Southern Health
Partners

By Kaye B. Syfrett at 10:17 am, Jun 27, 2018

May 25, 2018

Sheriff Andy Strickland
Colleton County Sheriffs Office
Post Office Box 433
Walterboro, SC 29488
Re:

Health Services Agreement

Dear Sheriff Strickland:
SHP appreciates the opportunity to work with you and your staff in managing the inmate medical needs at
the Jail. I am writing this letter to acknowledge renewal of the Health Services Agreement for the 2018-2019
period .
As I previously advised, we will need an adjustment on our service rates this year to help keep pace with the
current market in attracting and retaining strong, well-qualified staff in corrections and the growing costs of
providing medical services. Staffing is just one area where we are experiencing increased costs, in terms of
keeping our facilities covered and offering competitive local-area pay. Increased patient acuity has also
increased our resource needs. Plus, we must account for other operating expenses which unfortunately do
continue to go up each year (such as insurance, administration and travel) . We are committed to keeping
the contract priced reasonably while providing the highest level of quality care for the inmates.
We will also need you to plan for a change in pharmacy coverage terms going forward . Our Agreement with
Colleton County is set up like many of our older contracts with SHP covering the costs of all routine
prescription medications under the base fees . This has become increasingly difficult for SHP to maintain
over time without having a limit on our exposure. With the costs of pharmacy items having increased
considerably, combined with a general decline in health we see of inmate populations (inmates coming in
sicker in poor health, many with chronic-care illnesses), we are now working with customers to make the
transition to a new structure, which allows for a cost-sharing arrangement or cap on the medication costs.
Specifically, we are proposing a $16,000.00 annual limit/cap on SHP's responsibility for routine prescription
medication costs. Under the new terms, SHP will cover up to the first $16,000.00 per annual contract period
in routine prescription medication expenses, and the County will be responsible for all amounts in excess of
$16,000.00. In the event the limit were exhausted for any given contract period, SHP's new practice will be
to either submit invoices for 100% reimbursement of the excess costs, or we could, at the County's election ,
roll the excess charges into the outside cost pool accounting totals. Please know that we will continue to
work diligently with Operations and site staff to maintain cost-effectiveness in managing the pharmacy
program.
A 3% annual increase has been figured on the contract based on continuation of the program under the
amended pharmacy terms (as described above) and keeping the current level of staffing in place. This 3% is
less than medical CPI increase and will give us a new per diem and base contract amount as follows:
Contract Period: July 1, 2018, through June 30, 2019
Base annualized fee :
$245,934.96 ($20,494.58 per month)
Per diem greater than 110:
$1 .14
Annual outside cost pool limit:
$44,000.00
Change in routine pharmacy
New $16,000.00 annual max/cap on the costs of
coverage terms:
routine prescription medications

2030 Hamilton Place Blvd . • Suite 140
Chattanooga . TN 37421
423 .553.5635 (phone! 423 .553 .5645 (fax1

May 25, 2018
Page two

We trust you will understand our position . If you have any questions at all, please feel free to call me. Of
course, we can also make arrangements to have SHP's Chris Hudson come out and meet with you all there
on-site to go over the contract together, provide any additional information you need and work through
questions. My direct number in our NC/SC Regional Office is 803-802-1492, and Chris is at 864-872-0659.
We look forward to continuing services for you in the new contract year. For the historical record , I will ask
you to keep this letter with your contract and return a signed copy to me by on or before June 30, 2018. A
scan
to
email
or
faxed
copy
will
be
fine
(803-802-1495
direct
fax
or
email
carmen.hamilton@southernhealthpartners.com). This will be sufficient for SHP's contract file, unless you
prefer to have a formal Amendment. Except as modified herein , all provisions of the contract will remain in
full force and effect.
Thank you in advance. Again, don't hesitate to reach out if there is anything you need.
Sincerely,

......

/cph
cc:

Ms. Susan Johnson
Ms. Kaye Syfrett