Audit finds wasteful spending in prison health system | TahoeDailyTribune.com

Audit finds wasteful spending in prison health system

Don Thompson
Rich Pedroncelli / The Associated Press / Controller Steve Westly, right, discusses the audit on California's prison health care system with Robert Sillen, the system's federal court-appointed receiver, in Sacramento on Wednesday.
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SACRAMENTO (AP) – A urologist charged California’s prison system $2,036 an hour to treat inmates. An orthopedic surgeon billed the state for 30 hours’ work – for a single day.

The examples are contained in an audit released Wednesday that found rampant waste in how California’s prison health care system spends money on outside doctors, nurses and laboratories.

The lax spending practices have cost California taxpayers millions, according to the audit by the state controller’s office. Prison health care spending soared from $153 million in 2001 to $821 million this year – an increase of $668 million, or 437 percent.

“Waste, abuse and management deficiencies are rampant” in contracted health care services, state Controller Steve Westly said during a news conference.

He said the rise in overall costs is too great to be explained by normal increases in health care services. Westly said he will ask the state attorney general to consider bringing criminal charges against the unnamed doctors and others whose actions are detailed in the audit. He also will seek compensation.

An attorney general’s spokesman said the office will review the audit.

Westly, who unsuccessfully sought the Democratic nomination for governor in the June primary, said the audit found what he characterized as gross mismanagement.

“We’ve got to put a stop to it,” he said.

California’s prison health care system already operates under the authority of a receiver who was appointed by a federal court. It is one of several parts of the state corrections department in which reforms are being dictated by agents assigned by federal or state judges.

Westly said he ordered the audit in April after Robert Sillen, the receiver who controls the prison health care system, reported that the Department of Corrections and Rehabilitation was $58 million behind in paying for contracted medical services.

Some providers – including the urologist and surgeon – took advantage of the department’s poor negotiations for services and lax oversight of billing and payments, the audit states. The corrections department paid the orthopedic surgeon, for example, nearly $1.5 million in one year.

Sillen said the audit reinforces his view that the state could save money in the long run by hiring more of its own doctors, pharmacists and nurses instead of contracting for services. He said that within weeks he plans to order substantial salary increases for medical professionals so their wages will be competitive with those working for private companies.

Corrections spokesman Oscar Hidalgo said he couldn’t comment on the audit’s specific allegations of over-billing. But he said prison health care reform is included in Gov. Arnold Schwarzenegger’s budget and in a $6 billion prison building plan the governor is asking state lawmakers to approve when they return next week from their summer recess.

“The department has been working with the receiver to fix some of the problems that exist and have existed for decades,” Hidalgo said.

The audit is the latest critical review of prison health care spending. The prison system’s inspector general and the Bureau of State Audits also have found overspending, mismanagement and abuse by outside contractors.

Westly said his audit shows the department has failed to improve.

In one case, the department overpaid a contractor nearly $500,000 over 10 months. The laboratory provided false test results for inmates suspected of having hepatitis C, but the department paid for retests and renewed the lab’s contract for another three years.

The health care system has been plagued by neglect and malpractice for years. The poor conditions led to a 2001 lawsuit filed on behalf of inmates, which in turn led to the appointment of the federal overseer.


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