Report 2009-107.2 Recommendation 5 Responses

Report 2009-107.2: California Department of Corrections and Rehabilitation: Inmates Sentenced Under the Three Strikes Law and a Small Number of Inmates Receiving Specialty Health Care Represent Significant Costs (Release Date: May 2010)

Recommendation #5 To: Correctional Health Care Services, California

To determine whether the additional expansion of telemedicine is cost-effective within the California correctional system, Prison Health Care Services should identify and collect the data it needs to estimate the savings of additional telemedicine through an analysis of the cost of specialty care visits currently provided outside of the institution that could be replaced with telemedicine.

Annual Follow-Up Agency Response From August 2017

This recommendation has been fully implemented. CCHCS has implemented improved methodologies for determining cost avoidance for specialty telemedicine services. In October of 2016, CCHCS reported an estimated cost avoidance of $7,100,000 for fiscal year 13/14 and $8,900,000 for fiscal year 14/15. Upon further analysis and refinement of CCHCS Telemedicine Services data on cost avoidance of medical guarding and transportation cost for specialty services, the reported totals for fiscal year 13/14 and fiscal year 14/15 reflected a higher amount of savings for each fiscal year than previously reported. In addition, the medical guarding and transportation cost avoidance has steadily increased through fiscal year 15/16. The updated figures indicate a cost avoidance of $9,934,188.87 for fiscal year 13/14, $11,722, 315.34 for fiscal year 14/15, and $12,315,298.36 for fiscal year 15/16.

  • Completion Date: May 2017

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented


Annual Follow-Up Agency Response From October 2016

During fiscal year 2015-16, the specialty care telemedicine program resulted in estimated medical guarding and transportation cost avoidance of $12,300,000. The cost avoidance figures have increased from $8,900,000 in fiscal year 2014-15 and $7,100,000 in fiscal year 2013-14. This increase mirrors ongoing growth in telemedicine specialty encounters which have increased from 20,452 in fiscal year 2013-14 to 25,590 in fiscal year 2015-16.

Additional claims data analysis reveals no difference in specialty service reimbursement between telemedicine and non-telemedicine providers as they share the same fee schedule.

The implementation of the statewide electronic medical record is expected to be completed in fiscal year 2017-18. Successful implementation may result in undetermined additional medical guarding and transportation cost avoidance.

  • Estimated Completion Date: Fiscal Year 2017-18

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


Annual Follow-Up Agency Response From October 2015

CCHCS has partially implemented this recommendation with full implementation anticipated in fiscal year 2016/2017.

All 35 prisons have telemedicine capability and access to telemedicine specialists. For telemedical appropriate encounters, telemedicine services specialty claims data indicate that Telemedicine is utilized statewide at 64 percent in 2015 for an estimated medical guarding and transportation cost avoidance of $8,915,000 at fiscal year-end (June 2015). This is up from 48 percent in 2011, 55 percent in 2012, 59 percent in 2013, and 61 percent in 2014. This data indicates that those specialty services that could be accomplished via telemedicine (non-procedural office visits in specialties Telemedicine Services offers) have shown a steady increase in the last five years.

Achieving the remaining 36 percent is estimated to potentially save an additional $4,977,000 in medical guarding and transportation cost avoidance. The telemedicine specialty network continues to expand around the needs of the institutions; however, the expansion of the telemedicine specialty network in some areas (e.g., Pelican Bay State Prison) remain challenging for those surgical specialties and subspecialties that may eventually require a "hands on" visit, thus making a 100 percent capture rate more difficult to attain.

The ability to further analyze telemedicine specialty care data within CCHCS will be realized with the completed roll out of the statewide electronic medical record currently in deployment. Additionally, with the implementation of the electronic health record system, CCHCS will employ a complete care model that will allow for a higher level of care coordination and is expected to result in an increase in specialty referrals routed for telemedicine services versus offsite services. For this reason, CCHCS targets full completion of this recommendation by December 2016.

  • Estimated Completion Date: December 2016

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


Annual Follow-Up Agency Response From November 2013

CCHCS has implemented this recommendation to the extent possible. We are unable to assess further due to lack of staffing and data resources.

CCHCS has determined that Telemedicine appointments are billed at the same Medicare rates as in-person office visits and, therefore, do not reflect cost savings over traditional specialty service appointments. The primary goal of Telemedicine Services is to provide timely access to medically necessary care. In addition to increasing access to specialty care, CCHCS developed and implemented Primary Care Telemedicine in 2010. Primary Care Telemedicine utilizes civil-service CCHCS physicians to provide needed patient care to those remote locations that have had difficulty recruiting and/or retaining physicians and has improved access to primary care in mulitiple institutions statewide.

Telemedicine Services provide increased access to care, particularly in those remote locations where local medical facilities do not provide all the needed services to support the patient-inmate population. Expansion of Telemedicine Services shall primarily be based on efficacy and efficiency of patient care, as well as the needs of each individual institution, rather than cost effectiveness. Additionally, the use of telemedicine reduces transport of inmates into communities for healthcare through remote management, increasing public safety.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement


Annual Follow-Up Agency Response From September 2012

In the past, Telemedicine Services did not secure claims data or have technical expertise to perform cost-center analyses. Telemedicine Services is now accessing all specialty claims data on an ongoing basis. Telemedicine Services is developing a methodology to accurately identify specialty referrals seen off-site in providers' facilities that could appropriately be seen via telemedicine (e.g., eligible examination/consultation Current Procedural Terminology (CPT) codes without accompanying procedural CPTs for the same patient, provider, date and time). In addition, Telemedicine Services is investigating ways to measure cost elements for telemedicine that are difficult to estimate/quantify such as the value of increased community safety, improved patient access to specialty care, access-to-care litigation costs avoided, and others.

The future implementation of an enterprise electronic medical record system creates the opportunity to follow patient-inmates receiving telemedicine care to review health outcomes and subsequent utilization as compared with similar patient-inmates receiving care that is not delivered through telemedicine, to refine comparative cost analyses.

Telemedicine Services has gained access to specialties claims data and is starting analyses relating those data to telemedicine scheduling system data. Telemedicine Services is investigating cost analyses methods used by other government and non-governmental agencies that may be usable in trying to quantify some of these intangible variables to inform a cost comparison model. Systems to collect these sorts of data in a standardized way have not been identified or implemented to date. Once improved data and staff expertise to perform analyses are developed, more detailed comparisons will be done on an ongoing basis to inform policy decisions.

The insufficiency of cost center data and inadequate cost analysis methodology and technical analysis expertise have delayed implementing this recommendation. CCHCS is trying to address both of these deficiencies in order to improve efficacy and quality assessments for telemedicine services to inform policy decisions.

  • Estimated Completion Date: January 2013

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


All Recommendations in 2009-107.2

Agency responses received after June 2013 are posted verbatim.


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