States Missing Out on Millions in Medicaid for Prisoners

Source: Christine Vestal,, June 25, 2013

Only a dozen states have taken advantage of a long-standing option to stick the federal government with at least half the cost of hospitalizations and nursing home stays of state prison inmates. The other states have left tens of millions of federal dollars on the table, either because they didn’t know about a federal rule dating to 1997 or they were unable to write the laws and administrative processes to take advantage of it….

…Why have so few states and localities taken advantage of the opportunity to collect millions in federal money to defray correctional health care costs? Like everything else connected with Medicaid, the rules are complicated and implementing the program requires cooperation among at least three separate agencies: corrections, Medicaid and local social services.

Another problem is that inmates don’t necessarily want to cooperate with prison personnel once they explain they are trying to defray some of their costs by drawing on federal funds….Another reason is that state corrections agencies didn’t find out about the ruling right away. The announcement first went from Washington to federal regional Medicaid officials who interpreted the ruling before sending it to Medicaid agencies in the states. Medicaid agencies then further analyzed the ruling before alerting the corrections agencies. Some corrections departments never got the memo.

Delaware, Louisiana and Oklahoma were the first states to use Medicaid for inmate hospitalization. As word of mouth traveled, a few more states enacted the needed laws and administrative procedures….As a result, most states likely will not be prepared to take advantage of it for the 2014 expansion, Strugar-Fritsch said. But once states understand how much federal money they’re leaving on the table, most will do what it takes to set up the needed systems, she predicted….