Corizon loses Minnesota prison healthcare contract

Corizon, the country's largest private prison healthcare provider, lost a bid to renew its contract with the Minnesota Department of Corrections that it had held for the past 15 years.

Starting in January, Centurion Managed Care, part of St. Louis-based Centene Corp., will take over the two-year, $67.5 million contract.

The Minnesota contract had come under scrutiny in recent years after allegations of care mismanagement. In May, for instance, the state paid $400,000 to settle a lawsuit over the death of a 27-year-old inmate who had suffered at least seven seizures while in his prison cell in 2010.

But in a news release, DOC Commissioner Tom Roy praised Corizon's “excellent service to the state,” particularly in implementing managed-care reforms. He added, however, that Centurion will take the state “to the next level” with “new and innovative approaches,” particularly for behavioral healthcare.

“Corizon had a successful 16-year partnership with the Minnesota Department of Corrections, and we are proud of the quality patient care our talented team on the ground provided on a daily basis," a statement from Corizon said. "We lost this contract in the competitive bid process, and we wish Minnesota the best going forward.”

State and local governments are increasingly turning to private prison healthcare providers as a way to manage their budgets. Brentwood, Tenn.-based Corizon has been a major winner of that movement, amassing contracts in nearly 30 states and more than 400,000 prisoners under its care. Just this month, the company won a new contract with the Kansas Department of Corrections. The 18-month contract, which begins in January and covers about 10,000 inmates, has four two-year renewal options.

The privatization of correctional healthcare has its critics among prisoner advocacy groups who argue that the capitated contracts invite vendors to cut costs at the expense of quality of care.

Corizon, though, counters that the company scores highly on a number of outcome measures for conditions such as diabetes, HIV and mental illness. The company also downplays the multitude of lawsuits lodged against it, noting that upwards of 95% are self-represented and that the cases have been settled for an average of less than $50.

Earlier this month, Corizon named Dr. Woodrow Myers its new CEO. Like predecessor Rich Hallworth, Myers is a veteran of the insurance industry and previously served as executive vice president and chief medical officer of WellPoint.

Follow Beth Kutscher on Twitter: @MHbkutscher