Billing Medicaid for Inmate Care Saves Calif., Other States Millions
California is one of several states saving millions of dollars by using Medicaid funds to pay for some inmates' health care costs, Modern Healthcare reports.
Medicaid since 1997 has authorized states to bill the federal program for inmates who need treatment for longer than 24 hours at a hospital or nursing facility. According to Modern Healthcare, the provision has drawn more attention since the Affordable Care Act's Medicaid expansion went into effect this year, particularly as some inmates have gained coverage under expanded state Medicaid programs.
Overall, states spent $7.7 billion on inmate health care costs in fiscal year 2011, and such costs are expected to increase significantly as the result of the inmate population becoming older and sicker, according a report from Pew Charitable Trusts.
State Savings, Hospital Concerns
Many states are saving money by billing Medicaid for inmate health costs, including:
- California, which is projected to save up to $70 million annually, according to Pew;
- Michigan, which estimated in August that shifting such health costs to Medicaid would save the state $16.8 million in 2015; and
- Ohio, which announced last week that it saved $10.3 million in FY 2014 compared with FY 2013 because of the provision.
However, some hospitals are concerned that the Medicaid provision could hurt them financially, according to Modern Healthcare. For example, Ed Epperson -- CEO of Nevada-based Carson Tahoe Regional Medical Center -- said that the hospital is reimbursed about 20% less by Medicaid than by third-party insurer Hometown Health Plan, which until recently had been paying for inmates' inpatient hospital stays.
More Inmates Leaving Jail With Coverage
In related news, several states that have expanded Medicaid under the ACA are encouraging inmates to enroll in Medicaid upon leaving prison, Modern Healthcare reports.
Several studies have shown that such efforts can help reduce recidivism rates and increase former inmates' use of mental health and substance use disorder services.
However, some state Medicaid directors are concerned that an increase in former inmates enrolling in the program could strain state budgets (Dickson, Modern Healthcare, 9/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.