A state rule change that made sure Medicaid benefits were cut off for county jail inmates came days after the legislature put responsibility for their hospital care squarely on the backs of county taxpayers.

Recent concern about the multimillion-dollar cost of inpatient care for inmates, especially in large counties, put a spotlight on events that took place during 2013, when Medicaid was run by Governor Pat McCrory, Department of Health and Human Services director Aldona Wos, and Medicaid director Carol Steckel. McCrory lost a close gubernatorial race last year, Wos stepped down in 2015, and Steckel left in September 2013 after serving in the post for just eight months.

During a Wake County Board of Commissioners meeting in March, Sheriff Donnie Harrelson told commissioners that the provisions of state law 2013-387 are costing the Wake sheriff’s office more than $1 million annually. Mecklenburg County is facing a similar situation, and all one hundred North Carolina counties are affected to varying degrees.

In an interview Thursday, Commissioner John Burns mentioned the cost of inmate care as a factor that could affect other county needs. “Our sheriff’s office is facing a significant challenge meeting these needs,” Burns said. “These inmates are our responsibility, but it’s very hard to predict the expenses.”

Medicaid, a huge ticket item for the state budget, gets one-third of its costs paid by the state and two-thirds by the federal government. Covering hospital costs for the county inmates who qualified for Medicaid—including pregnant women, people over sixty-five, and people with certain disabilities—wouldn’t have solved the counties’ problems entirely, but it would have helped.

“When the state wrote the rules for Medicaid, they choose not to cover county jail inmates,” says Elizabeth Scott, assistant division director of Wake County Social Services. “If something happens to them and they get sick and they’re admitted, then the county’s going to be responsible for that bill.”

A DHHS spokesman did not supply information requested Wednesday on the policy direction behind the rule change or about which level of department staff would have signed off on the policy.

Hospitals that once absorbed some inmate inpatient costs have been more reluctant to do so in recent years in a competitive health-care business environment. An aging population and inmates with high levels of diseases such as HIV and diabetes have increased the tab for treating the inmates, who are typically awaiting trial and have not been convicted of any crime.

Wake County commissioners compared the rising cost of inmate care to other situations in which the state shifted costs to counties, including a mandate to lower K–3 class-sizes in public schools beginning next school year. However, they agreed to pay $1.28 million toward the estimated $1.7 million cost of inmates’ off-site medical care in this year’s budget.

Commissioners did not tie the loss of Medicaid coverage for inmates to the bill’s passage, although they discussed both topics during the March 20 meeting. A look back at the timing of the state rule change and the passage of the law shows that the events that changed responsibility for inmate care happened within a short span.

On July 26, 2013, the legislature sent Senate Bill 321 to McCrory, which required counties to pay for the entirety of inmates’ hospital care. Previously, counties were on the hook, but often paid a small fraction of the total cost; hospitals would write off the rest as uncompensated indigent care.

On August 1 of that year, the state DHHS issued a regulation that said people entering county jails would have their coverage under Medicaid cut off. That meant that neither hospitals nor the Medicaid system that covers certain low-income people could offset the county’s cost of treating inmates. (A previous rule change had also banned Medicaid coverage for county inmates in 2011, so it’s not clear why DHHS issued the 2013 change on the heels of the passage of the new law.)

It took a while for hospitals and other health-care businesses to start demanding payment under the law.

In Wake, the first shoe to drop came in the form of a 2015 letter from Wake Neurology Associates. The Raleigh practice had treated an inmate, wanted to be paid, and cited the 2013 law. The inmate had been at the Wake County Detention Center before being sent to a hospital, where his room was guarded, meaning he was still incarcerated, the November 5, 2015, letter said.

“We anticipate payment for the above referenced claim,” said the letter from the company’s business office. (A call to the practice’s business office was not returned.)

State senators Thom Goolsby, Buck Newton, and Jim Davis sponsored the bill. Goolsby has left the legislature and works as a lobbyist, while Newton lost a 2016 race for attorney general. He is practicing law in Wilson.

“As I recall, the counties were VERY appreciative of the change,” Newton said in an email this week. “I am fairly certain whatever costs Wake and some others are experiencing now would be much worse had we not passed it.”

Newton said the bill was also designed to help small counties where the presence of one acutely ill inmate could decimate the entire health-care budget for the jail.

One reply on “Days After the NCGA Forced Counties to Pay More for Inmate Hospital Care, the DHHS Dropped Inmates from Medicaid Coverage”

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