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United States Marshals Service's Prisoner Medical Care

Report No. 04-14
February 2004
Office of the Inspector General

Appendix X
Proposed National Managed Care Contract

The purpose of the proposed contract is to: 1) establish a nationwide integrated health care delivery system, including Preferred Provider Networks (PPN);43 and, 2) process and pay medical claims consistent with the Medicare and/or Medicaid payment standards required by 18 U.S.C. §4006 as amended. A managed health care system would include negotiated contracts with medical facilities and providers, claims processing and payment, utilization review and quality management.

Managed Care Network

The contractor would be required to establish a managed care network with community physicians, hospitals, and other ancillary services. These services provided to USMS prisoners would include dialysis, pharmacy discounts, optometry, ambulance, dental, skilled nursing facilities, and outpatient rehabilitation.

Also the contract would ensure that emergency services are available within each network site 24 hours a day, 7 days a week. Those services would be available at the hospitals or emergency care facilities that support the USMS's major use detention facilities.44

The contractor would be required to incorporate USMS Prisoner Health Care Standards, USMS administrative procedures, financial terms and rates, hospital affiliations, and USMS security requirements into all PPN provider agreements.

In some cases the PPN provider may choose to refuse to accept the provisions of Public Law 106-113 (Medicare or Medicaid). If the contractor determines that the particular provider specialty is essential the contractor should be required to have the provider agree to accepting rates approved by the USMS.

A national health care contract will also enable the USMS to obtain preferred pricing45 which will result in additional savings over and above the USMS allowed amount (Medicare or Medicaid).

Once the USMS allowed amount has been determined for each claim, the contractor will then review each claim to identify any additional savings that could be generated through preferred pricing. For example, a medical procedure is billed at $10,000, but the Medicare rate for this claim is $8,500. However, due to preferred pricing, the contractor is able to reduce the amount to be paid by the USMS to $5,000.

In that case, the preferred pricing amount ($5,000), not the billed amount or the Medicare rate, is determined to be the lesser amount and the revised USMS allowed amount. In the instance cited savings for the USMS above the Medicare amount would be $2,500, less a percentage paid to the contractor for the cost savings provided.

The OIMS believes that the national health care contract would reduce USMS prisoner medical expenses by obtaining preferred pricing rates below Medicare or Medicaid, pharmacy discounts and other reduced rates.

Centralized Medical Claims

The contractor would be required to establish an automated centralized medical claims system to process and re-price valid claims for medical care and supporting medical services provided to USMS prisoners in accordance with USMS allowed amounts.

The following is a listing of tasks and responsibilities that should be shared by the contractor, district office and the Office of Interagency Medical Services (OIMS) required to authorize, pay and manage prisoner outside medical claims.

  • Prior authorization involves the assessment of appropriateness of a proposed service. The basic elements of prior authorization include: eligibility verification, benefit interpretation, and medical necessity review for both inpatient and outpatient services.
  • The contractor shall provide toll-free phone support during regularly scheduled USMS working days to provide a means for districts and detention facilities to request and receive authorization for medical treatment for USMS prisoners.
  • The contractor would review for authorization all medical care with providers within their managed care networks and non-network providers with the exception of emergency services, inpatient stays and operative procedures, which will be reviewed by OIMS.
  • The district will be required to verify that the prisoner was in USMS custody during the period of medical service. In addition, the district office should also be responsible for forwarding medical referral to the appropriate decision making entity (OIMS/Contractor).
  • The contractor will identify and track medical claims that are disallowed according to the USMS prisoner health care standards and inform the OIMS, the district, and the provider.
  • The contractor will receive, control and distribute claims and automatically assign an internal control tracking number for each claim.
  • The contractor will match pre-authorization with the associated medical claim prior to payment, identifying, tracking and blocking duplicate, and invalid claims from being processed and tracking potential cases of fraud and abuse. The contractor will also track the allowed amount for medical services, e.g., type and number of claims re-priced at Medicare, Medicaid, local contract rates or Preferred Provider Network rates.
  • Contractor provides accounts payable and financial management reporting.
  • Contractor will track and report all cost savings generated by re-pricing and PPN discounts.
  • Contractor will provide program reports, special or routine, i.e., cost or disease trends, jail, provider, and individual patient reports. The reports will be requested either nationally, by USMS district, or as specified by OIMS.

Utilization Review Program

The Utilization Review (UR) program is designed to foster access to appropriate, quality and cost effective care for USMS prisoners. The review involves the assessment, evaluation, planning and implementation of health care services. The UR program provides a formal process that promotes objective, systematic monitoring and evaluation of appropriate resources throughout the continuum of care.

Concurrent review is an assessment of on-going medical services to determine continued medical necessity and appropriateness of care. Case management is a process for the management of chronic medical/behavioral health conditions that includes unexpected catastrophic occurrences, as well as proactive management of anticipated medical management situations. Discharge planning is the coordination of a patient's continued care needs when discharged from the inpatient setting.

The OIMS is responsible for examining the utilization of inpatient services to assess medical necessity and appropriateness. As part of the concurrent review function, the OIMS should monitor and track the length of stay for all inpatient admissions. The contractor's database and website would provide direct automated support to OIMS to enable them to carry out this function.

  1. Hospitals, clinics and doctors who have agreements with the nationwide health care delivery contractor to service USMS prisoners.
  2. Major use facilities require an average in-mate population of four or more prisoners in the custody of a USMS district office.
  3. Preferred pricing is a contract rate agreed by the preferred provider to be charged to patients covered by the USMS health care contractor.