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UTMB Challenges Texas State Audit, while Legislature Imposes $100 Prisoner Health Care Co-Pay

by Matt Clarke

The University of Texas Medical Branch at Galveston (UTMB) has challenged the findings of a state audit of the prisoner health care services it provides. The challenged audit reported that UTMB improperly charged the state for about $40 million in prison medical-related costs while reporting a $95.1 million deficit. UTMB also complained that the $900 million allocated by the Texas legislature for prisoner health care for FY 2011-2012 was inadequate, and threatened to cancel its contract. The legislature later approved a supplement to UTMB’s funding. Meanwhile, in a glaringly inappropriate attempt to close the state’s budget gap on the backs of its most disadvantaged citizens, Texas lawmakers passed a bill that imposes a $100 annual medical co-pay on prisoners.

UTMB provides health care services to about three-quarters of the more than 152,000 state prisoners in Texas. The audit found that UTMB charged the state for over $16.2 million in disallowed costs not directly related to prisoner health care, charged $6.6 million that was not allowed under the prison health care contract over a two-year period, and gave its prison health care employees $14.1 million in pay increases over a three-year period, all while reporting a $95.1 million shortfall in what UTMB was paid for prisoner medical care compared to what it spent. [See: PLN, Dec. 2011, p.10].

The audit also reported highly questionable practices by UTMB, such as giving bonuses to 40 employees in its prison health care department which they were not eligible to receive, then charging the bonuses to the prison health care contract. At that time, all state agencies had been ordered to reduce their budgets by 15% to close an estimated $27 billion state budget gap.

The auditors further found that UTMB charged the contract more for inpatient, outpatient and physician services than allowed by Medicare and at least one large private insurer. The audit stated that the costs for physicians billed to the contract “average[d] 135% of the Medicare reimbursement amount.”

“After a comprehensive look at the state auditor’s report, UTMB respectfully believes that the primary findings are not correct,” retorted University of Texas System Chancellor Francisco Cigarro. “Subject to approval of the state auditor, I have authorized the hiring of an independent auditor to expedite a review of the state audit findings and report to me and to the Board of Regents its findings and recommendations.”

Essentially, UTMB wants to audit the state audit. However, that may have been part of a larger strategy to defend its prison health care services budget.

When the legislature approved the state’s FY 2011-2012 budget, it significantly cut the amount of funds allocated to prisoner medical care – arriving at a figure of $900 million. This prompted UTMB officials to complain about inadequate funding, citing potential losses of up to $3 million a month and stating, “it is our intent to cease the delivery of correctional health services.” [See: PLN, April 2012, p.24]. The Texas Department of Criminal Justice (TDCJ) responded that it was prepared to transition out of UTMB-provided prisoner medical care and would instead contract with local hospitals. Prisoner advocates saw disaster looming.

“Prisoners already receive grossly inadequate health care that state officials have previously admitted approaches being unconstitutional,” noted Scott Medlock, director of the Prisoners’ Rights Program of the Texas Civil Rights Project. “Throwing how prisoners receive care into limbo would have disastrous consequences for prisoners’ health, and virtually invites a return to the bad old days when federal courts had to supervise how Texas prisons were run.”

State lawmakers were the first to blink, authorizing supplemental funding for prisoner health care services. At least for the next two years, UTMB will continue to be the primary provider of medical care at TDCJ facilities.

Meanwhile, the legislature came up with a less-than-brilliant idea to close the prisoner health care budget gap – start charging prisoners $100 a year for medical care. The flaw in that plan is that Texas prisoners are predominately poor; according to TDCJ officials, about 60% of state prisoners are indigent. Further, they are not paid for their labor and are not allowed to operate any kind of business. Many who are not indigent, but receive a modicum of monetary support, would rather skip visits to the doctor and dentist than pay a $100 annual fee for health care services.

Therefore, the state’s estimate that the co-pay will generate $10 million in revenue is, to say the least, unrealistic. In fact, health care costs may increase as prisoners try to avoid seeking treatment until their infections and diseases are well advanced, as the annual co-pay only applies to prisoners who request medical services. The co-pay is also bound to have administrative costs associated with collecting funds from prisoners’ trust accounts. Thus, whether the $100 annual health care co-pay will actually help close the state’s budget gap remains to be seen.

The co-pay went into effect on September 28, 2011; it does not apply to emergency or life-threatening medical conditions, prenatal care, chronic care, follow-up services recommended by medical staff, or intake health screenings and evaluations. Prisoners who lack sufficient funds in their trust fund account will still receive medical care, and 50% of future deposits into their account will be applied toward the cost of the co-pay.

Sources: Austin American-Statesman,,,

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