Information on health care cost projections in the Department of Juvenile Justice / Georgia Dept. of Audits and Accounts, Performance Audit Operations

Special Examination y 07-16

October 2007

Why we did this review
The purpose of this examination was to compile information requested by the Senate Appropriations Committee on health care cost projections in the Department of Juvenile Justice (DJJ). The Committee specifically requested a reconciliation of DJJ's health care appropriations to expenditures for the past 10 years and a comparison of DJJ's cost projection methodology with that used by other states. The Committee also requested general comments on how accurately the Department of Juvenile Justice has projected expenses for health care.

Information on Health Care Cost Projections in the Department of Juvenile Justice
Background
State law requires that the Department of Juvenile Justice (DJJ) provide or obtain medical, dental, and mental health services as necessary to assure the reasonable health and safety of the youth in its custody. Because the youth sent to DJJ are generally considered to be physically healthy, the medical services primarily focus on examinations to identify problems, monitoring/treatment of chronic conditions such as asthma, and emergency care. Mental health services focus on identification, stabilization, and treatment.

Who we are

DJJ serves approximately 52,000 youth per year in its various facilities. The types of facilities and health care services provided are discussed below.

The Performance Audit Operations Division was established in 1971 to conduct in-depth reviews of state programs. The purpose of these reviews is to determine if programs are meeting their goals and objectives; provide measurements of program results and effectiveness; identify other means of meeting goals; evaluate the efficiency of resource allocation; and assess compliance with laws and regulations.
Website: www.audits.state.ga.us Phone: 404-657-5220 Fax: 404-656-7535

Regional Youth Detention Centers (RYDC) Secure detention for youth awaiting trial or placement elsewhere in the DJJ system is provided at 22 RYDC facilities (20 state-operated and 2 privately operated). Healthcare services for youth at RYDC facilities focus on screening, assessment, and stabilization because the youth are generally released within a short time frame.
Youth Development Campuses (YDC) The eight YDC facilities (6 state-operated and 2 privately operated) provide secure supervision and treatment for youth who have been committed to the custody of DJJ. Six of the facilities provide long-term rehabilitation for youth committed to DJJ custody and two YDCs are exclusively for youth placed in the custody of DJJ for 60 days or less. Screenings and care for chronic disease or acute illness are provided as needed, and youth may be referred to an external provider for specialty care. Mental health services provided at YDC facilities includes long-term, ongoing treatment.

Information on Health Care Cost Projections in the Department of Juvenile Justice

2

Community Non-Secure Commitment DJJ contracts with private vendors for the operation of 263 community residential programs, such as wilderness camps and group homes that provide detention for DJJ youth. Medical care and mental health care are the responsibility of the contracted provider; the Department pays the vendors a per diem fee that includes the cost of health care services.
Health care personnel in the RYDCs and YDCs report to the facility director. DJJ's Office of Health Services manages medical services and its Office of Behavioral Health manages mental and behavioral health services.

Examination Scope and Methodology
This is an informational report and therefore was not was conducted in accordance with generally accepted government auditing standards for performance audits. In conducting this examination, the team researched applicable laws, interviewed key personnel with the Department of Juvenile Justice, and surveyed personnel from the contiguous states regarding their methodology for projecting health care costs.
This report has been discussed with appropriate personnel representing the Department of Juvenile Justice. A draft copy was provided for their review and they were invited to provide a written response regarding the information provided in this report. The Department's response is included in this report as appropriate.

Information on Health Care Cost Projections in the Department of Juvenile Justice

3

Requested Information
A reconciliation of the General and Amended Appropriations for DJJ Health Care Services to actual expenditures for the past 10 years
DJJ's health care appropriations cannot be reconciled to its health care expenditures. Funds are not specifically appropriated to DJJ for health care services and its health care expenditures cannot be isolated. For fiscal year 2007, health care expenditures were included within four of DJJ's six appropriations categories: (1) Secure Commitment (YDCs), (2) Secure Detention (RYDCs), (3) Community Non-Secure Commitment, and (4) Administration. Health care expenditures for most of DJJ's YDCs and RYDCs are charged in several budget classes (regular operating, contracts, etc); however, 267 residential programs (including 2 YDCs and 2 RYDCs) are operated by contractors and medical costs cannot be isolated for these programs. An indication of DJJ's health care expenditures was provided by our 2005 Program Evaluation that estimated that the agency's health care expenditures for noncontracted facilities was about $40 million in fiscal year 2004.

A comparison to how other states make projections for Juvenile Justice health care costs
Georgia's Cost Projection Methodology DJJ does not prepare health care cost projections or specific budget requests for health care costs since funds are not specifically appropriated for its health care services. According to Department personnel, its overall budget requests are based on historic trends and requirements set by the Governor.
Cost Projection Methodologies Used By Other States
The examination team contacted the five contiguous states to obtain information on how they project health care costs for their Juvenile Justice health care services.
Alabama The Department of Youth Services (DYS) does not receive a specific appropriation for health care services. These services are included within the Department's appropriation for operating expenses. DYS develops separate budgets for each facility that go into its operating expenses, but health care costs are not isolated from other service costs. Overall budget requests are primarily based on the previous year's actual expenditures.
Florida DJJ does not receive a specific appropriation for health care services. Health care costs are included along with other operating expenses within the Department's Detention Center budget. Department personnel reported that most medical services are provided by contracted vendors and these contract costs are considered when budget requests are prepared.
North Carolina Health care services include several different budget line items (hospital services, medical services, prescription and nonprescription drug costs, etc) that each receive a specific appropriation. Health care cost projections (primarily based on the previous year's expenditures and an

Information on Health Care Cost Projections in the Department of Juvenile Justice

4

allowed inflationary percentage factor) are used to develop budget requests.
South Carolina The Department of Juvenile Justice receives a specific appropriation for juvenile health and safety. Health care costs are projected by analyzing historical costs and federal health care cost indexes. These projections are used to develop rate increases that are applied to the previous year's actual cost. Contracts and programs are also reviewed to identify any changes that may affect the budget.
Tennessee The Juvenile Justice section within the Department of Children's Services (DCS) does not receive a specific appropriation for health care. Each juvenile justice facility receives an appropriation for operational expenses, which includes health care services. According to DCS personnel, the health care component of a facility's costs is projected based on historical trends. DCS personnel also noted that it is difficult to isolate health care costs associated with juvenile offenders from health care costs incurred by other populations served by DCS.

General comments on how accurately DJJ projects health care expenses
As previously discussed, DJJ does not prepare health care cost projections or specific budget requests for health care costs since funds are not specifically appropriated for its health care services.

For additional information or for copies of this report call 404-657-5220 or see our website: http://www.audits.state.ga.us/internet/pao/rpt_main.html