ANNAPOLIS -- The firm that provides medical care for Maryland's 19,000 inmates overcharged the state at least $1 million, and perhaps as much as $5 million over the last three years, according to a legislative audit released yesterday.
In many cases between January 1989 and September 1991, the state paid twice for items such as eyeglasses and lab tests, resulting in overcharges of more than $620,000, the auditors concluded.
In another case, the state accepted an erroneous inflation figure to calculate increases in hospital reimbursements, resulting in overpayments totaling almost $240,000, the audit said. The state accepted an inflation factor of 106 percent, when the actual figure was 15.6 percent.
Auditors from the legislature's Department of Fiscal Services disputed more than $1 million paid to the medical firm over 36 months.
But Chief Auditor Anthony J. Verdecchia speculated that there may have been as much as $5 million more in overcharges that auditors did not have time to identify.
Officials of the St. Louis-based firm, Correctional Medical Services Inc., said that they disagreed with some of the auditors' conclusions but still were reviewing the report.
"I think there are some exceptions we take with the audit," said Robert M. Hooper, who supervises CMS'operations in Maryland.
"In some cases, if the documentation is there and we haven't corrected it, we'll make it right," Mr. Hooper added.
CMS, the largest prison health-care provider in the nation, received $74 million for its services in Maryland over the three-year period.
For the fiscal year ending last June 30, the state paid $31 million, the auditors said, and costs are expected to reach $42.8 million this year.
Corrections Commissioner Richard A. Lanham Sr. acknowledged that the division has had trouble monitoring the health-care contract.
Mr. Lanham said that his staff has to go through mountains of paperwork to keep track of payments to the firm. He said a plan to computerize medical bills will help the state save money.
"I know you have concerns. We have them, too," Mr. Lanham said.
The prison system also plans to work with the state Health Department to keep a lid on medical costs.
Auditors found that CMS doctors were giving some inmates two physical examinations, one at the Baltimore City Detention Center and one after they were transferred to a state prison.
The company continued to bill for the second physical even after it stopped the examinations last September, according to the auditors.
The state also made $135,446 in payments for AIDS medication for 18 months beginning in January 1989 that it was not obliged to make, according to the audit.
Some lawmakers briefed on the audit criticized state prison officials for being too generous with CMS, particularly by renegotiating the contract for various reasons.
"We're faced with an increase of 50 percent in inmate health care next year. These are astronomical numbers," said Del. Robert L. Flanagan, R-Howard. "The contractor is supposed to take some of the risk. What, do we feel sorry for him?"
Bishop L. Robinson, Maryland public safety secretary, said the state renegotiated the contract only when it was necessary.
For example, the state reworked it after a new round of tests showed a dramatic increase in the number of inmates infected with the virus that causes acquired immune deficiency syndrome.
State officials plan to break up the statewide health-care contract when it goes out to bid later this year.
For example, Mr. Robinson said, the state might bid the drug-supply contract separately from the basic health-care contract.
Auditors did not explore the quality of care provided to inmates.