OFFICE OF THE INSPECTOR GENERAL

BUREAU OF INTERNAL AUDIT

FLORIDA DEPARTMENT OF CORRECTIONS
CONTRACT MANAGEMENT REVIEW

Contract S6149 – Prison Health Services at Taylor CI
Paul C. Decker, Inspector General
Report # CMR06002

Donald L. Miller, Chief Internal Auditor

October 18, 2006

BACKGROUND
Contract S6149 was awarded in August 2005 by the Department of Corrections
(agency) to Prison Health Services (contractor) for the provision of medical, dental and
mental health services to inmates at Taylor Correctional Institution. As originally
implemented, this contract covered a 12-month period through July 19, 2006.
An
amendment extended the contract through January 19, 2007. Historically, Prison
Health Services has provided contracted health care at Taylor CI for more than 10
years.
OBJECTIVES
Our review objectives were to determine whether the following actions were carried out
pursuant to the terms of the contract:
1. the contractor delivered health care services as required by the contract;
2. the agency monitored the contractor’s performance in a manner adequate to
detect significant deficiencies in service delivery; and
3. contract payments were in accordance with the terms of the contract.
SCOPE AND METHODOLOGY
The scope of our review included examining agency and contractor compliance with
contract terms for the period August 2005 through August 2006. Due to issues which
surfaced during the review related to reimbursements for services provided by the
agency that were deemed the contractor’s responsibility, we expanded our review
period to include select records and reports dating back to 2002.
In examining the deliverables, we relied primarily on review systems established by the
agency, and to a lesser extent, those utilized by the Correctional Medical Authority and
the American Correctional Association, each of which bear some responsibility for
assessing the agency’s health care delivery systems.
We examined reports
documenting the annual Clinical Quality Reviews (CQR) conducted by the agency in
2005, and reviewed medical records at the Taylor CI health services unit to verify CQR

corrective action. We also interviewed staff at Taylor CI, Central Office and at the
Region II business and health services offices. We reviewed contractor invoices and
payments for accuracy, and documented the system used to recover the cost of
services provided by the agency that were the contractor’s responsibility. The latter
effort included interviews with staff at Reception and Medical Center (RMC).
RESULTS OF REVIEW
ASSESSMENT OF PRIMARY DELIVERABLES
The deliverables of this contract comprise a comprehensive array of medical, dental and
mental health services for inmates housed at Taylor Correctional Institution. That
facility encompasses the main unit, annex and recently opened work camp. The Taylor
CI warden and OHS staff responsible for health care quality management and contract
monitoring agreed that the contractor has done a satisfactory job of providing health
services to inmates, and has addressed issues promptly when notified of deficiencies.
Documentation from the 2005 CQR supports this conclusion.
A comprehensive CQR conducted by OHS in August 2005 found 27 deficiencies (noncompliance with agency standards) of 398 standards examined. These standards are
the same as those used by OHS to monitor health care quality at all agency institutions.
Follow-up and corrective-action reports indicated that the deficiencies were addressed
and corrected by the contractor within 90 days or less of notification. These CQRs have
provided an effective system for monitoring contractor performance, with the exception
noted below (Finding 1).
The American Correctional Association (ACA) conducts periodic comprehensive
reviews of the agency’s correctional institutions, and provides nationally recognized
accreditation when those facilities meet accepted standards. Taylor CI maintained ACA
accreditation during its 2000 and 2003 ACA audits, and scored no significant
deficiencies in the health care area.
Finding #1: A 2003 CMA survey report found that PHS failed to provide timely
psychiatric evaluations for inmates at Taylor CI. The delays continued for almost
two years, until action was taken to correct the problem at the end of 2005. OHS
should have required PHS to take corrective action much earlier.
The Correctional Medical Authority (CMA) was charged with conducting
comprehensive surveys of the agency’s physical and mental health care systems. In its
2003 survey at Taylor CI, the CMA reported only six findings in the physical health care
area, “representing relatively minor departures from CMA standards, prevailing practice
standards generally accepted in the community at large, or Department of Corrections'
standards.”
However, CMA found 15 deficiencies in the mental health area of its Taylor CI survey.
Significant findings included “three to four month delays in obtaining psychiatric
evaluations for inmates demonstrating symptoms of serious mental illness, lack of
timely confinement evaluations of close management inmates, missing documentation
of observation of suicidal inmates, and lack of consistently documented responses to
psychological emergencies.”

CMA noted that the delays constituted “an unacceptable clinical practice,” and warned
that “several inmates on the waiting list were demonstrating symptoms of serious
mental illness requiring more expedient psychiatric/medication intervention.”
In a supplemental report to the agency, CMA stated, “The issue of delays in psychiatric
evaluations will require intervention by the Office of Health Services.”
CMA wrote that staff vacancies may have contributed to many of the documentation
deficiencies noted during the mental health survey. Staffing issues also surfaced during
our on-site interviews, when we observed that the contractor’s Health Services
Administrator and the Director of Nursing positions had been vacant for 7 weeks and 4
months, respectively. Contract S6149 does not specify staffing requirements, rendering
it difficult for the agency’s contract manager to require reasonable staffing levels.
During our review of consult logs for psychiatric evaluations, we found the delays at
Taylor continued, without effective intervention by OHS, until the end of 2005.
However, beginning January 2006, the logs show a significant improvement by the
contractor in providing more timely psychiatric evaluations. When asked what changes
occurred that led to the sudden improvement in 2006, the agency’s new Deputy
Director for Health Services Administration told us that a change in contract managers
late last year resulted in renewed focus on this contract and more aggressive
enforcement of required standards.
We recommend that OHS continue to monitor contractor performance and pursue
timely remedies to enforce compliance. We also recommend that future contracts
include a minimum staffing requirement, so that contract managers can proactively
identify pending service deficiencies and pursue corrective action.
Management’s Response: OHS will continue to aggressively monitor contractor
performance and pursue timely remedies to enforce compliance. OHS also concurs
with the recommendation that all future contracts include a minimum staffing
requirement and we will continue to work with the Department’s Legislative Affairs
Office regarding such language in future contracts.

FUNDS OWED BY THE CONTRACTOR TO THE AGENCY
Finding #2: The agency’s system for identifying and collecting health care costs
owed by the contractor is weak.
The contract permits the contractor to utilize the agency’s health care services at RMC
to care for inmates who are the contractor’s responsibility. Financial responsibility for
this service is allocated by the contract as follows:
Off-Site Services: Inmates transferred out of Taylor CI for specialty services, ambulatory surgery or
inpatient hospitalization at Reception and Medical Center will remain the Contractor’s financial
responsibility if:

1)

The Contractor is paid the per diem for said inmate;

2)

The Contractor shall be a participant in the decision making process regarding the Taylor CI inmate’s
on-going care after the initial referral to RMC and through RMC for services and will retain authority
and fiscal responsibility for further consultations, diagnostic procedures, or treatments. The
Contractor’s CHO and Utilization Management staff shall coordinate care, on-site at RMC or through
RMC as a staging facility, with the Department’s Chief Health Officer at RMC (if care is on-site at
RMC) and Utilization Management staff; and

3)

The inmate is returned to Taylor CI for continued care after admission is complete regardless of
where the inmate is counted (e.g., inmate moved from Taylor CI to Reception and Medical Center
count for inpatient hospitalization at Reception and Medical Center or Memorial Hospital
Jacksonville; see Section III., A., 6.) – however, the Contractor will receive per diem during that time
period as Contractor remains responsible for inmate’s health care costs.

We identified significant deficiencies in the agency’s methods used to identify and
collect health care costs which, under the above contract terms, should be paid by the
contractor. An August 2006 report of receivables owed by the contractor for agencyprovided health care services identified $579,631 in unpaid charges dating back to
2002.
Our review of the existing tracking and billing systems, which included site visits and
interviews with management at RMC Hospital and the Region II business and health
services offices, disclosed the following weaknesses:
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Medical costs for Taylor CI inmates who are transferred to RMC for medical
treatment may not always be identified as the contractor’s responsibility. As a
result, the agency may assume costs for which it should not be liable.
The system for approving medical procedures for Taylor CI inmates is a
complex, multi-tiered system. The contractor has in the past refused to pay for
services delivered to Taylor CI inmates because of agency lapses in obtaining
necessary approvals from the contractor’s utilization management office.
Methods for identifying, tracking and collecting medical costs owed by the
contractor are largely paper and email-based. This inhibits continuity and
reconciliation of the billing and collection processes.
The contract does not specify steps or remedies the agency may take to collect
fees from the contractor. Without remedies, such as withholding a portion of
receivables from future payments to the contractor, the contractor has little
incentive to expedite processing or payment of invoices it receives from the
agency.
When the contractor submits payment to the agency for inmate care at RMC,
the check often is not accompanied by documentation sufficient to identify which
inmates and procedures are covered by the payment.
Some of the charges may have been successfully disputed by the Contractor
but remained on the receivables report due to inaction, faulty documentation
and/or poor communication among the parties involved.

Section III A 3 of Contract S6149 appears to allow for the withholding of receivables
from subsequent payments to the contractor, stating:
Monthly adjustments will also be made for costs defined as payable by the Contractor which have
been paid by the Department or costs defined as payable by the Department which have been
paid by the Contractor. Such adjustments will be added to or deducted from the subsequent
monthly payment after reconciliation between the Department and the Contractor.

We recommend that OHS develop a comprehensive solution for approving, identifying,
tracking and collecting health care costs owed by the contractor. Future contracts
should include language that effectively addresses these issues.
Management’s Response: OHS too identified this as a major issue for our Office. We
have partnered with an outside vendor to conduct a comprehensive Needs Assessment
to determine our best course of actions concerning approving, identifying, tracking and
collecting health care costs owed by the contractor. It is our intent to implement an
automated system by where each of these billing and collection functions is realized.
OHS is aggressively discussing the current outstanding invoices with Prison Health
Services (PHS) Leadership. If agreement is not made prior to the end of the contract
period, the total due will be deducted from the final payment to PHS.

AGENCY PAYMENTS TO THE CONTRACTOR
Finding #3: Invoices are not being adjusted to reflect Taylor CI inmates housed
temporarily at RMC for medical treatment.
Our review of payments to the contractor indicated an absence of any adjustment for
PHS inmates temporarily assigned to RMC for medical treatment. Contract S6149
states that inmate counts shall be adjusted so that the contractor is paid per diem rates
for Taylor CI inmates while they are at RMC.
We found no evidence that the RMC Hospital Administrator provided documentation
needed to make these adjustments to the Regional Health Services Manager, as
required by the contract. While such adjustments would cost the agency a small
amount of money, they would document that PHS inmates at RMC are being properly
tracked according to contract terms, and would more readily support recovery of the
actual medical costs from the contractor.
We recommend that the RMC Hospital Administrator track Taylor inmates housed
temporarily at RMC and provide documentation to the Regional Health Services
Manager so that population counts can be adjusted as required by the contract.
Management’s Response: OHS fully intends to meet this requirement and will include
the capture and use of this information in our electronic billing and collection system
described above.