Indiana sees big cost jump with new prison medical contract

Indiana could pay about 50% more a year for prison medical services with a new contractor picked by state officials.

The four-year contract with Centurion Health will pay an average of about $160 million a year to the company that submitted the most expensive of four vendor proposals, The (Fort Wayne) Journal Gazette reported. That compares to an annual $106 million cost the previous four years.

General medical services are included in the contract as well as behavioral health, addiction recovery and maternal child health for the nearly 24,000 inmates in the state prison system.

The departing contractor, Wexford of Indiana LLC, bid about $30 million less a year but Department of Correction spokeswoman Annie Goeller said price is only one factor considered.

While the contract award recommendation letter from the Indiana Department of Administration said Centurion had the lowest rating for cost among the four bids, it had the best score for management assessment/quality and beat out Wexford in the final overall scoring.

“Our goal is to ensure the care provided focuses on prevention and community accepted standards, which we believe will ultimately produce the best outcomes in the most cost-efficient and effective manner,” Goeller said.

Wexford received a three-year contract for $309 million in 2017 and was given a one-year, $116 million extension. Centurion’s contract, which is scheduled to be finalized by July 1, is for $643 million over four years.

Wexford spokeswoman Wendelyn Pekich said the company was “disappointed and surprised” over not winning the new contract.

Centurion, a subsidiary of Missouri-based Centene Corp., is facing a controversy in Tennessee, where state prison officials are going to rebid a $123 million contract the company received for behavioral health services after a lawsuit accused a state official of rigging the bidding process.

The size of Centurion’s Indiana contract apparently exceeds the funding provided by the Legislature in the new two-year state budget. The budget that takes effect in July combined the medical, food and educational services line items with a total of $160 million a year.

The Centurion contract alone would be $160 million a year when divided equally, although the earlier years of the contract are less. The medical services line item in the previous state budget was $97 million, with $36.3 million to cover food expenses and $11.4 million for education costs.

“The contract was awarded after the budget was approved, and adjustments to appropriations could not be made,” Goeller said. “We are in discussions with the State Budget Agency and are considering options.”