Arizona prison health care contract awarded to company that allegedly overcharged feds

·6 min read
The exterior of the Arizona State Prison in Florence.
The exterior of the Arizona State Prison in Florence.

The Arizona Department of Corrections announced Friday it awarded a prison health care contract to NaphCare, an Alabama based health care provider that settled with the United States Department of Justice over allegations of overcharging clients in 2021.

In a statement, the department said NaphCare was founded in 1989 and has provided health care services to the Pima County Sheriff’s Office since August 2021. NaphCare currently provides health care services to local, state and federal clients in 32 states, the statement said.

In that 2021 settlement, NaphCare agreed to pay nearly $700,000 after allegations the company had violated the False Claims Act by overcharging Federal Bureau of Prisons facilities.

“The United States alleged that NaphCare submitted inflated claims for evaluation and management services provided by several physicians at BOP’s Terre Haute, Indiana, facility between January 2014 and June 2020,” the Department of Justice said in a statement at the time of the settlement.

“Specifically, the United States alleged that, when certain physicians did not indicate the type of service performed on onsite visit sheets, NaphCare charged the government for higher-level services than were provided. The settlement also resolves allegations that, for two other physicians at BOP’s facility in Victorville, California, NaphCare similarly submitted claims that included higher-level services than those that were actually performed.”

Arizona Department of Corrections Director David Shinn was a former warden at the Victorville Federal Correctional Institution.

The Departments of Corrections and Administration did not immediately provide the contract Friday afternoon and details regarding cost and length of time were not available.

Centurion of Arizona, the current contractor for health care in Arizona state prisons, did not immediately return a request for comment.

Centurion has held the Arizona contract since 2019, after beating out the former correctional health care provider Corizon, which is now known as YesCare. Centurion’s contract was renewed in 2021 for 15 months, for a total cost of more than $216 million.

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Assistant Director of the Arizona Department of Corrections Medical Services Monitoring Bureau, Larry Gann participated in the procurement process.

Gann testified in Federal court in November 2021 that he worked for NaphCare as a director of nursing at a correctional facility in Nevada in 2006, and continued to work for the company in other capacities for a total of 9 years until 2015, eventually becoming vice president of the company.

“It was under a lot of speculation with the Department of Justice, had a high suicide rate, had a very poor recruitment and retention rate, and it was a nonprofitable facility for NaphCare at that time,” Gann testified. “In 18 months I was able to turn that around. We were fully staffed. We were actually producing money, and we had also turned around the mental health and the medical care that was being provided there.”

Gann said he then worked in the Birmingham office as chief nursing officer for NaphCare, and subsequently became the vice president of operations for the entire company.

“I was responsible for all of their client contracts throughout jails in the United States,” Gann said of NaphCare. “This particular company specifically sought out mega jails. That was their forte.”

In a statement announcing the award, the Department of Corrections said the contract would be finalized in the coming weeks. “NaphCare will provide physician and nursing services, as well as mental health and psychiatric care, to inmates in state custody at 10 Arizona State Prison Complexes,” the statement said.

“In considering our selection of a new healthcare partner, providing maximum savings to the Arizona taxpayer and providing the highest-quality care for the inmates in our custody were top priorities,” said Corrections Director David Shinn. “We believe NaphCare was the best-possible choice in these areas.”

Brad McLane, CEO of NaphCare, said the company was honored to be selected. “We look forward to a collaborative partnership aimed at improving patient outcomes and preparing residents for a safe and healthy return to the community,” he said.

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History of unconstitutional prison health care in Arizona

The state’s prior health care contractors — Centurion, Corizon, and their predecessor Wexford health — all have a long and sordid history providing substandard care to incarcerated people in Arizona, which resulted in a class action settlement between the prisoners and the state known as Jensen v Shinn.

After more than $2.5 million in fines were levied against the Department for failing to provide constitutional levels of health care in the prisons, a federal judge rescinded the settlement agreement and presided over a four-week trial in the fall of 2021 to determine how the state will be forced into compliance.

The trial featured testimony from a vice president at Centurion, who told the court that the state had refused to implement their suggestions to hire more health care staffing in the prisons. U.S. District Judge Roslyn Silver has yet to rule on the case.

Several whistleblowers have come forward in recent years accusing both Corizon and Centurion of improperly attempting to evade protocols established by the settlement agreement.

Corizon had a history of denying specialty care to incarcerated patients in order to save money, according to whistleblower Dr. Jan Watson, who worked for the company in 2015.

Watson’s allegations triggered an evidentiary hearing in federal court which resulted in a $1.4 million fine against the state.

In 2019, a nurse alleged that Corizon administrators directed him to falsify documents to deceive the state monitoring bureau and avoid potential fines.

Similarly, in 2021, a nurse who worked for Centurion came forward to claim administrators at the company directed her to file a false report, in an attempt to save the company $100,000 in court sanctions.

Corene Kendrick, deputy director of the ACLU national prison project, is an attorney representing prisoners in the Jensen v Shinn lawsuit. She expressed concern about Arizona hiring a fourth for-profit corporation to administer health care in the prisons since the system was privatized.

“In November and December 2021, attorneys for prisoners in the long-running Jensen v. Shinn case presented a devastating amount of evidence to the federal court in a three week trial showing that ADCRR has abdicated its legal responsibilities through a merry-go-round of for-profit correctional health care vendors,” Kendrick said. “We provided uncontroverted evidence that incarcerated people continue to suffer serious injuries and preventable deaths due to ADCRR and its vendors’ failures. Regardless of which corporation ADCRR has hired at any given time, state officials are still legally obligated to provide minimally adequate health care to people in its prisons.”

Kendrick said NaphCare’s track record raises concerns that “yet again Arizona taxpayers will be paying inflated prices for poor services and incarcerated people will be paying with their health or their lives.”

Have a news tip on Arizona prisons? Reach the reporter at jjenkins@arizonarepublic.com or at 812-243-5582. Follow him on Twitter @JimmyJenkins.

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This article originally appeared on Arizona Republic: Arizona awards contract to company that allegedly overcharged feds