Contract extended for firm suspected of overbilling


ANNAPOLIS -- State officials yesterday awarded a $17.7 million, six-month extension of a contract to provide medical care for prison inmates to a firm that legislative auditors believe has been overbilling the state.

The extension from July 1 to Dec. 31, for Correctional Medical Systems of St. Louis was approved unanimously by the three-member Board of Public Works at the request of the Department of Public Safety and Correctional Services, which said it needed the additional time to solicit bids for a new inmate health care contract.

A legislative audit released in January concluded that CMS had overcharged the state at least $1 million, and perhaps as much as $5 million, over the past three years.

The audit contended that between January 1989 and September 1991 the state paid twice for items such as eyeglasses and lab tests, paid for AIDS medication it was not obliged to provide, overpaid for hospital reimbursements due to an erroneous inflation figure, paid to have some inmates given physical examinations twice and in some cases was billed for a second physical examination that was never given.

In April, corrections officials notified CMS that the state was withholding $1,055,136 from payments owed the company as a result of the overbilling identified in the audit.

CMS, in turn, has filed a claim with the state seeking full payment, said spokesman Harry R. Belinger of CMS' Philadelphia office. CMS is the nation's largest health care provider for prisons. "Basically, we claim there was no overbilling," he said. "I think it is a disagreement over a very complex contract."

The audit was never mentioned at yesterday's board meeting.

The contract extension, however, revises the medical evaluation process for new inmates and deletes charges for additional examinations, resulting in an annual savings estimated at $900,000. It also reorganizes the inmate mental health program by consolidating services at the Patuxent Institution, a measure expected to save about $875,000 a year, the board was told.

The state currently houses about 22,000 inmates in its prisons and takes in about 100 more a month than it releases. The revised contract calls for CMS to provide health services to new housing units coming on line at the Maryland House of Correction in Jessup this coming fiscal year. It also calls for health services for inmates confined to home detention and adds a licensed practical nurse to CMS' infection control program.

The cost of providing health care in Maryland prisons is $1,777 per inmate for the current budget year, and will drop to $1,614 in the coming fiscal year, said Merry L. Coplin, deputy commissioner of corrections. That compares to about $3,200 a year spent for health care coverage for state employees.

State Comptroller Louis L. Goldstein, a board member, suggested that it might be more cost-effective for the state to include prison employees under the inmate health care program, but the idea appeared to generate little support.

In other action, the Board of Public Works:

* Approved a $4.2 million grant to construct nitrogen-removal facilities at the Sod Run Wastewater Treatment Plant in Harford County and a $423,500 grant for a pilot study for nitrogen removal at the Patapsco Wastewater Treatment Plant in Baltimore. Both grants are part of a state effort to reduce by 40 percent the flow of harmful nutrients into the Chesapeake Bay by 2000.

* Approved separate contracts worth $3.5 million to the Legal Aid Bureau and $711,886 to the Maryland Disability Law Center to represent physically or emotionally disabled children in court who have been neglected or abused.

* Approved a $438,530 contract to microfilm records at the Motor Vehicle Administration, a move that is expected to eliminate the need to keep 8 million paper documents in files.

* Agreed to spend $15,120 more a year on security at the George M. Taylor District Court/Multi-Service Center in Glen Burnie by having two armed guards replace two unarmed guards.

* Transferred nine acres from the state-owned Boys Village, a juvenile services facility in Prince George's County, to the state Military Department to build a new 150-man armory. Construction is to begin in January 1993, using $3.3 million from the Army National Guard and $500,000 from the state.

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