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DOC says county and out‑of‑state placements and medical costs rising; warns contract bid could spike costs 30–40%
Summary
Legislative analysts told the Joint Finance Preparations Committee that population increases and higher healthcare utilization are driving requests for nearly $6 million in supplemental funding and that a failed contract negotiation could lead to a 30–40% increase if the medical services bid goes to market.
Legislative analysts told the Joint Finance Preparations Committee on Feb. 4 that population changes and higher medical utilization drove sizable supplemental requests for county and out‑of‑state placements and for DOC’s medical contract.
Noah Peterson, budget and policy analyst, said the Department of Correction requested $5,957,200 for increased medical services utilization in FY2025 and that population shifts in county and out‑of‑state placements drove additional requests. He told the committee that the agency’s projections for placements changed from earlier estimates and the supplemental amount covers the difference between earlier projections and current population forecasts.
Peterson said the Department is negotiating with its current medical contractor. Under the agency’s assumption of a successful negotiation the projected increase to costs would be 10%; however, Peterson said if negotiations fail and the contract goes to competitive bid, the agency expects a 30% to 40% increase in the medical contract cost.
The analyst explained the county per‑diem structure used to reimburse counties: a lower per‑diem for stays of seven days or fewer and a higher per‑diem for stays longer than seven days, a statutory construct intended to encourage the state to pick up long‑term county placements sooner. Director Josh Tewalt confirmed that those county rates are set in statute and said the bifurcated rate is intended to avoid county jail backlogs.
Peterson and the director said the divisions that oversee county/out‑of‑state placement and medical services have no FTP and are funded entirely by operating appropriations; those divisions asked the committee to consider population‑driven adjustments and the medical contract risk when finalizing fiscal‑year funding. The governor recommended the supplemental requests as presented. No votes were held during the hearing; the Department agreed to provide updated projections when available.
