A new prison health care contract that resulted in $50 million in budget cuts being questioned

by | Jun 18, 2018

Organizations that provide drug treatment, mental health and community re-entry programs to the Florida Department of Corrections were forced to cut their budgets almost in half last month following an announcement that the state’s prison system was cutting $50 million from its budget. DOC says it was forced to make the cuts so it could meet it financial obligations to the company that provides health care to the state’s prison inmates.

As first reported by the GateHouse Media newspapers in Florida,some of those providers are raising concerns about a provision in a new $375 million contract that is expected to be finalized this month that provides Centurion of Florida, the prison system’s healthcare provider, with an 11,5 percent “administrative fee” that can be used by the company for a number of costs — including profit for the company.

The new contract that is set to take effect July 1. Centurion is the only health care company that agreed to negotiate with DOC on a new contract to provide health services to the 97,000 inmates in Florida prisons.

“When you’re only negotiating with one contractor, he can drive up the prices. It’s not like the Corrections Department is in a good bargaining position — it’s kind of held hostage to whatever Centurion wants,” said P.J. Brooks, vice-president of outpatient services at First Step of Sarasota.

Centurion negotiated the 11.5 percent “cost-plus” administrative fee after claiming it has been losing millions of dollars while providing health care services to state inmates. Previous providers were turned down by DOC when they had proposed a similar fee in their proposed contracts.

Corizon Correctional Healthcare and Wexford Health Sources had previously provided health care to the prison system. In late 2015, Corizon notified DOC that it was pulling out of Florida because it was losing money on the contract. Wexford was similarly losing money but continued to provide services, until April 2017 when DOC Secretary Julie Jones canceled its contract, which led to the current agreement with Centurion.

The new agreement, which resulted in Jones announcement to cut $50 million from the prison budget, follows the Legislature’s refusal to provide a higher amount of funding for DOC that was proposed by Gov. Rick Scott.

Centurion’s parent company, Centene, is also a provider in the state’s Medicaid managed care through another subsidiary, Sunshine Health.

Centurion has been a significant political contributor to Republicans in Florida. According to GateHouse Media, since Scott took office in 2011, Centurion has contributed over a $1 million to the Republican Party of Florida, political committees that support Scott, or directly to Scott’s 2014 reelection bid.

Meanwhile, 500 inmates may find themselves returning to prison as community drug, mental health treatment and transition programs close their doors due to the budget cuts made by the prison system as a result of the health care contract with Centurion.

Prison official say they regret the budget cuts, but add they are necessary for the prison system to meet its obligation to provide health care to inmates. Those officials say it could be worse. The 11.5 percent administrative fee in the proposed contract for next fiscal year is actually 2 percent lower than the fee in the current contract, which is 13.5 percent.

 

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