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PHS Fails Benchmarks In NYC Jail Medical Contract; Fined $250,000

Prison Health Services (PHS), nearing the end of its three-year $359.6 million contract to provide medical, dental, mental health and pharmaceutical services to ten of the eleven New York City jails, was audited by the State Comptroller's Office in June 2007. The 26 page audit report revealed that over 27% of the contract's performance benchmarks were not being met, leaving the 14,000 prisoners underserved. Oversight of the contract is performed daily by the City Department of Health and Mental Hygiene (DOHMH). In 2005, DOHMH fined PHS $250,000 under the contract's liquidated damages provision, which amounted to about 5% of PHS's $4.75 million administrative fee on $102 million in services for that year.

While DOHMH reviews prisoner medical files daily, it reports on PHS's performance only quarterly. These reports are in reference to contract benchmarks for delivery care. The auditors found that over 27% of such benchmarks were not met in two consecutive evaluation periods, suggesting a failure to "get it" when dinged with the initial bad report. Overall, fifteen benchmarks were "not substantially met" in either the first quarter, second quarter or both, in 2005. These included intake examinations, mental health documentation, HIV treatment, medical records, specialized housing, diabetic care, suicide watch, and medical follow-up timeliness.

As a threshold matter, the auditors first found that DOHMH was doing a thorough job in its daily monitoring task, although its "quarterly" reports were sometimes not timely. They observed that after being found deficient by DOHMH, PHS did recover -- if only two quarters later. But not always. When mental health delivery suffered from inadequate clinic supervision, it took two corrective action plans to bring staffing up to contract levels. And after a corrective action plan was put into place in 2005 regarding intake medical history and examinations, performance actually worsened in the two subsequent quarters. Medical follow-up untimeliness was another problem, with contract benchmarks being missed in 5,600 documented instances over a nine-month period.

The 5% fine charged to PHS in 2005 may not have been a sufficient disincentive to gain the desired results. Presently, liquidated damages require $5,000 to be assessed for the first quarter in which a benchmark is not met, increasable to $10,000 in subsequent quarters. With an eye towards performance improvement, the auditors recommended tougher contract terms, including harsher liquidated damages for non-compliance.
These should be implemented immediately, and certainly for the next contract after December 2007, with whomever the contractor might be. Also high on the list was a need to develop electronic medical records.

DOHMH responded to the audit by observing that such benchmark failures did not necessarily equate to substandard medical care or that prisoners were being denied adequate medical services. See: Contracted Health Care Services For New York City Prison Inmates, Office of the State Controller, Division of the GAO, Report No. 2005-N-5 (June 2007). The report is available on PLN's website.

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