Report 2003-117 Highlights - April 2004

California Department of Corrections:

It Needs to Ensure That All Medical Service Contracts It Enters Are in the State's Best Interest and All Medical Claims It Pays Are Valid


Our review of the California Department of Corrections' (Corrections) processes to contract for health care services not currently available within its own facilities concludes that:

  • Corrections staff who negotiate contracts tend to rely on a 30-year-old state policy exemption that allows them to award contracts for most medical services without seeking competitive bids.
  • Corrections' negotiation practices are flawed. For example, some of the Health Care Services Division's and prisons' hospital contracts leave out information vital to ensuring that the State receives discounts those contracts specify.
  • Corrections is unable to justify awarding contracts for rates above its standards, violating this requirement of Corrections' contract manual.
  • Corrections sometimes exceeds the authorized contract amount and fails to obtain proper approvals before receiving nonemergency services.
  • Corrections' prisons are not adhering to its utilization management program, established to ensure inmates receive quality care at contained costs. Consequently, prisons are overpaying for some services, incurring unnecessary costs for the State.

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