Report suggests court strike 2011 law requiring private health care for prisoners

A special expert is recommending to a federal judge that she override a state law that requires the Department of Corrections to farm out health care for inmates to private companies.

In a 138-page report submitted Friday, Dr. Marc Stern detailed what he said are systemic problems in the state meeting its legal obligation to provide health services to inmates.

Some, he told U.S. District Court Judge Roslyn Silver, result directly from “severe underfunding” of health care, with a lack of proper staffing.

His report put current agency spending at about $195 million. Stern figures it would take an additional $73 million to bring spending up to what the state pays for similar services through its Medicaid program.

Those dollars, he said, should be used for the current private provider, Centurion, to increase staff and salaries.

But even assuming lawmakers and the governor would provide more cash, Stern said there’s a more important structural change that needs to be made: It should be state employees responsible for and providing the care, not some outside contractor.

“In my opinion, privatization of health services at Arizona Department of Corrections is an important barrier to compliance with performance measures and other risks to patient safety,” he wrote. More to the point, he recommended to Silver that the 2011 state law mandating privatization of prison health “be rescinded or overridden so that ADC can return to self-operating health care services.”

Stern’s report is the latest in a multi-year lawsuit against the state by the American Civil Liberties Union.

There was a settlement in 2014 with the state agreeing to meet certain standards for health care for inmates at prisons statewide. Since then, however, there have been charges that the agency has failed to comply.

Officials at the Department of Corrections, who had seen a version of the recommendations prior to release on Friday, did not take a position. That is because the issues raised go to decisions made not by the agency but by the governor and lawmakers.

“We are reviewing the report,” said Patrick Ptak, spokesman for Gov. Doug Ducey. He also said that the governor “is committed to improving inmate care.”

But former state Rep. Bob Robson, R-Chandler, suggested that the findings – and the recommendation to scrap the private contract for health care –  should come as no surprise.

“I wasn’t a fan of it,” said Robson who was in the Legislature in 2011 when his colleagues and then-Gov. Jan Brewer approved the mandate to contract out health services. And Robson said the ramifications of that decision go beyond the level of care being provided.

“The whole thing is they put it all on the director,” he said, referring to Charles Ryan who just retired, saying that Ryan was stuck implementing the decisions made by lawmakers.

“It lies square in the Legislature’s ballpark,” Robson said. “And it lies in the Legislature’s ballpark to fix it.”

Stern, in his report to Silver, said having the state and its employees be responsible for the health care of inmates makes sense from a variety of perspectives. Some of that, he said, is financial and goes to the issue of there not being enough money to do the job properly.

“Switching back from privatization to self-operation would, in effect, immediately reduce that spending gap by shifting funds ADC is currently spending on the non-value-added parts of contract expenses,” Stern wrote. That includes things like duplication of services and the profit margin for the vendor, a figure he estimated at $10 million a year.

He also pointed out that the contract with Centurion, which began in July, marks the third firm that has a deal with the state for the services. Aside from transition costs, Stern said these changeovers create their own problems, posing a high risk for errors “and therefore a risk of substantial harm to patients.”

Robson said one way for the state to save money would be greater use of telemedicine, having a system where prison staff and lower-level medical workers can be available on site for routine matters while essentially having doctors and specialists on call.

Stern agreed. But he said the current system of contracting out has made that impossible.

He said that Corizon tried to form relationships with individuals and organizations to provide more telemedicine services. But he said the doctors and others declined because they didn’t want to invest the resources in setting up a system to multiple prison units when the prison health care company with whom they made the arrangements might, due to the nature of the contracting process “might … not be around long enough to make the venture worthwhile.”

Stern, in his report, also said if there continues to be privatized health care that the terms of the contracts need to provide true incentives to the outside company to reduce vacancies.

Under the current system, he said, the vendor must reimburse the state when a position was vacant. But that, he said, is on a dollar-for-dollar basis.

“Reimbursement does little to motivate the vendor to keep positions filled because at the end of the transaction, the vendor is (financially) whole,” Stern wrote. But that still leaves the risks to patients from understaffing.

He said any penalties should be higher than the amount of money the contractor saves.