, it could benefit by negotiating rates with other medical service providers as well.

Key Recommendations

• Strengthen procedures for reviewing inpatient hospital claims to ensure that they are properly coded and billed at current Medicaid rates.
• Implement and monitor procedures to ensure timely submission of Medicaid-eligible inmate inpatient hospital claims for Medicaid reimbursement by the County’s DSS. Consider contacting an inmate’s third party healthcare provider upon incarceration to determine medical billing and reimbursement eligibility.
• Consider negotiating with hospitals and other service providers, similar to the existing negotiated contract with the local hospital, to obtain discounted rates for outpatient services.