Alaska Health Policy Review

On any given day, Alaska's prisons hold 5,400-5,700 individuals. In a recent Senate Finance subcommittee meeting on the Department of Corrections' (DOC) budget requests, a few of Alaska's legislators responded to a presentation by two key employees from the DOC on inmate health care. They asked for an explanation of the high medical costs in the inmate population. The reasons are candidly discussed at this hearing: a focus on treatment as opposed to preventive health care, graying of the population, health care staff shortages, and a need for an electronic medical records system. Testifying in front of the Senate Finance subcommittee are Dwayne Peeples, deputy commissioner for Administration and Medical Services, Department of Corrections; and Leslie Houston, director of Administrative Services, Department of Corrections. This transcript of the Senate Finance subcommittee hearing on March 9, 2010, has been edited for length and clarity.

Links to selected topics

Gray Hair and An Ounce of Prevention
Electronic Medical Records: Better Care, Lower Cost
"Paying and Chasing" to Cover Medical Costs
No matter what you do...
Medical Parole: Too Sick to Be Incarcerated
Negotiating Costs: More on Pay and Chase
The Million Dollar Case

Peeples: To the chair, we can just start with an overview. I would direct you to the 'budget overview' that was previously provided to the committee.

The inmate health care RDU [Results Delivery Unit -- A group of allocations or
program activities combined to achieve a speciﬁc goal] is broken, currently, into two components. One is behavioral health, and the other one is physical health. The behavioral health component was newly created this fiscal year, in FY10. We are proposing to continue that on over into [FY]11. The House version will be sweeping a lot of the programs into a separate program RDUs -- the substance abuse, the sex offender program, and some of the education programs, are set up into separate RDUs. There'll be a difference between what is in the governor's official presentation of the budget structure and what's coming out of the House.

Chair Senator Ellis: And the rationale, as stated in their Finance Subcommittee was ... what?

Peeples: To the chair, to protect and clearly make the programs visible -- that is what we're trying to do, and implement to bring down the recidivism rate. Those monies would be clearly locked up and easily identified for operation. [It is] just like the breakout for the behavioral health was separated from the physical health -- for the fear that physical health would consume all of the behavioral health [funds]. The rationale was somewhat the same.

Chair Ellis: Personally, I'm inclined to be supportive of the House's architecture in this regard, but what is your response or comments on what they've chosen to do in terms of highlighting those programs?

Peeples: To the chair, we have no problems with it. There were no issues at all with us.

Chair Ellis: Fantastic, all kinds of good news today. Please proceed.

Peeples: There are no real significant increases in what we are proposing this year in the governor's original budget. [Some discussion about details omitted here] We are proposing -- and I believe this was also in the House version that was passed out, or will be passing out -- to add $3,050,800 into the physical health component of the budget.

The rationale behind that is our costs continue to escalate in the physical health area. This year, in the supplemental we are requesting $4.6 million supplemental for contract services, and some of that goes into the personnel services line for standby and overtime. We've had a fairly significant hit in the sort of catastrophic, over fifty, over a hundred thousand dollar category -- probably the greatest I've ever seen. We have a list of those cases. I don't know if the committee has received that or not.

"The population is aging. For the type of people we are taking care of, fifty years and older is considered old. These people have not had good health behaviors in the past. I think in the future, the committee should anticipate continued costs escalation of $1-2 million a year in the physical health areas."

Those are the things I'd like to point out, to begin with. We are looking at fairly heavy costs in medical services this year, and anticipated that carrying into the next fiscal year. I think; henceforth, you will have to see adjustments for physical health probably every year due to three things.

[One,] the cost of the CPI, Consumer Price Index, in medical will always be double to triple what the general CPI is. [Two,] our population is continuing to increase. We're at our highest levels we've ever seen for population. And three, the acuity in the type of people that we're intaking and remanding and maintaining in our systems, basically, between the mental health and physical health issues, [do not have] a very good health status. The population is aging. For the type of people we are taking care of, fifty years and older is considered old. These people have not had good health behaviors in the past. I think in the future, the committee should anticipate continued costs escalation of $1-2 million a year in the physical health areas. Back to selected topics list

Gray Hair and An Ounce of Prevention

Chair Ellis: Mr. Peeples, is it department policy to screen people for screenable conditions and diseases?

Peeples: To the chair, when somebody is remanded or arrested there is a preliminary screening. We try to identify right when they're coming in any potential health hazards, any issues, mental health, physical, substance abuse. When you are moved from the one facility to another, the new health care people do another screen to bring themselves up to date, what you're health status is.

Chair Ellis: You're talking about the graying of the prison population, and you know the conditions that go along with that. When someone becomes fifty, they are supposed to get a prostate cancer, PST test, blood test. Does that happen to prevent the expense of cancer down the road by the Department of Corrections, or do people go without screening and then just present if they have cancer, and then we treated expensively rather than preventively?

Peeples: To the chair, there's two types of screening that goes on, or classifications. One, remember we are doing sentenced and unsentenced population. In the unsentenced population, we just do primarily an initial screen. In the sentenced population, we know we're going to have these for a while, so there is more focus on chronic disease. We have a lot of diabetics, and that has had the higher level of attention by our medical staff, especially when you're going off to a sentenced facility. As far as normal preventive type of screening, it is probably not very efficient throughout the system. We use paper records, tracking people through paper records, and the movements back and forth can be awkward. We probably do not do as good of a job as we should for this type of preventive medicine, mainly because of some of our limitations with medical records and availability of staff. Also, we move people around a lot.

Chair Ellis: So you wouldn't, as a matter of department policy, screen somebody for prostate cancer at the age of fifty as recommended for a civilian out of the population. But if someone told their doctor, "I think I'm having problems, urinary tract problems (or whatever it is,) and I think I need to be screened," would that person be able to request that, or is that just ignored until they have cancer?

Peeples: To the chair, I'm not too sure on the regular scheduling, and I'll go back and find out about regular scheduling by age, by type of testing.

Chair Ellis: I'm not trying to extend prisoner rights or procedures. If there's some way to prevent the more expensive, bigger costs down the road, it might be worth considering.

Peeples: To the chair, yes. And the second thing is [when] we present, like you go to present your doctor with your symptoms, then it would be addressed at that point, but I will check on the normal screening process. I could not answer that off the top of my head. Back to selected topics list

Electronic Medical Records: Better Care, Lower Cost

Senator Paskvan: You indicated that your medical records were paper. I was in the electronic medical records bill, and the state of Alaska hopefully is going to go there soon. It's in the ACLU's recommendation that there be electronic medical records. We'd like to hear your thoughts on where Corrections may be currently heading, and when?

Peeples: Through the chair to Senator Paskvan, our medical records has an interesting history on the electronic part. Under the Knowles administration, this department and the Utah and New Mexico departments, primarily Utah and Alaska, did a collaborative development of a medical records system, and it's sitting there. Utah uses it, but it needs some conversions to our system up here. We had a request in last fiscal year to complete our conversion process, [and] it was turned back by the Legislature with a very strong message. We did not resubmit it this year as a capital budget request. I'm trying to find a partner who could help us with bringing it up, and putting it online.

I am looking at the Department of Corrections in Oregon as a potential partner, and also possibly our contractor, Ed Hudson of Colorado, might be a potential to bring it up because they're required to come up with the medical records. So, we are looking at alternatives to bring it up. It would be a good benefit to have one. It would allow our chronic care, our movements of people, to be able to track all the standard things you do with medical records.

Chair Ellis: Any other comments or questions? If not, please proceed. Before you go further, staff reminded me that this subcommittee last year approved the increment that you just spoke about, it went down in conference. Is that your memory of the increment? Go ahead Ms. Houston.

Houston: Thank you. To the chair, there were actually two separate requests. One was in the operating budget, and that was for $180,000 for our research and records component. That was to also fund two positions that would actually do the digital imaging for us using the equipment that we purchase. The second request was in the capital budget, and that was for the actual electronic module that Mr. Peeples was speaking of. And that was, I believe, for $1.5 million. They both went down.

Chair Ellis: So there was an operating and capital component in that project?

Houston: Correct.

"We have a chronic and acute unit, called "Mike Mod," in the Anchorage jail. ... That is basically the chronic area where the more acute mentally ill males are held in our system. ... We see a continued growth in this population, and we are requesting additional funding and capital to handle it a little bit better."

Chair Ellis: Okay. So, you are looking for partners?

Peeples: To the chair, yes. Right now I'm trying to find some partners to help us bring back-up for the conversion. The other item I would like to direct the committee to is a one-time item that was deleted, the security talks for involuntary substance abuse. That was transferred, it was not eliminated, but it was transferred over to H&S [Health and Social Services?]. This year's budget we have no expansions in the mental health area. We are maintaining all the expansions we did last year to general fund match and the empire fund. That was additional staff at Wildwood, additional staff at Bethel, and in the Anchorage jail, and the community-based needs program.

So there's no other changes this year. I am proposing in the capital budget, [that] we change for next year at the Anchorage jail. We have a request in to modify our acute unit. We have a chronic and acute unit, called "Mike Mod," in the Anchorage jail. We are seeing a greater growth in that population. I have a proposal to basically cut a hole in the wall between two units and expand out and increase our capacity for a more secure environment.

Chair Ellis: Excuse me, what was that language you used, "Mike Mod?"

Peeples: M-Mod, we refer to it as Mike Mod. That is basically the chronic area where the more acute mentally ill males are held in our system. We have subacute units at Palmer, another subacute unit at the Anchorage jail, and one at Spring Creek, for the men. We have an acute and subacute unit at Highland Mountain [Garbled]. We see a continued growth in this population, and we are requesting additional funding and capital to handle it a little bit better. Back to selected topics list

"Paying and Chasing" to Cover Medical Costs

As far as physical health, other than the amendment that I mentioned earlier, we are requesting no other additional funds, although that's a fairly big request. We are looking at several cost-containments for this year and for next year. [In terms of] physical health, one is we are looking at seeing if we can do any "pay and chase" for people who may have insurance, if their spouse has insurance when they're in jail. That would primarily be addressed to some limited cases that would be in the unsentenced population. Usually by the time you get to the sentenced population, they don't have any coverage at all. It would be limited to those who had third-party payers such as Blue Cross or Aetna. When somebody is incarcerated who had federal-funded health insurance, there is no fallback for them. The Feds, by mandate and regs [regulations], will not pay for incarcerated individuals.

"We are looking at several cost-containments for this year and for next year. ... [There] are the four areas we're trying to look at as far as covering and controlling the cost, but it will continue to escalate no matter what you do, Mr. Chairman."

The other thing we are doing is we are reviewing our pharmacy plan, looking for a tighter preferred drug list. Also, for the mental health drugs, looking at a two-tiered type of a formulary for those who will be going back into the general population -- primarily the unsentenced or people getting ready to be released. We are looking at giving these people the drugs that are used in the community, which are usually the atypical and the more expensive. For the ones who are long-term incarcerated, we are looking at alternatives, possibly non-atypical drugs for those.

The other area is to look at is figuring out how we could get the electronic medical records up that would help us with pay and chase, chronic care management, and the other elements of patient care. The fourth one would be to take a look at increasing our co-pay that the inmates pay for health care. So other than that, we are looking at modifying our nursing staff coverage. Those are the four areas we're trying to look at as far as covering and controlling the cost, but it will continue to escalate no matter what you do, Mr. Chairman. Back to selected topics list

No matter what you do...

Peeples: I've had a lot of experience, in previous lives, dealing with medical care costs. It's sort of like the Myth of Sisyphus. No matter what you do, rolling that rock up the hill, it's going to come back down on you, but you've got to try. You can control and slow down the growth, but you cannot in the end, stop it.

Chair Ellis: Further comments or questions? Senator French? Back to selected topics list

Medical Parole: Too Sick to Be Incarcerated

Senator French: I'll ask, I'm sure it's been asked before, but I just have to. Is there such a thing as a medical discharge? Does the parole board do it, or is it part of population management ... what do you do?

Peeples: Through the chair to Senator French. There is a statute that allows medical parole. The parole board has a very specific process for medical parole review. We probably would do one to two a year. The statute that controls it is A.S. 3316085.

Senator French: I can look the statute up myself. I'm just curious, if I may Mr. Chairman, why it's so infrequently used when we have some really high-cost inmates? You could at least, at some level, split the cost. I mean you discharge them, they're going to be on Medicaid, we're going to split the cost with the federal government instead of picking up the whole tab.

"We are going to take a closer look at it and see if we can push more into the medical parole. [I've] taken a couple shots on them before personally, and getting it all set up and getting it out is fairly difficult."

Peeples: Through the chair, to Senator French. There are three inhibitors to this. One is, basically the individual has to get to the point of incapacibility to continue to commit the crime he originally did. That's a fairly high standard. Number two, you really need to have [a] well-thought out plan when you parole them into a medical environment. Basically, you're going to have to get them on Medicaid, have them a place to go, and if they are a sex offender, it's off the agenda.

Senator French: Most inmates aren't sex offenders.

Peeples: No, right. The last hurdle is us getting down and preparing the plan, working our way through and getting it set up, and getting the people ready to go out. We do a couple a year, and it requires quite a bit of work. So, prep before the parole board. Half the time, or most of the time, it comes back as people being identified by the Medical Department and moving them on and getting them out. Frankly, it takes a lot of staff time and we have to put a lot of staff time in on it because we don't have the resources to do it. We are going to take a closer look at it and see if we can push more into the medical parole. [I've] taken a couple shots on them before personally, and getting it all set up and getting it out is fairly difficult.

Chair Ellis: And you said they're a couple per year?

Peeples: Yes.

Chair Ellis: Okay.

Peeples: I think that was about it as a quick overview. And then where did the committee want to go from here?

Senator Paskvan: If I could just ask one question? Following up on Senator French, which is cost saving on the pay and chase issue, how many of those are there potentially existing out there?

Peeples: Through the chair, to Senator Paskvan, I am somewhat dubious on what we can really do in that, but we're going to pursue it. Primarily, the only places we could pick it up would be on high-end cases in the unsentenced population. I supervised the pay and chase operation for Medicaid for years. It was a lot of work, [but] the return in Medicaid was okay. I think in this population it's going to be hard to reach. We have entered into discussions with the contractor that Medicaid uses. One of the things, criteria they like to have, is electronic medical records so they can go out and match.

What I would have to do is cherry pick cases that I think I could do something with. There's a couple currently in, that I am looking at right now. A lot of times we're going to have a real struggle with a third-party payer to acknowledge picking it up, so it's going to be a lot of work. There might be a few if I could get a couple of these few hundred thousand [dollar] cases, or $50,000 cases, you get an insurance company to pick up. I think that would be okay. I think the other thing you will see is if my spouse was in jail and I was having to take care of the co-pay -- I wouldn't have a spouse any longer.

Chair Ellis: It all comes back to your electronic medical records legislation.

Senator Paskvan: So, it's easier to find out and chase initially, even if the state paid the co-pay?

Peeples: Yes, so these would be some of the options we would look at.

Chair Ellis: Let's go back to the co-pay. That caught my attention when you first mentioned it. How does that work? Back to selected topics list

Negotiating Costs: More on Pay and Chase

Peeples: To the chair, on a "pay and chase," what you do is you pay up everything first. I would be primary payer because as a doctor or hospital, you're not going to say, "Send this guy the bill." So we would pay whatever we had to pay, and then we would turn around and turn it over to a company and say, "See what you can get out of the insurance company for this bill I just paid." The insurance company would go out and try to recover, or the third-party payer would turn around -- if they had to pay out and pay this and reimburse the state -- they would turn around and go for the family, or whatever else if they had a co-pay of 10 percent, $100, $500, or whatever your limitation is. The insurance company would go after the primary insurer. I would not.

Chair Ellis: Senator Paskvan?

Senator Paskvan: The rate that is charged to you, is that the rate controlled by negotiated contract with the state, with the providers? In other words, do you have the preferred provider rate, instead of paying one hundred cents on the dollar?

"You know, we had an ominous feeling about this part of the budget and the trends, the graying of the population, but you all are confident you're taking actions. Any good ideas that come along, you are all willing to consider them I suppose?"

Peeples: Through the chair to Senator Paskvan, we have preferred provider arrangements with several hospitals where most of our work is done. Alaska Regional [Hospital], I think we have about 50 percent. I can't remember, but it's really good at Alaska Regional. The Mat-Su Valley Hospital, we have one. We have one, I believe, with the Fairbanks Hospitals. I cannot remember the rates off the top of my head, but that's what would be chased, what we paid out for these rates, and try to get the money back from the insurance companies.

Senator Paskvan: In other words, if a medical provider is willing to be a participant for a private practice, or a person in [the] private world, they would go to in this case and say, "Look, I'll take $100 for a $150 charge." Do you get that $100 charge from that private practitioner?

Peeples: Through the chair to Senator Paskvan, yes. It would be our rate. It would be the negotiated rate. Say Alaska Regional had to leave it 50 percent. For a private practitioner, we don't have those types of arrangements -- if it's just for bringing somebody in on a contract basis, non-hospital. So, it depends on whatever we've negotiated for a contract with them on a fee-for-service.

Chair Ellis: Okay, anything further? Any comments to sum things up, or directions? You know, we had an ominous feeling about this part of the budget and the trends, the graying of the population, but you all are confident you're taking actions. Any good ideas that come along, you are all willing to consider them I suppose?

Peeples: To the chair, yes. Some of these that we're going to work on, I am somewhat dubious about big returns on, but it's just a little bit here and a little bit there that you can control.

Chair Ellis: Any statutory changes that are assessed in this effort? Is there anything that you would like to do, that you can't do because of the statute?

Peeples: To the chair, what we want to do is go back in and look at the medical parole limitations. We were going to work with the subcommittee on the House side and take a look at some of those options there, and see if we can administratively or statutorily loosen up some of the criteria for medical parole. That's about it at the moment, that we would pursue. There was, at one time, discussions about paying Medicaid rates only for our services, but that could be somewhat of a limitation also.

Chair Ellis: Okay. Senator French? Back to selected topics list

The Million Dollar Case

Senator French: Just for the purposes of discussion, I looked at the helpful chart. It looks like, to me, that over 10 percent of your medical costs are being incurred by 45 individuals, alone. Certainly, that's a little bit shocking. On the other hand, when you go and look at the total, $36 million for inmate health care, and divide it by the number of inmates, 5,400, you get a figure of $6,800 per inmate per year, on medical care, which just seems high.

Peeples: Through the chair, to Senator French. That's our average daily census, is 5,700. We do almost 40,000 bookings a year, of which probably there's high 20,000, low 30,000s, separate individuals. We have a high turnover.

Senator French: Okay. How else can I figure it out? I mean, how else? I guess I can appreciate that it's not exactly accurate but ... [Some] people for a month, for some people for 11 months, it still winds up to be 5,400 people, basically every night.

Peeples: We have 5,700 every day, right. But it's always different individuals. There's a lot of turnover. The average length of stay is 125 days or so, between unsentenced and the sentenced. And yes, a few consume a lot. I'm going to have one case in there that's going to be probably almost $1 million this year.

Chair Ellis: And what's the million dollar case?

Peeples: Oh, I can't remember. I think it was a cancer case. Do you have that list? There was something in there that was really expensive. Still admitted, and that was $700,000 at that point in time.

Chair Ellis: So that's more expensive than the diverticulitis?

Peeples: Yes. And, to Senator French, through the chair, we'll get you the actual number of unduplicated individuals for that year.

Chair Ellis: Okay, well it's an important topic, we wanted to make sure we focused on this. And thinking about it, because it's definitely a cost center. Back to selected topics list

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