BUREAU OF 

PRISONS

Better Planning and 

Evaluation Needed to 

Understand and 

Control Rising Inmate 

Health Care Costs

Report to Congressional Requesters

June 2017

GAO-17-379

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-379, a report to 

congressional requesters

June 2017

BUREAU OF PRISONS

Better Planning and Evaluation Needed to 

Understand and Control Rising Inmate Health Care 

Costs

What GAO Found

From fiscal years 2009 through 2016, the Bureau of Prisons (BOP) obligated 

more than $9 billion for the provision of inmate health care and several factors 

affected these costs. Obligations for health care rose from $978 million in fiscal 

year 2009 to $1.34 billion in fiscal year 2016, an increase of about 37 percent. 

On a per capita basis, and adjusting for inflation, health care obligations rose 

from $6,334 in fiscal year 2009 to $8,602 in fiscal year 2016, an increase of 

about 36 percent. BOP cited an aging inmate population, rising pharmaceutical 

prices, and increasing costs of outside medical services as factors that 

accounted for its overall costs. 

Bureau of Prisons (BOP) Institution Obligations for Inmate Health Care, Including 

Psychological Care, and Inflation Adjusted Per Capita Obligations from Fiscal 

Years 2009 through 2016 

Fiscal year

2009 2010 2011 2012 2013 2014 2015 2016

Total health care 

obligations 

(millions)

$978 $1,035 $1,081 $1,122 $1,200 $1,243 $1,299 $1,344

Per capita 

obligations (2016 

dollars) 

$6,334 $6,495 $6,485 $6,627 $6,998 $7,350 $7,958 $8,602

Source: GAO analysis of BOP data.  GAO-17-379

BOP lacks or does not analyze certain health care data necessary to understand 

and control its costs. For example, while BOP’s data can show how much BOP is 

spending overall on health care provided inside and outside an institution, BOP 

lacks utilization data, which is data that shows how much it is spending on 

individual inmate’s health care or how much it is expending on a particular health 

care service. BOP has identified potential solutions for gathering utilization data, 

but has not conducted a cost-effectiveness analysis of these solutions to identify 

the most effective solution. BOP also does not analyze health care spending

data, i.e., what its institutions are buying, from whom, and how much they spend. 

BOP has pursued some opportunities to control its health care spending through 

interagency collaboration and national contracts, but it has not conducted a 

spend analysis to better understand trends. Doing so would provide BOP with

better information to acquire goods and services more strategically.

BOP has initiatives aimed to control health care costs but could better assess 

effectiveness and apply a sound planning approach. Since 2009, BOP has 

implemented or planned a number of initiatives related to health care cost 

control, but has not evaluated their cost-effectiveness. Further, BOP has 

engaged in a strategic planning process to help control costs, but has not 

incorporated certain elements of a sound planning approach, such as developing 

a means to measure progress toward its objectives and identifying the resources 

and investments needed for its initiatives. By incorporating these elements, BOP

could enhance its planning and implementation efforts before expending 

resources, better positioning itself for success as it aims to control health care 

costs.

View GAO-17-379. For more information, 

contact Gretta L. Goodwin at (202) 512-8777 

or goodwing@gao.gov

Why GAO Did This Study

As of June 2017, BOP was responsible 

for the custody and care—including 

health care—of about 154,000 inmates 

housed in BOP institutions. Health care 

includes medical, dental, and 

psychological treatment. BOP provides 

most care inside its institutions, but 

transports inmates outside when 

circumstances warrant. GAO was 

asked to review health care costs at 

BOP institutions. 

This report addresses: (1) BOP’s costs 

to provide health care services and 

factors that affect costs; (2) the extent 

to which BOP has data to help control 

health care costs; and (3) the extent to 

which BOP has planned and 

implemented cost control efforts. 

GAO analyzed BOP health care

obligations data for fiscal years 2009 

through 2016, gathered information on 

BOP’s health care cost control 

initiatives through a data collection 

instrument, and reviewed BOP’s health 

care related strategic plans. GAO also

interviewed BOP officials and visited 

10 BOP institutions, selected in part, 

for total and per capita medical 

services costs.

What GAO Recommends

GAO is making five recommendations, 

including that BOP conduct a costeffectiveness analysis to identify the 

most effective method to collect health 

care utilization data; conduct a spend 

analysis of health care spending data;

evaluate cost control initiatives; and

enhance its planning efforts by 

incorporating elements of a sound 

planning approach. BOP concurred 

with the recommendations.
Page i GAO-17-379 BOP Health Care Costs

Letter 1

Background 6

BOP Obligated More Than $9 Billion for Inmate Health Care From 

Fiscal Years 2009 through 2016 and Several Factors Affected 

Costs 15

BOP Lacks or Does Not Analyze Certain Health Care Data 

Necessary to Understand and Control its Costs 31

BOP Has Initiatives Aimed to Control Health Care Costs but Has 

Not Assessed Their Effectiveness, Applied a Sound Planning 

Approach, or Documented its Analyses of Federal Medical 

Centers’ Missions 37

Conclusions 51

Recommendations for Executive Action 52

Agency Comments and Our Evaluation 53

Appendix I Objectives, Scope, and Methodology 54

Appendix II Bureau of Prisons (BOP) Institutions by Medical Care Level as of March 

2017 59

Appendix III Bureau of Prisons (BOP) Federal Medical Centers 64

Appendix IV GAO Contact and Staff Acknowledgments 67

Tables

Table 1: Description of the Medical and Mental Health Care Levels 

of Bureau of Prisons’ (BOP) Inmates 12

Table 2: Total Obligations for Inmate Health Care, Population, Per 

Capita Obligations, and Inflation Adjusted Per Capita 

Obligations in Bureau of Prisons (BOP) Institutions from 

Fiscal Years 2009 through 2016 16

Table 3: National Health Expenditure Increases and Per Capita 

Expenditures from Calendar Year 2009 through 2016 20

Contents
Page ii GAO-17-379 BOP Health Care Costs

Table 4: Percentage Aged 55 and Older, and Average Age of 

Inmates in Bureau of Prisons (BOP) Institutions from 

Fiscal Years 2009 through 2016 22

Table 5: Bureau of Prisons’ (BOP) Pharmaceutical Expenditures 

Adjusted for Population and Inflation from Fiscal Years 

2009 through 2016 23

Table 6: Bureau of Prisons’ (BOP) Pharmaceutical Expenditures 

for Hepatitis C, Cancer, HIV/AIDS, and Psychotropic 

Drugs and Percentage Change from Fiscal Years 2009 

through 2016 25

Table 7: Bureau of Prisons’ (BOP) Outside Medical Services 

Obligations from Fiscal Years 2009 through 2016 (in 

millions of dollars) 28

Table 8: Bureau of Prisons (BOP)-Identified Health Care Costs 

Savings Initiatives from Fiscal Years (FY) 2009 through 

February 2017 38

Table 9: Bureau of Prisons (BOP) Health Care Costs Savings 

Initiatives as Reported in Fiscal Year 2018 Congressional 

Budget Justification 40

Table 10: Bureau of Prisons (BOP) Health Care Cost Savings 

Initiatives with Cost Savings Estimates (Fiscal Year 2009 

through November 2016) 41

Table 11: Elements of Sound Planning Applicable to GAO’s 

Assessment of the Bureau of Prisons’ Planning Process 47

Figures

Figure 1: Bureau of Prisons’ (BOP) Regions, Number of 

Institutions per Region, and Locations of Federal Medical 

Centers 7

Figure 2: Select Images of Health Services Facilities and 

Equipment at Bureau of Prisons’ (BOP) Institutions 10

Figure 3: Bureau of Prisons’ (BOP) Total Health Care Obligations 

Components, and Total Medical Services Obligations 

Components for Fiscal Year 2016 18

Figure 4: Change in Composition of Bureau of Prisons’ (BOP) 

Expenditures for Hepatitis C, Cancer, HIV/AIDS, and 

Psychotropic Medication from Fiscal Years 2009 to 2016 27

Figure 5: Bureau of Prisons’ (BOP) Institutions and Number of 

Hospitals Within 20 Miles 30

Figure 6: Federal Medical Center Lexington Utilizes Specialized 

Telehealth Equipment to Conduct Specialty Clinics 45
Page iii GAO-17-379 BOP Health Care Costs

Figure 7: Some Bureau of Prisons (BOP) Institutions Utilize 

Pharmacy Robotics to Reduce the Use of Manual Labor 

to Dispense Medication 46

Figure 8: Selected Images of Health Services Facilities and 

Equipment at Bureau of Prisons’ (BOP) Federal Medical 

Centers 66
Page iv GAO-17-379 BOP Health Care Costs

Abbreviations

AASLD American Association for the Study of Liver Diseases

BEMR Bureau Electronic Medical Record 

BOP Bureau of Prisons

BOPMOP BOP Mail Order Pharmacy

CT Computerized tomography

DOJ Department of Justice

FCC Federal Correctional Complex

FCI Federal Correctional Institution

FDA Food and Drug Administration

FDC Federal Detention Center

FMC Federal Medical Center

FMIS Financial Management Information System

FPDS-NG Federal Procurement Data System-Next Generation

FSS Federal Supply Schedule

FTC Federal Transfer Center

HIV/AIDS Human immunodeficiency virus/acquired

 immunodeficiency syndrome

HSD Health Services Division

JMD Justice Management Division

MCC Metropolitan Correctional Center

MCFP Medical Center for Federal Prisoners

MRI Magnetic resonance imaging 

NHE National health expenditures

NHEA National Health Expenditure Accounts

OIG Office of Inspector General

OMB Office of Management and Budget

RDAP Residential Drug Abuse Program

SOC Sub-Object Classification

USP U.S. Penitentiary 

VA Department of Veterans Affairs

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-17-379 BOP Health Care Costs

441 G St. N.W.

Washington, DC 20548

June 29, 2017

The Honorable Charles E. Grassley

Chairman

Committee on the Judiciary

United States Senate

The Honorable Claire McCaskill

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The mission of the Department of Justice’s (DOJ) Federal Bureau of 

Prisons (BOP) is to protect society by confining offenders in facilities that 

are safe, humane, cost-efficient, and appropriately secure. As part of its 

duties, BOP is responsible for delivering adequate health care, including 

medical, dental, and mental health care, in a manner consistent with 

accepted community standards for a correctional environment.1 BOP 

reported obligating almost $1.2 billion of its $6.9 billion appropriation to 

the medical and dental care of inmates for fiscal year 2016.2 These costs 

include various categories, such as medical, dental, and psychiatric staff 

salaries within BOP institutions; pharmaceuticals and medical supplies; 

and expenses associated with inmates receiving care at a local health 

care provider, such as a hospital, when BOP cannot provide the 

necessary care in-house.3 In addition, for fiscal year 2016, BOP reported 

obligating more than $70 million to provide mental health treatment to 

inmates, including psychological treatment such as group and individual 

psychotherapy sessions, psychology treatment programs, and sex 

 1

BOP’s Health Services Administration Program Statement states that BOP is to deliver 

medically necessary health care to inmates in accordance with proven standards of care. 

See BOP Program Statement 6010.05, Health Services Administration, June 26, 2014. 

2

An obligation is a definite commitment that creates a legal liability of the government for 

the payment of goods and services received. BOP combines medical, dental, and 

psychiatric care in its reporting of medical services obligations. Mental health care is 

reported separately in its Psychology Services obligations. The $6.9 billion appropriation is 

for the Salaries and Expenses portion of BOP’s fiscal year 2016 annual appropriation and 

does not include the separate Buildings and Facilities appropriation for fiscal year 2016. 

3

BOP distinguishes between medical services and psychology services, which are 

accounted for separately in BOP’s budget. Psychiatric staff salaries are included in 

medical services obligations as psychiatrists have the authority to prescribe medication. 

Letter
Page 2 GAO-17-379 BOP Health Care Costs

offender treatment programs.4 BOP’s fiscal year 2017 Congressional 

Budget Justification shows medical services and psychological services 

funding increasing annually, and BOP expects costs to continue to 

increase in the future, driven by, among other things, rising costs across 

the health care industry, including pharmaceutical costs, and the 

expanded needs of the aging inmate population.

Multiple U.S. courts over the years have determined that inmates have a 

constitutional right to adequate medical and mental health care.5 By 

statute, BOP is required to provide for suitable housing and the 

safekeeping, care, and subsistence of all persons charged with or 

convicted of offenses against the United States.6 In light of the 

importance of providing health care to BOP inmates, and the rising costs 

associated with providing care, you asked us for information on BOP’s 

costs for inmate health care, factors that are impacting costs, and what 

initiatives BOP has undertaken to address rising costs. This report 

addresses the following questions: (1) How much did BOP obligate for 

inmate health care from fiscal years 2009 through 2016 and what factors 

affect BOP’s costs? (2) To what extent does BOP have data available to 

understand and help control its health care costs? (3) What initiatives has 

BOP identified and implemented to help control health care costs and 

how effectively has BOP planned its health care cost control efforts?

To address these questions, we interviewed BOP officials knowledgeable 

about health care costs and cost control efforts from several divisions and 

offices, as well as officials at BOP’s six regional offices. We conducted 

site visits to 10 BOP institutions, and selected these institutions based, in 

part, on factors that both BOP and existing research indicated could be 

affecting costs, such as inmate characteristics and geography, as well as 

other factors that allowed for variation in our sample (see app. I for more 

 4

See our prior work on BOP inmate mental health care. GAO, Bureau of Prisons: Timelier 

Reviews, Plans for Evaluations, and Updated Policies Could Improve Inmate Mental 

Health Services Oversight, GAO-13-1 (Washington, D.C.: July 17, 2013).

5

For example, the United States Supreme Court held in the case of Brown v. Plata, 563 

U.S. 493, 497 (2011), that adequate medical and mental health care must meet minimum 

constitutional requirements and meet prisoners’ basic health needs. Similarly, the United 

States Supreme Court concluded in the case of Estelle v. Gamble, 429 U.S. 97, 104 

(1976), that deliberate indifference to the serious medical needs of prisoners by prison 

personnel constitutes the unnecessary and wanton infliction of pain prohibited by the 

Eighth Amendment. 

6

18 U.S.C. § 4042(a)(2).
Page 3 GAO-17-379 BOP Health Care Costs

details on our selection criteria). In addition, we reviewed key documents, 

such as BOP’s Congressional Budget Justifications for fiscal years 2009 

through 2018.

To examine how much BOP has obligated for inmate health services over 

the past 8 fiscal years and the factors that affect BOP’s costs, we 

reviewed key documents, such as BOP’s Annual Financial Statements, 

and the Department of Justice’s Financial Management Information 

System Sub-Object Classification (SOC) Code Guide.7 We also analyzed 

BOP obligation data from fiscal years 2009 through 2016 on medical 

services, psychology services, drug and sex offender treatment 

programs, and medical staff training. We included 8 years of obligations 

data in order to observe trends over time in health care costs. We 

included all categories of care that are considered essential to treating 

health, including mental health and substance use disorder treatment. To 

determine the per capita obligations, we divided the total obligation by the 

inmate population at the end of each fiscal year. We adjusted these data 

to reflect health care inflation. To better understand the composition of 

medical services obligations, we analyzed obligations by SOC code. To 

understand the changes in pharmaceutical expenditures over the period 

we reviewed, as well as what illnesses were impacting those obligations, 

we analyzed BOP’s list of top 50 medications for fiscal years 2009 

through 2016. We compared these medications to the U.S. National 

Library of Medicine’s MedlinePlus list of drugs and supplements, in order 

to determine their uses.8 To assess the reliability of BOP’s obligations 

and expenditures data, we performed electronic testing for obvious errors 

in accuracy and completeness, and interviewed agency officials 

knowledgeable about BOP’s budget to determine the processes in place 

to ensure the integrity of the data. We determined that the data were 

sufficiently reliable for the purposes of this report. Finally, since 

geographic location may impact the provision or cost of inmate health 

 7

Federal agencies use SOC Code Guides to standardize budgetary information. SOC 

codes define the nature of services or articles obligated, and include codes for items such 

as personnel compensation, rent, supplies, and contractual services.

8

MedlinePlus, produced by the National Library of Medicine, is the National Institutes of 

Health’s website that contains extensive information on prescription and nonprescription 

drugs, in addition to information on over 1,000 diseases and conditions. 
Page 4 GAO-17-379 BOP Health Care Costs

care, we analyzed BOP institutions’ proximity to hospitals.9 To do this, we 

used geographic information services software to map the addresses of 

all BOP institutions, and identify how many hospitals were within a 20 

mile radius of the institution.

To examine the extent to which BOP has data available to understand 

and help control its health care costs, the initiatives BOP has identified 

and implemented to help control health care costs, and how effectively 

BOP has planned and implemented these initiatives, we reviewed 

relevant BOP program statements. We also conducted interviews with 

BOP officials knowledgeable about cost control initiatives. Further, we 

reviewed Office of Management and Budget (OMB) guidance on costeffectiveness analysis and BOP policies to assess the extent to which 

BOP analyzed its efforts to gather data. To determine the extent of 

available data on BOP health care spending, we searched the Federal 

Procurement Data System-Next Generation (FPDS-NG) for BOP contract 

actions for fiscal years 2009 through 2015 and obtained pharmaceutical 

obligations data from BOP for that same period.10 Based on these steps, 

we determined the data were sufficiently reliable for the purposes of our 

reporting objective.

To determine how well BOP’s health care cost control planning 

mechanisms work, we obtained and reviewed selected portions of the 

annual BOP-wide strategic plans for 2009 through 2015, BOP’s Health 

Services Division (HSD) Governing Board Meeting Minutes through 2015, 

and the HSD Strategic Plan for 2015 through 2019. To identify BOP’s 

health care cost control efforts, their status of implementation, and the 

extent to which BOP had conducted cost estimates for each, we 

interviewed BOP officials and reviewed documents they provided, as well 

as reviewed relevant GAO reports and DOJ Office of Inspector General 

 9

For the purposes of our analysis, a hospital is defined as a building or building complex 

providing general medical or surgical inpatient care. It includes general hospitals, specialty 

hospitals (such as cancer, maternity, substance abuse, psychiatric, and rehabilitation 

hospitals). It does not include psychiatric or behavioral facilities that are not hospitals, 

long-term care medical centers or nursing homes, walk-in centers or outpatient clinics, 

imaging centers, medical doctors’ offices, and rehabilitation centers.

10FPDS-NG is a single source for U.S. government-wide procurement data. Managed by 

the General Services Administration, it is the central repository of information on federal 

contracting. The system contains detailed information on contract actions over $3,500. 
Page 5 GAO-17-379 BOP Health Care Costs

(OIG) reports.11 We summarized this information into a data collection 

instrument for verification by BOP officials and requested additional data 

and supporting documentation for each initiative. We also interviewed 

officials from DOJ OIG and DOJ’s Justice Management Division12 to 

discuss prior DOJ report recommendations on BOP health care costs. We 

interviewed officials at the 10 institutions we visited, observed health care 

programs and cost control efforts, and obtained documents relating to the 

costs and cost savings of regional and institutional initiatives to control 

health care costs. Appendix I contains a more detailed discussion of our 

objectives, scope, and methodology.

We conducted this performance audit from February 2016 to June 2017 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 11See for example: GAO, Bureau of Prisons: Information on Efforts and Potential Options 

to Save Costs, GAO-14-821 (Washington, D.C.: Sept. 30, 2014). DOJ OIG, The Federal 

Bureau of Prison’s Efforts to Manage Inmate Health Care, Audit Report 08-08 

(Washington, D.C.: Feb. 2008); and Follow-Up Audit of the Federal Bureau of Prisons’

Efforts to Manage Inmate Health Care, Audit Report 10-30 (Washington, D.C.: July 2010).

12DOJ’s Justice Management Division (JMD) provides DOJ with advice on policy for 

budget and financial management, program evaluation, auditing, personnel management 

and training, procurement, information processing and telecommunications, security, and 

for all matters pertaining to organization, management, and administration. In 2012, JMD 

budget staff issued an assessment of BOP’s method for procuring medical services and 

potential ways to reduce costs, including cost savings opportunities. 
Page 6 GAO-17-379 BOP Health Care Costs

As of June 2017, BOP was responsible for approximately 188,000 

inmates in federal custody. About 81 percent, or approximately 154,000 

inmates, are housed in BOP-operated institutions.13 There are 122 BOPoperated institutions, with some of the institutions clustered in a Federal 

Correctional Complex (FCC).14 BOP designates 7 of its 122 institutions as 

medical referral centers, generally called a Federal Medical Center 

(FMC), to provide advanced care for inmates with more serious chronic or 

acute medical conditions.15 Each BOP institution (or complex) is located 

within one of six regions, with an office overseeing the region (see fig. 1). 

BOP also has a Central Office, located in Washington, D.C., that 

oversees the six regions.

 13BOP also has inmates in privately run facilities and other types of facilities such as 

Residential Reentry Centers (RRC). We excluded the privately managed facilities from our 

review as BOP does not track the specific costs for health care provided to inmates 

housed therein. Rather, BOP uses fixed-price contracts that only require the contractors to 

provide BOP with their costs on a per inmate per day basis. We also excluded RRCs from 

our scope as, according to BOP officials, BOP does not cover health care expenses for all 

inmates housed in RRCs as some inmates receive care through employer-provided 

insurance or other means. 

14At FCCs, institutions with different missions (for example, medical/mental health, 

pretrial, and holdover) and security levels are located in proximity to one another. FCCs 

could be made up of two institutions, or up to four institutions. In total, there are 15 

complexes.

15Six of the medical referral centers are named Federal Medical Center (FMC) and one is 

named United States Medical Center for Federal Prisoners. According to BOP, there is no 

salient difference in the medical mission for the seven institutions and therefore all can be 

referred to as FMCs. 

Background
Page 7 GAO-17-379 BOP Health Care Costs

Figure 1: Bureau of Prisons’ (BOP) Regions, Number of Institutions per Region, and Locations of Federal Medical Centers

Note: Six of the medical referral centers are named Federal Medical Center (FMC) and one is named 

United States Medical Center for Federal Prisoners (MCFP). According to BOP, there is no salient 

difference in the medical mission for the seven institutions and therefore all can be referred to as 

FMCs.
Page 8 GAO-17-379 BOP Health Care Costs

BOP is responsible for providing medically necessary medical, dental, 

and mental health services in a manner consistent with standards of care 

for the non-prison community.16 BOP’s Health Services Division oversees 

the provision of medical, dental, and psychiatric services. BOP’s 

Psychology Services Branch, under its Reentry Services Division, is 

responsible for providing psychology services, including psychology 

treatment programs and drug abuse treatment programs.17

BOP provides most medical and dental care inside its institutions (inside 

care), usually with BOP-employed medical staff. The level and kinds of 

services provided depends upon the care level of the institution, as 

described below. Each BOP institution operates a health services unit. 

Most units have examination rooms, treatment rooms, dental clinics, 

radiology and laboratory areas, a pharmacy, and administrative offices, 

as can be seen in figure 2 below. BOP staffs these health units with 

medical professionals including physicians, dentists, nurses, pharmacists, 

and mid-level practitioners.18 Inside care services include:

• Health screening upon inmates’ admission to the prison, 

comprehensive documentation of inmates’ medical history, and 

physical exams to identify underlying infectious, chronic, and 

behavioral health needs.

• Sick call triage and episodic visits to assess, diagnose, and treat 

short-term health problems.

• Preventative health visits to screen for underlying chronic conditions 

and immunize against transmission of preventable infectious 

diseases.

 16BOP distinguishes between medically necessary acute or emergent care, and medically 

necessary non-emergent care. Medically necessary acute or emergent care is associated 

with medical conditions that without care would cause rapid deterioration of health, 

significant irreversible loss of function, or may be life threatening. Medically necessary 

non-emergent care is associated with conditions that are not immediately life-threatening 

but which without care could lead to significant risk of deterioration leading to premature 

death, reduction in the possibility of repair later without present treatment, and significant 

pain or discomfort that impacts daily living. See: BOP, Program Statement: Patient Care, 

Number: 6031.04 (June 3, 2014). 

17See GAO-13-1.

18BOP also contracts with medical providers to offer clinics and specialty services inside 

the institutions to complement the primary care offered by BOP staff. See: BOP, Program 

Statement: Patient Care, Number: 6031.04 (June 3, 2014).

Provision of Health Care
Page 9 GAO-17-379 BOP Health Care Costs

• Chronic care clinics to manage long-term diseases, such as diabetes, 

asthma, and congestive heart failure.

• Rehabilitative care to regain or maintain optimal physical and mental 

health function.

• Oral health care to assess, diagnose, treat, and prevent dental 

cavities and oral diseases.
Page 10 GAO-17-379 BOP Health Care Costs

Figure 2: Select Images of Health Services Facilities and Equipment at Bureau of Prisons’ (BOP) Institutions

Note: These images represent various health care facilities at BOP institutions. They are not 

necessarily reflective of the facilities at all BOP institutions, which may differ based on medical care 

level and available resources.
Page 11 GAO-17-379 BOP Health Care Costs

When BOP is unable to provide a medical service to an inmate, BOP 

transports the inmate to a medical facility or provider in the community 

(outside care). Generally, each BOP institution has its own outside care 

contract that sets payment rates for services provided with the contracted 

community medical centers and providers. Further, apart from some 

national BOP contracts that standardize goods and services,

19 each BOP 

institution acquires its own health care goods and services. Institutionacquired goods and services vary, and include contracted health care 

professionals, medical imaging services, such as ultrasound and 

magnetic resonance imaging, medical equipment, and medical waste 

disposal.20

BOP Institution Care Levels

Beginning the process in 2004, BOP instituted a medical and mental 

health care level system for its inmates and its institutions. BOP 

designates inmates as a care level 1, 2, 3, or 4, depending on the level of 

medical and mental health services required. Inmates designated as a 

care level 1 are generally considered healthy, and the intensity of care 

required increases along with care level (see table 1).

 19According to BOP, examples of national contracts include the purchase of X-ray 

equipment, pharmaceuticals, and medical/surgical supplies.

20BOP relies on contracting for specialty imaging, which could include a computerized 

tomography (CT) scan or magnetic resonance imaging (MRI). For basic radiographic 

imaging, over 95 percent of BOP institutions use BOP’s teleradiology program. 
Page 12 GAO-17-379 BOP Health Care Costs

Table 1: Description of the Medical and Mental Health Care Levels of Bureau of Prisons’ (BOP) Inmates

Care level 

designation

Description Percentage of inmates 

at each inmate medical 

care level (as of March 

2017)a

Percentage of inmates 

at each inmate mental 

care level (as of March 

2017)a

Care level 1 Medical care level 1 inmates are generally healthy, 

under 70 years of age, and may have some limited 

medical needs requiring clinician evaluation and 

monitoring such as mild asthma or diet-controlled 

diabetes. Mental care level 1 inmates show no 

significant level of functional impairment associated 

with mental illness and demonstrate no need for 

regular mental health interventions.

69 95

Care level 2 Medical care level 2 inmates are those with stable 

conditions, requiring at least quarterly clinician 

evaluation, such as medication-controlled diabetes or 

emphysema. Mental care level 2 inmates are those 

requiring routine outpatient mental health care on an 

ongoing basis and/or need brief, crisis-oriented mental 

health care of significant intensity.

25 3

Care level 3 Medical care level 3 inmates are fragile outpatients 

who require frequent clinical contacts, and/or who 

may require some assistance with activities of daily 

living. Examples include patients with advanced 

human immunodeficiency virus/acquired 

immunodeficiency syndrome (HIV/AIDS) disease or 

end-stage liver disease. Mental care level 3 inmates 

are those that require enhanced outpatient mental 

health care, such as weekly interventions, or 

placement in a residential Psychology Treatment 

Program.b

2 <1

Care level 4 Medical care level 4 inmates are severely impaired, 

and may require daily nursing care, such as patients 

with cancer in active treatment, dialysis, quadriplegia, 

and those undergoing or recovering from major 

surgery. Mental care level 4 inmates are those 

requiring acute care in a psychiatric hospital.

1 <1 

Source: BOP.  GAO-17-379

a

Percentage does not equal 100 percent as some inmates were still under an initial care level 

designation—known as screen level—which is made by BOP’s Designation and Sentence

Computation Center before arrival at a BOP institution. Upon arrival at a BOP institution, BOP staff 

determines the care level.

b

Psychology Treatment Programs typically involve standard protocols that all apply to all participants, 

including residential and non-residential drug treatment programs, sex offender management 

programs, and other specialized mental health treatment programs.
Page 13 GAO-17-379 BOP Health Care Costs

BOP also classifies its institutions as a care level 1, 2, 3, or 4, depending 

on the level of medical and mental health services provided (see app. II 

for a complete list of institutions with their associated medical care levels). 

As of 2017, BOP has seven care level 4 institutions—FMCs—that offer 

advanced care, such as dialysis, oncology treatment, limited surgery 

services, prosthetics, inpatient and forensic mental health, dementia care, 

and end-of-life care (see app. III for more information on the FMCs).21

BOP Electronic Medical Records System

BOP uses an electronic medical records system—the Bureau Electronic 

Medical Record (BEMR) system—to keep track of an inmate’s medical, 

social, and psychological history. It includes information on an inmate’s 

clinical encounters (for both inside care and outside care) and medication, 

among other things.22 According to BOP officials, BEMR differs from 

typical electronic medical records systems used outside of prison 

systems, which generally tie a diagnostic code to a reimbursement rate.23

BOP’s system differs because it was designed as a record of clinical care, 

not a record of managing reimbursements through private insurance 

companies, Medicare, or Medicaid.

Health Care Planning and Oversight

BOP plans and oversees its provision of health care through various 

mechanisms; the following are four major mechanisms that effect health 

care cost control:

• HSD Executive Staff: The HSD Assistant Director, Senior Deputy 

Assistant Director, and Medical Director oversee the programs, 

operations, and delivery of health care for BOP institutions. They 

direct the HSD Branch Chiefs and Chief Professional Officers charged 

with managing national health programs and services. According to 

 21Forensic mental health is the psychological or psychiatric evaluation of pretrial and posttrial inmates pursuant to 18 U.S.C. §§ 4241 – 4247.

22An electronic medical records system is defined as an electronic record of health-related 

information on an individual that can be created, gathered, managed, and consulted by 

authorized clinicians and staff within one health care organization.

23In the United States, every claim submitted by health care providers to health care 

payers includes International Classification of Diseases (ICD) codes. ICD codes are the 

standard code set used in the United States documenting medical diagnoses and inpatient 

procedures.
Page 14 GAO-17-379 BOP Health Care Costs

BOP officials, HSD Executive Staff are the most integral planning 

mechanism and the final decision-makers on any HSD plan.

• HSD Governing Board: BOP established this multi-divisional and 

multi-regional governance structure in 2005 to provide executive level 

strategic planning and performance evaluation of health services 

management and operations. Generally, the Board is responsible for 

overseeing the planning, organization, delivery, and evaluation of 

health services provided within BOP institutions by BOP staff and 

contractors. The Board is also tasked with working with HSD to 

ensure that medically necessary health care is delivered in the most 

cost-efficient way.

• The BOP-Wide Annual Strategic Plan: BOP develops an annual 

strategic plan to help fulfill its mission and achieve strategic goals. 

BOP highlights cost-efficiency in several parts of its annual strategic 

plan, including its mission and vision statements. BOP’s mission 

statement states that BOP institutions will be cost efficient and BOP’s 

vision statement states that it aims to be the best value provider of 

efficient correctional services and programs. BOP developed strategic 

objectives, including a strategic objective focused on health care 

efficiencies, which BOP explains as “maximizing health care 

resources as a cost-containment strategy by applying evidence-based 

business practices and measuring performance through the use of 

appropriate industry-wide metrics.”

• The HSD Integrated Strategic Plan for 2015 through 2019: HSD also 

has an internal five-year strategic plan for the division that focuses on 

HSD initiatives that are intended to bring large-scale change to BOP’s 

health care system. HSD established four overarching focus areas in 

the plan: (1) administration and program management, (2) health 

services staffing and management, (3) financial management, and (4) 

risk management.24 The HSD integrated strategic plan includes a 

description, implementation strategies, and expected outcomes for all 

 24The corresponding goal for each overarching focus area is as follows—(1) 

Administration and Program Management: To provide effective oversight of Health 

Services programs, while leveraging the Agency’s human capital and technology 

resources to maximize operational efficiencies and innovate best practices; (2) Health 

Services Staffing and Management: To build and hire a fully capable and committed 

workforce by providing meaningful challenges and continuous career development; (3) 

Financial Management: To effectively manage the Health Services budget through an 

ongoing analysis of staffing, program efficiencies, and utilization of services to identify 

opportunities for cost containment presently and in the years ahead; and (4) Risk 

Management: To identify and mitigate Health Services system vulnerabilities that may 

jeopardize patient or worker safety.
Page 15 GAO-17-379 BOP Health Care Costs

four focus areas for each of the 17 HSD branches and sections listed

in the plan.

During the 8-year period starting in fiscal year 2009 and ending in fiscal 

year 2016, BOP obligated more than $9 billion for the provision of inmate 

health care. According to BOP data, annual obligations increased from a 

total of almost $978 million in fiscal year 2009 to more than $1.3 billion in 

fiscal year 2016, an increase of about 37 percent overall during this 

period (see table 2). More specifically, annual obligations for medical 

services25 increased by about 37 percent, psychology services by about 

39 percent, and drug abuse treatment programs by almost 44 percent.26

 25Medical services obligations as reported by BOP include medical staff salaries and 

expenses, medical supplies, pharmaceutical costs, and costs of treating inmates outside 

of BOP institutions, including overtime costs paid to correctional officers transporting 

inmates. 

26Pursuant to 18 U.S.C. § 3621(e), BOP is required to make available appropriate 

substance abuse treatment for each prisoner the BOP determines has a treatable 

condition of substance addiction or abuse, including the provision of residential substance 

abuse treatment for all eligible prisoners (and make arrangements for appropriate 

aftercare), subject to the availability of appropriations.

BOP Obligated More 

Than $9 Billion for 

Inmate Health Care 

From Fiscal Years 

2009 through 2016 

and Several Factors 

Affected Costs

BOP’s Annual Health Care 

Obligations Have 

Increased Overall and on 

a Per Capita Basis
Page 16 GAO-17-379 BOP Health Care Costs

Table 2: Total Obligations for Inmate Health Care, Population, Per Capita Obligations, and Inflation Adjusted Per Capita 

Obligations in Bureau of Prisons (BOP) Institutions from Fiscal Years 2009 through 2016

(Total obligations are in millions of dollars; inmate population and obligations per capita are actual numbers; percentage change is in 

percent)

Fiscal year

2009 2010 2011 2012 2013 2014 2015 2016

Medical servicesa $865.2 $914.3 $955.3 $991.0 $1,061.9 $1,096.8 $1,146.7 $1,186.9

Psychology services $44.7 $47.3 $49.7 $51.6 $52.4 $55.3 $59.4 $62.3

Drug abuse treatment 

programs

$58.5 $64.1 $66.8 $69.8 $75.9 $79.2 $81.7 $84.0

Sex Offender Management 

Programs

$6.9 $6.9 $6.6 $7.2 $7.9 $8.7 $9.2 $8.3

Medical staff training $2.6 $2.5 $2.6 $2.7 $1.8 $3.2 $2.2 $2.7

Total actual health care 

obligations

$977.9 $1,035.0 $1,081.1 $1,122.3 $1,199.9 $1,243.3 $1,299.2 $1,344.2

Inmate population at end of 

fiscal year

172,000 172,747 177,368 176,909 176,410 171,868 164,853 156,266

Total annual per capita 

obligations

$5,686 $5,992 $6,095 $6,344 $6,802 $7,234 $7,881 $8,602

Total annual per capita 

obligations adjusted for 

inflation (2016 dollars)

$6,334 $6,495 $6,485 $6,627 $6,998 $7,350 $7,958 $8,602

Percentage change in 

inflation-adjusted per capita 

obligations from prior fiscal 

year

- 2.5 -0.2 2.2 5.6 5.0 8.3 8.1

Source: GAO analysis of BOP data.  GAO-17-379

Note: Numbers may not total because of rounding.

a

Medical services obligations as reported by BOP include medical staff salaries and expenses, 

medical supplies, pharmaceutical costs, and costs of treating inmates outside of BOP institutions, 

including overtime costs paid to correctional officers transporting inmates.

As shown in table 2, medical services obligations have been increasing 

over time. Psychology services and drug abuse treatment programs 

obligations have also been increasing over time. According to BOP 

officials, more recent increases in psychology services obligations can be 

attributed to an effort to fill vacancies in psychology services positions 

throughout BOP institutions. BOP also issued a new program statement 

in 2014 on the treatment and care of inmates with mental illness, which 

increased the treatment requirements and necessitated hiring more staff, 
Page 17 GAO-17-379 BOP Health Care Costs

according to BOP officials.27 BOP officials also explained that more recent 

increases in drug abuse treatment program obligations were due to BOP 

adding 18 additional Residential Drug Abuse Programs (RDAP), including 

some specialized RDAP, beginning in fiscal year 2013. For example, 

BOP added four RDAPs in high security institutions, and three Spanishlanguage RDAPs. Sex Offender Management Programs and medical staff 

training remained fairly constant during this time.

To account for any possible increases in health care obligations as a 

result of changes in the inmate population,28 we estimated the annual per 

capita, or per inmate obligations, by dividing the total health care 

obligations by the number of inmates—and this figure also increased over 

time, as can be seen in table 2. After adjusting for inflation, per capita 

health care obligations increased from $6,334 per inmate in fiscal year 

2009 to $8,602 per inmate in fiscal year 2016, or an increase of about 36 

percent during this time period.29 As table 2 shows, most of the growth in 

inflation adjusted per capita obligations occurred in the last four years of 

fiscal years 2013 through 2016.

Of the five categories we list for total health care obligations (medical 

services, psychology services, drug treatment programs, Sex Offender 

Management Programs, and medical staff training) medical services 

comprised the largest amount, about 88 percent. BOP-reported medical 

services obligations include several categories of expenditures, which we

separated into outside medical services and inside medical services, the 

latter of which we grouped into five major categories.30 We analyzed 

these categories and found that for fiscal year 2016, about 37 percent 

 27BOP, Program Statement: Treatment and Care of Inmates with Mental Illness, Number 

5310.16 (May 1, 2014).

28Between 1980 and 2013, BOP’s prison population increased by almost 800 percent. 

Since 2013, the prison population had begun to decline due to several significant efforts to 

recalibrate federal sentencing policy, including the retroactive application of revised drug 

sentencing guidelines, and new charging policies for low-level, non-violent drug offenders. 

See GAO, Federal Prison System: Justice Could Better Measure Progress Addressing 

Incarceration Challenges, GAO-15-454 (Washington, D.C.: July 19, 2015). 

29We adjusted the per capita obligations by adjusting every year to 2016 dollars. Before 

adjusting for inflation, per capita health care obligations increased from $5,686 per inmate 

in fiscal year 2009 to $8,602 per inmate in fiscal year 2016, or an increase of about 51 

percent. 

30Those categories were: salaries, benefits, and related employee expenses; other 

contractual services; supplies and materials (which includes pharmaceuticals); equipment; 

and other. 
Page 18 GAO-17-379 BOP Health Care Costs

were for medical staff labor costs inside BOP institutions and 39 percent 

were for outside medical services, as illustrated in figure 3. Outside 

medical services costs include costs to treat inmates at private 

physicians’ offices or at hospitals, as well as transportation costs. These 

costs include security related costs, including overtime costs for 

correctional officers to transport the inmates to those locations, as well as 

for their time guarding inmates, based on inmates’ custody levels, when 

inmates are hospitalized. According to BOP, in fiscal years 2015 and 

2016, security related costs made up 19 percent of outside medical 

services’ costs. 

Figure 3: Bureau of Prisons’ (BOP) Total Health Care Obligations Components, and Total Medical Services Obligations 

Components for Fiscal Year 2016

Note: Numbers may not total because of rounding.

a

Equipment includes the purchase of personal property of a durable nature. According to BOP 

officials, under medical services obligations this includes equipment such as X-ray machines, 

medication dispensing systems, stretchers, telehealth units and peripherals, cardiac 

monitors/defibrillators, and mini-ambulance carts.

b

Other includes transportation of items, rent, communications, and utilities, printing and reproduction, 

grants, subsidies and contributions, and insurance claims.
Page 19 GAO-17-379 BOP Health Care Costs

c

Supplies and materials include commodities acquired by formal contract or other form of purchase 

that are ordinarily consumed or expended within one year after they are put to use, converted in the 

process of construction, or used to form a minor part of equipment. Examples include office supplies, 

chemicals, surgical and medical supplies, and cleaning supplies. In the case of medical services 

obligations, the majority of this category is made up of pharmaceuticals.

d

Salaries, benefits, and related employee expenses include gross compensation for medical staff 

employed by BOP and the Commissioned Corps Officers of the U.S. Public Health Services (PHS); 

including paid leave, overtime pay, and holiday pay; benefits such as health and life insurance; and 

obligations for transportation, per diem, and travel expenses for medical staff while on official duty. 

PHS is an agency under the Department of Health and Human Services that provides public health 

services to underserved and vulnerable populations. BOP is responsible for PHS staff working in 

BOP institutions.

e

Outside medical services costs include costs to treat inmates at private physicians’ offices or at 

hospitals, as well as transportation costs. These costs include security related costs, including 

overtime costs for correctional officers to transport the inmates to those locations, as well as for their 

time guarding inmates, based on inmates’ custody levels, when inmates are hospitalized. 

At the same time that BOP’s health care obligations have been 

increasing, total United States health care expenditures has also been 

increasing.31 According to the Department of Health and Human Services 

National Health Expenditure Accounts (NHEA) data,32 total health care 

expenditures in the United States increased by 5.8 percent in fiscal year 

2015, and reached a per capita expenditure of $9,990.33 However, as we 

show in table 3, growth in expenditures, while increasing every year, has 

not increased consistently, with the last three fiscal years of 2014 through 

 31Expenditures are the actual spending of money. This is different from an obligation, 

which is a definite commitment that creates a legal liability of the government for the 

payment of goods and services received.

32The U.S. Department of Health and Human Services has published an annual series of 

data presenting total health expenditures since 1964. The Department completes these 

estimates with the goal of measuring the total annual dollar amount of health care 

consumption in the U.S., as well as the dollar amount invested in the medical sector 

structures and equipment and non-commercial research to procure health services in the 

future. 

33National health expenditures (NHE) include, among others, hospital care; physician and 

clinical services; mental health practitioner services; dental services; other health, 

residential, and personal care services; home health care; prescription drugs; durable 

medical equipment; nursing care; and substance abuse facilities. While not directly 

comparable to health care services in a prison setting, NHE includes most of the same 

kinds of expenses that are incurred by BOP, such as costs of medical professionals’

services and pharmaceuticals.
Page 20 GAO-17-379 BOP Health Care Costs

2016 increasing at a higher rate.34 Table 3 also shows the per capita 

expenditures, which have increased every year over the 8-year time 

period.

Table 3: National Health Expenditure Increases and Per Capita Expenditures from Calendar Year 2009 through 2016

(Annual growth in percentage and per capita expenditures in actual dollars)

Calendar year

2009 2010 2011 2012 2013 2014 2015 2016a

National health 

expenditures annual 

percentage growth

4.0 4.1 3.5 4.0 2.9 5.3 5.8 4.8

National health 

expenditures per capita

$8,141 $8,404 $8,638 $8,915 $9,110 $9,515 $9,990 $10,372

Source: U.S. Department of Health and Human Services.  GAO-17-379

a

As of May 2017, national health expenditure figures for 2016 are projections rather than actual 

figures.

National health expenditures are not directly comparable to BOP’s costs 

because the inmate population is predominantly adult and male, unlike 

the overall U.S. population. Nevertheless both national health 

expenditures and BOP health care costs have risen at a higher rate in the 

last three years.

We spoke with numerous BOP officials at the institutional, regional, and 

Central Office levels to discuss the factors that affected inmate health 

care costs. Officials frequently cited the following as major factors:

• inmates entering with relatively poorer health,

• aging inmates,

 34Higher growth rates in 2014 were primarily due to expansion of private health insurance 

and Medicaid coverage under the Patient Protection and Affordable Care Act, Pub. L. No. 

111-148, 124 Stat. 119 (2010), and to the rapid growth in drug expenditures, including the 

introduction of new hepatitis C drugs. Higher growth rates in 2015 were due to accelerated 

growth in spending for private health insurance, hospital care, and physician and clinical 

services. See: Health Affairs, Anne B. Martin, Micah Hartman, Joseph Benson, Aaron 

Catlin, and the National Health Expenditure Accounts Team, National Health Spending in 

2014: Faster Growth Driven by Coverage Expansion and Prescription Drug Spending. 

Health Affairs published online Dec. 2, 2015, and Anne B. Martin, Micah Hartman, 

Benjamin Washington, Aaron Catlin, and the National Health Expenditure Accounts Team, 

National Health Spending: Faster Growth in 2015 As Coverage Expands And Utilization 

Increases. Health Affairs published online Dec. 2, 2016. 

Various Factors Affected 

BOP’s Health Care Costs
Page 21 GAO-17-379 BOP Health Care Costs

• rising pharmaceutical prices, and

• outside medical services.

Inmates entering with relatively poorer health—BOP officials stated 

that inmates are a unique population that poses health care challenges. 

For example, officials stated that inmates come into the system with more 

acute needs from limited access to health care or they have engaged in 

risky behaviors, such as substance abuse. Inmates also tend to have 

higher rates of infectious diseases and chronic conditions that can persist 

throughout incarceration. According to the Council of State Governments 

Justice Center, rates of mental illness, substance use disorders, 

infectious disease, and chronic health conditions are as much as seven 

times higher for inmates than rates in the general population.35

Aging inmates—BOP officials stated that an aging inmate population 

affects health care costs. In a 2015 report, the DOJ OIG also found that 

aging inmates are more costly to incarcerate than younger inmates due to 

increased medical needs.36 BOP data show that the average age of 

inmates has increased from fiscal year 2009 through 2016, as has the 

percentage of inmates aged 55 years or older.37 As seen in table 4, the 

percentage of inmates aged 55 years or older increased from 8.4 percent 

of the population in fiscal year 2009 to 12.0 percent in fiscal year 2016, 

which is an increase of about 44 percent during this time period.

 35Council of State Governments Justice Center, Medicaid and Financing Health Care for 

Individuals Involved with the Criminal Justice System, (New York: Dec. 2013). The Council 

of State Governments Justice Center is a national nonprofit organization that serves 

policymakers at the local, state, and federal levels from all branches of government.

36DOJ OIG, The Impact of an Aging Inmate Population on the Federal Bureau of Prisons, 

Evaluations and Inspections Division 15-05 (Washington, D.C.: May 2015). 

37While there is no consensus on what cutoff age is appropriate to be considered an aging 

inmate, correctional health experts typically define the prison population as “older” at the 

age of 50 or 55 because inmates generally experience health problems related to aging at 

a younger age than non-incarcerated people. For the purposes of our report, we are 

defining “aging inmate” as 55 years of age or older.
Page 22 GAO-17-379 BOP Health Care Costs

Table 4: Percentage Aged 55 and Older, and Average Age of Inmates in Bureau of Prisons (BOP) Institutions from Fiscal 

Years 2009 through 2016

Fiscal year

2009 2010 2011 2012 2013 2014 2015 2016

Percentage of inmates 

aged 55 years and older

8.4 8.8 9.3 9.9 10.4 11.0 11.6 12.0

Average inmate age 38.2 38.6 38.9 39.2 39.6 39.9 40.3 40.5

Source: GAO analysis of BOP data.  GAO-17-379

Note: Fiscal years 2009 through 2015 is GAO analysis of BOP provided data but fiscal year 2016 is 

BOP-generated data.

According to BOP officials, and the 2015 DOJ OIG report, increasing 

numbers of aging inmates are due to (1) inmates entering the system for 

the first time at older ages, and (2) inmates aging over time while 

incarcerated and serving long sentences.38

Rising Pharmaceutical Prices—According to BOP officials, and data we 

reviewed, expenditures for pharmaceuticals have risen from fiscal years 

2009 through 2016. As table 5 shows, BOP’s total pharmaceutical 

expenditures have increased from $61.4 million in fiscal year 2009 to 

$111.7 million in fiscal year 2016, or an increase of about 82 percent. 

Accounting for changes in inmate population over this time period, we 

found that per capita expenditures have also increased, even in years 

when population fell. Adjusting for inflation, and using 2016 dollars, we 

found that overall per capita expenditures increased from $443 per 

inmate in fiscal year 2009 to $715 in fiscal year 2016, or an increase of 

about 61 percent.39

 38DOJ OIG 15-05. 

39Before adjusting for inflation, per capita pharmaceutical obligations increased from $357 

per inmate in fiscal year 2009 to $715 per inmate in fiscal year 2016, or an increase of just 

over 100 percent.
Page 23 GAO-17-379 BOP Health Care Costs

Table 5: Bureau of Prisons’ (BOP) Pharmaceutical Expenditures Adjusted for Population and Inflation from Fiscal Years 2009 

through 2016

(Expenditures are in millions of dollars, per capita expenditures are in actual dollars, and percentage change is in percent)

Fiscal year

2009 2010 2011 2012 2013 2014 2015 2016

Total pharmaceutical 

expenditures 

$61.4 $64.2 $67.0 $74.1 $79.5 $89.9 $102.3 $111.7

Inmate population at end 

of the fiscal year

172,000 172,747 177,368 176,909 176,410 171,868 164,853 156,266

Per capita real 

pharmaceutical 

expenditures 

$357 $371 $378 $419 $451 $523 $621 $715

Per capita 

pharmaceutical 

expenditures adjusted 

for inflation (in 2016 $) 

$443 $445 $437 $469 $499 $566 $647 $715

Percentage change in 

inflation-adjusted per 

capita pharmaceutical 

expenditures

- 0.4 -1.7 7.3 6.4 13.4 14.4 10.4

Source: GAO analysis of BOP data.  GAO-17-379

According to BOP officials, new advances in certain medications—in 

particular hepatitis C medication, HIV/AIDS medication, and biologics to 

treat cancers—have contributed to this increase.40 For example, the Food 

and Drug Administration (FDA) approved two new medications in a new 

class of hepatitis C drugs in May 2011, which significantly increased the 

cost of treating hepatitis C-infected inmates. As we show in table 6, 

BOP’s hepatitis C medication expenditures increased by almost 132 

percent from fiscal year 2011 to 2012. FDA approved additional new 

medications at the end of 2013 and in 2014 that essentially cure hepatitis 

C, but that also drove up BOP’s treatment costs. As these latest 

medications became the standard of care for treating hepatitis C, BOP 

was therefore required to use them. Table 6 also shows that BOP 

experienced an increase in hepatitis C medication expenditures of about 

136 percent from fiscal year 2014 to 2015. Overall, BOP experienced an 

increase of about 427 percent for hepatitis C medication during the 8-year 

 40Biological products include a wide range of products such as vaccines, blood and blood 

components, allergenics, somatic cells, gene therapy, tissues, and recombinant 

therapeutic proteins. In contrast to most drugs that are chemically synthesized and their 

structure is known, most biologics are complex mixtures that are not easily identified or 

characterized. 
Page 24 GAO-17-379 BOP Health Care Costs

time period.41 According to BOP officials, the average cost to treat one 

inmate with the new medication ranges from $30,000 to $60,000. BOP 

treated 240 inmates in fiscal year 2015 and 327 inmates in fiscal year 

2016 with the new medications. Additionally, according to BOP’s 2018 

Congressional Budget Justification, BOP estimated that there were

approximately 20,000 inmates infected with hepatitis C, most of whom 

had not been treated. Table 6 also shows increases in expenditures for 

medication to treat cancer and HIV/AIDS. Overall, expenditures for 

cancer medication increased by about 315 percent during the 8 year time 

period, and by about 87 percent for HIV/AIDS medication.

 41The Department of Veterans Affairs (VA) has also experienced these types of increases 

to treat hepatitis C, as our prior work has shown. See for example: GAO, VA’s Health 

Care Budget: In Response to a Projected Funding Gap in Fiscal Year 2015, VA Has Made 

Efforts to Better Manage Future Budgets, GAO-16-584 (Washington, D.C.: June 3, 2016), 

and VA’s Health Care Budget: Preliminary Observations on Efforts to Improve Tracking of 

Obligations and Projected Utilization, GAO-16-374T (Washington, D.C.: Feb. 10, 2016).
Page 25 GAO-17-379 BOP Health Care Costs

Table 6: Bureau of Prisons’ (BOP) Pharmaceutical Expenditures for Hepatitis C, Cancer, HIV/AIDS, and Psychotropic Drugs 

and Percentage Change from Fiscal Years 2009 through 2016

(Expenditures in millions of dollars, and percentage change in percentage)

Fiscal year

2009 2010 2011 2012 2013 2014 2015 2016

Hepatitis C medication 

expenditures

$2.6 $2.0 $1.9 $4.5 $4.2 $5.3 $12.6 $13.6

Hepatitis C medication 

percentage change from 

previous year

- -24.6 -1.2 131.9 -6.4 27.1 136.3 8.7

Cancer medication 

expenditures

$1.9 $1.6 $2.1 $4.1 $3.7 $5.9 $6.4 $7.9

Cancer medication 

percentage change from 

previous year

- -15.1 32.0 92.6 -10.4 60.3 7.8 24.3

HIV/AIDS medication 

expenditures

$14.6 $14.5 $16.1 $19.0 $20.1 $23.2 $25.1 $27.4

HIV/AIDS medication 

percentage change from 

previous year

- -0.9 11.0 17.7 6.0 15.4 8.1 9.3

Psychotropic medication 

expenditures

$10.6 $10.2 $8.0 $7.0 $6.3 $4.2 $3.8 $2.7

Psychotropic medication 

percentage change from

previous year

- -2.9 -21.8 -12.2 -9.8 -33.1 -9.5 -29.1

Source: GAO analysis of BOP data.  GAO-17-379

Note: These expenditures are based on BOP’s annual list of top 50 medication expenditures and do 

not encompass the totality of expenditures on medications. On average, the top 50 medications make 

up about 67 percent of total pharmaceutical expenditures.

To ensure appropriate management of the hepatitis C infected inmate 

population, BOP developed treatment criteria, consistent with the 

American Association for the Study of Liver Diseases guidelines, to 

expediently identify and treat inmates with the highest medical need.42 In 

addition, the BOP Chief Pharmacist and other officials told us that they 

seek opportunities to acquire voluntary price reductions below the 

 42The American Association for the Study of Liver Diseases (AASLD) is the leading 

organization of scientists and health care professionals committed to preventing and 

curing liver disease. AASLD develops evidence-based guidelines, which include 

recommendations of preferred approaches to the diagnostic, therapeutic, and preventative 

aspects of care related to liver disease. 
Page 26 GAO-17-379 BOP Health Care Costs

statutory Federal Supply Schedule pricing for hepatitis C medication from 

drug manufacturers.43

BOP data show that while pharmaceutical expenditures have increased 

overall, pharmaceutical expenditures for certain categories have varied, 

as can be seen in table 6 and figure 4. Expenditures have increased for 

hepatitis C, cancer, and HIV/AIDS medication, but decreased for 

psychotropic medications, which are generally used to treat mental health 

conditions. According to BOP officials, the availability of generic 

equivalents has helped decrease costs of psychotropic medication. Our 

prior work has also shown that generic drug prices have fallen overall 

since 2010, despite some extraordinary price increases in some generic 

medications.44

 43The Federal Supply Schedules (FSS) program, managed by the General Services 

Administration, provides federal agencies a simplified method of purchasing commercial 

products and services at prices associated with volume buying. A schedule is a set of 

contracts awarded to multiple vendors that provide similar products and services. BOP 

seeks price reductions to obtain a price lower than the FSS price, in accordance with 

Federal Acquisition Regulation 8.405-4, 48 C.F.R. § 8.405-4. 

44See for example, GAO, Generic Drugs Under Medicare: Part D Generic Drug Prices 

Declined Overall, but Some Had Extraordinary Price Increases, GAO-16-706 

(Washington, D.C.: Aug. 12, 2016), and Prescription Drugs: Trends in Usual and 

Customary Prices for Commonly Used Drugs, GAO-11-306R (Washington, D.C.: Feb. 10, 

2011). Department of Health and Human Services, Office of the Assistant Secretary for 

Planning and Evaluation, Understanding Recent Trends in Generic Drug Prices

(Washington, D.C.: Jan. 27, 2016).
Page 27 GAO-17-379 BOP Health Care Costs

Figure 4: Change in Composition of Bureau of Prisons’ (BOP) Expenditures for Hepatitis C, Cancer, HIV/AIDS, and 

Psychotropic Medication from Fiscal Years 2009 to 2016

Notes: Numbers may not total because of rounding.

These expenditures are based on BOP’s annual list of top 50 medication expenditures and do not 

encompass the totality of expenditures on medications. On average, the top 50 medications make up 

about 67 percent of total pharmaceutical expenditures.

Outside Medical Services—BOP officials told us that costs for outside 

medical services have risen, which is another factor that is likely affecting 

their total obligations. According to BOP data, the total amount obligated 

increased from $322.6 million in fiscal year 2009 to $456.7 million in fiscal 

year 2016 (see table 7), which is an increase of about 45 percent over 

this period.
Page 28 GAO-17-379 BOP Health Care Costs

Table 7: Bureau of Prisons’ (BOP) Outside Medical Services Obligations from Fiscal Years 2009 through 2016 (in millions of 

dollars)

Fiscal year

2009 2010 2011 2012 2013 2014 2015 2016

Outside medical servicesa $322.6 $355.2 $366.1 $382.7 $419.9 $433.9 $453.2 $467.7

Percentage change from previous 

year

- 10.1 3.1 4.5 9.7 3.3 4.4 3.2

Source: GAO analysis of BOP data.  GAO-17-379

a

Outside medical services include obligations for contractual services related to the provision of 

health care.

As previously discussed, BOP incurs costs for outside care when BOP 

staff take inmates outside for specialty care that cannot be provided 

inside the institution, or for acute or emergency care, which could 

potentially become a catastrophic case.45 We asked BOP for the 

catastrophic care cost data for the 6 regions, for fiscal years 2014 and 

2015. BOP was able to provide us the data for five of six regions for fiscal 

year 2015, and provided incomplete data for 2014 for most regions. When 

we asked one region why the data were incomplete, we were told that 

there was no requirement to collect such data. Although these data are 

incomplete, they show that BOP estimated costs of at least $100 million 

in fiscal year 2015 for catastrophic care in 5 of its 6 regions, which 

represents about 22 percent of outside medical services obligations for 

2015. In its Congressional Budget Justifications from fiscal years 2009 

through 2016, BOP reported that it had developed a process for 

monitoring and tracking catastrophic care costs; however, BOP officials 

acknowledged that their efforts to date have not been successful. During 

the course of our review, BOP designed a data collection instrument, 

which BOP officials stated they distributed to the regional offices, in order 

to more uniformly collect catastrophic care data moving forward.

Outside medical services made up about 40 percent of medical services 

obligations annually from fiscal years 2009 through 2016. According to 

BOP officials, BOP has difficulties attracting sufficient medical staff to 

care for inmates in-house for institutions in remote locations, and 

 45BOP defines a catastrophic case as an event where an inmate in a medical care level 1, 

2, or 3 institution incurs outside care costs of $35,000 or more, in conjunction with one of 

these three events: requires a hospital stay of 7 days or more; has a hospital readmission 

within 30 days of discharge for the same diagnosis; or has a recurring medical need such 

as dialysis for kidney failure.
Page 29 GAO-17-379 BOP Health Care Costs

therefore relies on outside care to a greater extent in these locations. We 

have also reported that BOP finds it particularly challenging to hire 

medical staff for institutions in rural locations because of the institutions’

location and low pay in these areas.46 In addition to the challenges posed 

by rural locations, some BOP institutions also have fewer community 

health care resources in proximity. As shown in figure 5, we found that of 

the 98 BOP institutions, 64 of them have five or fewer hospitals within a 

20 mile radius, and 9 had no hospitals within a 20 mile radius.47 BOP 

officials also noted that the existence of a hospital in proximity to a BOP 

institution does not guarantee the hospital is willing to contract with BOP 

to serve an inmate population.48 A DOJ OIG report found that in one BOP 

complex, a decline in staffing from fiscal year 2010 to fiscal year 2014 

corresponded with an increase in outside medical services costs of 47 

percent during the same period.49 According to BOP officials, this is the 

primary reason BOP instituted its medical care level classification system, 

so the level of inmate health needs are matched to locations where 

community health care resources are sufficient.

 46See GAO, Bureau of Prisons: Management of New Prison Activations Can Be Improved, 

GAO-14-709 (Washington, D.C.: Aug. 22, 2014). In this report, we found that BOP was 

encountering obstacles with hiring sufficient staff during the process of activating 

institutions, the process by which it prepares them for inmates, and therefore 

recommended that BOP analyze staffing data at individual institutions in the activation 

process to assess their progress toward reaching authorized staffing levels. BOP 

implemented this recommendation by September 2016. 

47BOP has 122 BOP-operated institutions, 39 of which are located in one of 15 FCCs. 

FCCs are a cluster of institutions with different missions (for example, medical/mental 

health, pretrial, and holdover), which are located together. Because they are located 

together, for the purposes of this analysis we counted an FCC as one institution. When 

counting an FCC as one institution, there are 98 BOP institutions. We used 98 BOP 

institutions as the total number of institutions for our analysis. 

48BOP officials stated that hospitals are not obligated to enter into contractual 

arrangements with BOP and some refuse due to concerns, such as not wanting inmates in 

their waiting rooms or entering through their front doors.

49DOJ OIG, Review of the Federal Bureau of Prisons’ Medical Staffing Challenges, 

Evaluations and Inspections Division 16-02 (Washington, D.C.: March 2016). 
Page 30 GAO-17-379 BOP Health Care Costs

Figure 5: Bureau of Prisons’ (BOP) Institutions and Number of Hospitals Within 20 Miles
Page 31 GAO-17-379 BOP Health Care Costs

BOP lacks data on the health care services it provides to inmates, which 

is otherwise known as health care utilization data.50 BOP officials 

explained that existing data systems, such as the Financial Management 

Information System (FMIS), the accounting system of record, and BEMR, 

are not capable of collecting health care utilization data. Specifically, BOP 

cannot collect any health care utilization data from FMIS, because it is a 

DOJ-wide system and was not designed to allow DOJ components, such 

as BOP, to customize it. For example, while FMIS tracks expenditures on 

categories such as salaries and supplies, it cannot be customized to 

analyze health care data. BOP officials also said they cannot collect 

financial data from BEMR because BEMR was not designed to collect 

such data.

BOP officials acknowledged that health care utilization data is important 

to understand and control health care costs, but recognized that BOP 

does not have data on its own use of resources. Officials also told us that 

BOP’s lack of health care utilization data has stalled its implementation of 

one health care cost control opportunity identified in 2012 that would 

leverage its volume purchasing power while contracting for medical

services. Specifically, BOP is planning to pilot a regional comprehensive 

medical services contract. However, according to BOP officials, they need 

to provide information to the potential contractors such as how utilization 

rates compare across institutions within the region, and across the 

 50Utilization can be measured as the number of services provided to a patient, such as the 

number of X-rays. More often, however, a variety of procedures and services are of 

interest, and some measure of “cost” is assigned to each service so that resource intensity 

can be summed over all provided services. 

BOP Lacks or Does 

Not Analyze Certain 

Health Care Data 

Necessary to 

Understand and 

Control its Costs

BOP Lacks Health Care 

Utilization Data
Page 32 GAO-17-379 BOP Health Care Costs

different regions, in order for potential contractors to build proposals.51

Because BOP is not positioned to provide utilization data, it cannot move 

forward with its plans. BOP officials also stated that a lack of data on its 

utilization of services stifles their ability to evaluate various health care 

cost control efforts.

Given these limitations, BOP has explored and identified some solutions 

since 2009 to collect data on its utilization of health care services but has

not yet determined how to obtain health care utilization data.52 Examples 

include the following:

• In fiscal year 2009, BOP began utilizing a medical claims adjudication 

services contract through which BOP sought, in part, to gather data 

on the utilization of health services outside its institutions.53 While 

BOP officials stated they intended to eventually cover all BOP 

institutions under this contract, as of February 2017, only 23 BOP 

institutions have used the service. BOP officials explained that BOP 

did not add more institutions to the initial medical claims adjudication 

contract because the contract ended before it could do so. BOP 

officials could not explain why more institutions had not utilized the 

services in the five years preceding the end of the contract, but some 

regional officials we spoke with, and officials at some of the 

institutions we visited, said the medical claims adjudication services 

provided were not cost effective. Senior BOP officials disagreed with 

the regional officials’ statement and said that the services were 

necessary to verify that medical services invoices were correct. BOP 

created a solicitation for a new contract in February 2016, and, as of 

February 2017, BOP was evaluating offers. According to officials, 

BOP is reviewing several proposals to contract for medical claims 

adjudication services for all BOP-managed institutions and expects to 

award the contract in early spring 2017.

 51Generally, each BOP institution has its own contract for outside medical services. Under 

the proposed regional pilot, BOP would award a single regional comprehensive medical 

services contract to cover health care for all BOP institutions in one region. This could 

save the agency $30 million per year, according to internal BOP documents. However, 

BOP did not have any documentation of the analysis underlying this estimate. 

52GAO did not evaluate the solutions BOP described to determine whether they would 

achieve BOP’s objectives. 

53The primary objective of medical claims adjudication was to ensure compliance with the 

applicable negotiated fee schedule for medical services. BOP requires that its medical 

claims adjudication services provider also make data available on a periodic and as 

needed basis.
Page 33 GAO-17-379 BOP Health Care Costs

• In fiscal year 2016, BOP contracted for a study to consider various 

options to enhance its ability to collect and analyze data through 

BEMR, including data on utilization of health care services inside and 

outside BOP’s institutions. The study considered three options—

keeping the existing system as is, enhancing the existing system, or 

replacing the system entirely. The study included costs and 

recommendations for BOP to consider. As of February 2017, BOP 

officials indicated that they are still exploring these options.

• In fiscal year 2016, to provide potential vendors with utilization data to 

pilot the regional comprehensive health care contract, as described 

earlier, BOP began searching for computer software to convert its 

paper claims for outside medical services into electronic format files. 

Such files would include the inmate’s description, the condition for 

treatment, the service provided, and the cost of treatment. As of 

February 2017, BOP officials had not yet identified any cost-effective 

solutions through which to convert paper claims but said they continue 

to pursue this option.

In fiscal year 2016, BOP officials also attempted to devise a method to 

collect health care utilization data from each of its institutions; however, 

they did not implement this approach after receiving feedback from 

institution-based personnel that it would be too burdensome on them to 

implement. As of February 2017, according to officials, BOP continues to 

explore options to collect and analyze utilization data based on the 

experiences of other health care systems. For example, BOP convened a 

federal interagency group to discuss how other federal agencies study 

utilization rates and discussed with officials from the California 

Department of Corrections the approach those officials have taken.

BOP officials recognize the importance of finding a solution to collect 

utilization data and has identified, and in some cases attempted then 

abandoned, various possible solutions. However, BOP officials told us 

that they were not aware of OMB guidance on how to conduct a costeffectiveness analysis, which describes how to systematically evaluate 

options, and would review it as they continue to pursue a solution to 

BOP’s lack of utilization data.54 OMB Circular A-94 calls for conducting a 

cost-effectiveness analysis when the benefits from competing alternatives 

 54OMB defines cost-effectiveness as a systematic quantitative method for comparing the 

costs of alternative means of achieving the same stream of benefits or a given objective. 

OMB, Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs, 

Circular No. A-94 (Washington, D.C.: Oct. 29, 1992).
Page 34 GAO-17-379 BOP Health Care Costs

are the same or where a policy decision has been made that the benefits 

must be provided.55 By conducting a cost-effectiveness analysis of the 

potential ways to obtain health care utilization data, BOP will be better 

positioned to determine the most cost-effective way to collect such data 

and to start doing so in a timely manner.

BOP has not consistently collected and analyzed its institutions’ health 

care spending data to identify additional cost control opportunities, such 

as through strategic sourcing. Strategic sourcing is a process that moves 

an organization away from numerous individual procurements toward a 

broader, aggregate procurement approach. This broader approach 

generally begins with an analysis of spending (spend analysis) and the 

identification of products and services for which a more effective sourcing 

strategy could be implemented.56 We have emphasized the importance of 

conducting a comprehensive spend analysis for strategic sourcing 

purposes since 2002. The approach provides knowledge about how much 

is being spent for goods and services, who the buyers are, who the 

suppliers are, and where the opportunities are to save money and 

improve performance.57

BOP officials told us that they do not routinely analyze or review BOP’s 

spending data to identify new opportunities for cost savings through 

strategic sourcing. BOP procurement officials told us they search for 

strategic sources for a health care good or service once their colleagues 

in HSD notify them that BOP needs to obtain the good or service. BOP 

officials told us it is time intensive to collect and analyze spending data. 

Nevertheless, they acknowledged the benefits of strategic sourcing and 

stated they need to seek additional strategic sourcing opportunities. In 

 55OMB, Circular A-94, Guidelines and Discount Rates for Benefit-Cost Analysis of Federal 

Programs. OMB Circular A-94 provides guidance for cost-effectiveness analyses. CostEffectiveness analysis is a less comprehensive technique than a benefit-cost analysis but 

can be appropriate when considering competing alternatives with the same benefit. 

56OMB defines strategic sourcing as the collaborative and structured process of critically 

analyzing an organization’s spending and using this information to make business 

decisions about acquiring commodities and services more effectively and efficiently. OMB, 

Memorandum for Chief Acquisition Officers, Chief Financial Officers, and Chief 

Information Officers on Implementing Strategic Sourcing (Washington, D.C.: 2005).

57GAO, Strategic Sourcing: Leading Commercial Practices Can Help Federal Agencies 

Increase Savings When Acquiring Services, GAO-13-417 (Washington, D.C.: Apr. 15, 

2013). See also, Best Practices: Using Spend Analysis to Help Agencies Take a More 

Strategic Approach to Procurement, GAO-04-870 (Washington, D.C.: Sept. 16, 2004).

BOP Does Not Analyze 

Available Health Care 

Spending Data
Page 35 GAO-17-379 BOP Health Care Costs

fiscal year 2013, BOP identified health care supplies/services as a target 

area for identifying cost savings opportunities that are likely to produce 

significant savings through strategic sourcing. Further, according to 

BOP’s April 2016 Strategic Sourcing Program guidance, the key to the 

strategic sourcing program is a thorough analysis of spending patterns—

or a spend analysis—to determine what is being purchased, how it is 

being purchased, the dollar value of those purchases, and which vendors 

are involved. This guidance is consistent with GAO’s prior work on 

leading commercial practices in strategic sourcing.58 However, despite 

this guidance, BOP officials told us that they had not yet reviewed health 

care spending data and could not identify any BOP official who would 

have the time to complete the task.

Although BOP has not conducted a spend analysis, it has identified and 

implemented some strategic sourcing opportunities, such as pursuing 

national contracts so that all institutions can pay for the same goods or 

services at the same negotiated rates. When national contracts are not in 

place, each BOP institution generally procures health care goods and 

services on an individual basis and some institutions have individually 

procured the same medical care equipment or services at varied costs. 

For example, several institutions have either purchased or leased one 

particular brand of robotic equipment to dispense medication as part of 

their pharmaceutical operations, but costs for the equipment varied 

across the institutions—one had an initial purchase cost of about 

$122,000, while another had an initial annual lease cost that was about 

$43,000. BOP officials also told us that they identify strategic sourcing 

opportunities through discussions with other agencies and have 

participated in interagency collaboration on strategic sourcing.

According to BOP documentation, BOP does not have a single data 

system that can provide health care spending data for a spend analysis; 

however, existing sources, such as the Federal Procurement Data 

System-Next Generation (FPDS-NG), could assist BOP in its data 

collection effort. For example, BOP records all contracts with estimated 

values above a certain threshold (currently $3,500) in the FPDS-NG, a 

database used by agencies across the federal government to record 

 58GAO-13-417.
Page 36 GAO-17-379 BOP Health Care Costs

procurement information.59 Additionally, according to BOP officials, each 

institution’s business administrators regularly audit spending data from 

purchase cards—cards used by government agencies to buy goods or 

services. One BOP region, for example, created a method to monitor its 

institutions’ spending through its local accounting program that helped the 

region identify opportunities to control costs. Officials found, when they 

began tracking some aspects of institutional spending, that two 

institutions within that region were spending $5,000-$10,000 more per 

year on biohazardous waste disposal than other institutions. As a result, 

officials from the region contacted the institutions’ management and 

asked them to identify lower cost vendors, which the institutions did. 

Conducting spend analyses using these existing and readily available 

data sources could provide BOP with several benefits, including 

knowledge about how much is being spent for given products and 

services, who the buyers and suppliers are, and where opportunities exist 

for BOP to use strategic sourcing to leverage buying and save money.

 59FPDS-NG can be accessed at https://www.fpds.gov. FPDS-NG data and reporting 

requirements for FPDS-NG are described in FAR subpart 4.6, 48 C.F.R. subpart 4.6. The 

micro-purchase threshold became $3,500 in July 2015. 80 Fed. Reg. 38, 293, 38, 294 

(July 2, 2015) (codified at 48 C.F.R. § 2.101).
Page 37 GAO-17-379 BOP Health Care Costs

BOP-wide Initiatives

BOP has taken bureau-wide actions to help control health care costs 

through several initiatives, but has generally not evaluated the 

effectiveness of these initiatives. We reviewed BOP documents to identify 

initiatives aimed at health care cost control for the period beginning with 

fiscal year 2009 through November 2016. Through our review and 

discussions with BOP officials, as of February 2017, we found that BOP 

had 10 initiatives aimed at controlling its health care costs (see table 8).60

The table provides a description of each initiative and status.

 60BOP initially provided several more health care cost control initiatives but BOP officials 

later determined that only 10 were health care cost control initiatives. BOP officials told us 

that during the course of this review, they determined that the other initiatives were aimed 

at clinical care or administrative reporting, rather than cost control.

BOP Has Initiatives 

Aimed to Control 

Health Care Costs 

but Has Not 

Assessed Their 

Effectiveness, Applied 

a Sound Planning 

Approach, or 

Documented its 

Analyses of Federal 

Medical Centers’ 

Missions

BOP Has Initiatives 

Intended to Control Health 

Care Costs but Has Not 

Evaluated Their 

Effectiveness
Page 38 GAO-17-379 BOP Health Care Costs

Table 8: Bureau of Prisons (BOP)-Identified Health Care Costs Savings Initiatives from Fiscal Years (FY) 2009 through 

February 2017

Initiative, with year implemented BOP Description

Implemented

1. Pharmaceutical Procurement [2008] BOP participates in initiatives to leverage the combined purchase requirements 

with the Department of Veterans Affairs, Department of Defense and Indian 

Health Service. Additionally the BOP seeks opportunities to acquire voluntary 

price reductions from manufacturers below statutory Federal Supply Schedule 

pricing.a

2. Pharmaceuticals Prime Vendor 

Program [2000]

The Pharmaceuticals Prime Vendor Program enables BOP to leverage high 

volume purchasing to reduce the individual pricing of select medications.

3. Contract Dental Lab Operations 

[2009]

The BOP dental program provides prosthetics to inmate patients that are 

partially or completely toothless. Dental laboratory services are provided by the 

national contracted vendor when one is available. 

Partially Implemented

4. Bill Adjudication (Medical Claims 

Adjudication) [est. FY2009]

BOP contracts with a medical claims adjudication vendor to review claims for 

duplicate billing, claims for services not requested or not appropriate for the 

stated diagnoses, and local market rates for physician and facility charges in 23 

BOP institutions (as of February 2017). Contracting for medical claims 

adjudication enables BOP to identify patterns of fraud, waste, and abuse. BOP 

plans to fully implement this initiative in its remaining institutions once a new 

contract is awarded. 

5. National Contracts for Medical 

Resources [FY2017]

BOP signed an Interagency Agreement with the Department of Veteran Affairs 

to use its Medical/Surgical Prime Vendor Program, which allows BOP institutions 

to purchase medical and surgical supplies. According to BOP officials, this 

initiative is currently in the start-up phase. 

6. Equipment Standardization [FY2017] BOP’s Health Services Division (HSD) is in the process of updating its enterprise 

Automated Inventory Management System to standardize major medical 

equipment.

Planned

7. Regional Comprehensive Medical 

Services Contracts [est. 

implementation in FY2020]

BOP is exploring the feasibility of regional comprehensive medical services 

contracts that serve a multi-state area. Currently, BOP institutions use separate 

contracts.

8. Federal Ceiling Price (Big 4 Pricing) 

for Pharmaceuticals [est. 

implementation unknown]b

BOP is currently not included in the federal law that establishes the Federal 

Ceiling Price (Big 4 Pricing) for pharmaceuticals. As a result, BOP often pays 

more for pharmaceuticals than other government agencies. According to BOP 

officials, BOP is exploring the feasibility of legislation being passed to make Big 

4 pricing available to BOP.
Page 39 GAO-17-379 BOP Health Care Costs

Initiative, with year implemented BOP Description

9. BOP Mail Order Pharmacy 

(BOPMOP) [est. implementation 

within 5 years]

BOPMOP is an initiative that is to enable remotely located pharmacists to 

receive automated orders from BOP institutions for dispensing prescribed 

medications and mailing the packaged medications to the inmate needing 

pharmaceutical therapy. The remote fill operation will replace the need for 

hiring/retaining an on-site pharmacist in institutions that house mostly healthy 

inmates, and provides temporary back-up for institutions experiencing a 

prolonged absence of an institution pharmacist (e.g., due to an extended 

illness). BOP officials believe that BOPMOP will maximize pharmacy resources 

by consolidating storage of prescription drugs into one central inventory and 

through buying the least expensive brand of generic medications.

Planned

10. Unit Dose Repackaging [unknown] BOP plans to purchase bulk medication, which is generally less expensive than 

purchasing unit dose packaged items, and repackage them locally or at a central 

location. 

Source: GAO analysis of BOP data.  GAO-17-379

Note: For the purpose of this report, we included initiatives that began prior to fiscal year 2009 if they 

continued to be implemented during the period of fiscal year 2009 to November 2016.

a

The Federal Supply Schedules (FSS) program, managed by the General Services Administration, 

provides federal agencies a simplified method of purchasing commercial products and services at 

prices associated with volume buying. A schedule is a set of contracts awarded to multiple vendors 

that provide similar products and services. According to officials, BOP seeks price reductions to 

obtain a price lower than the FSS price, in accordance with Federal Acquisition Regulation 8.405-4, 

48 C.F.R. § 8.405-4.

b

Federal ceiling prices, also called Big Four prices, are available to the Departments of Veterans 

Affairs and Defense, the Public Health Service, and the U.S. Coast Guard. These prices are 

mandated by law to be lower than nonfederal average manufacturer prices.

BOP had also reported six other cost containment initiatives or systems in 

its fiscal year 2017 Congressional Budget Justification. BOP officials 

explained that although they had previously publicly reported that these 

initiatives were designed to contain health care costs, during the course 

of our review they realized that their primary purpose was instead for 

clinical or administrative purposes. BOP officials stated that there may be 

a secondary gain of cost avoidance, but regardless of cost avoidance, 

they would have carried out the initiatives. BOP reported these cost 

containment initiatives or systems again in its fiscal year 2018 

Congressional Budget Justification (see table 9).
Page 40 GAO-17-379 BOP Health Care Costs

Table 9: Bureau of Prisons (BOP) Health Care Costs Savings Initiatives as Reported in Fiscal Year 2018 Congressional Budget 

Justification

Initiative, with year 

implemented

BOP Description

Implemented

1. Telehealth [2004]a BOP uses telehealth for the following: to conduct specialty medicine clinics in some 

federal medical centers; to deliver specialty medical services to remote locations; to 

provide psychiatric services and manage psychotropic medications; to consult with 

institutions on dermatological cases to assess need for community services versus 

onsite care; to consult with institutions on dietetics and diabetes; to allow regional 

staff to conduct chronic care visits in their regional institutions; and to facilitate 

chronic care and follow-up visits across facilities in BOP complexes.

2. Levels of Care [2004] BOP assigns each inmate and each BOP facility a care level (i.e., care level 1 = 

essentially healthy; care level 2 = stable chronic conditions; care level 3 = chronic 

conditions with manageable complications; care level 4 = need for continuous 

nursing care). BOP reported that this medical classification system enables it to allot 

its resources to better manage inmates’ medical and mental health needs.

3. Utilization Review [2009] BOP requires every institution to implement a utilization review process to assure 

that only medically necessary care is provided. Health care staff use an automated 

utilization review program for clinical decision-making criteria that aims to 

differentiate between what is medically necessary from what is potentially elective 

care.

4. Catastrophic Case 

Management [2012]b BOP institutions and regional offices monitor cases of hospitalized inmates and track catastrophic costs to closely manage care and expedite inmate transfers to 

BOP medical centers when feasible. 

5. National Pharmacy & 

Therapeutics Committee 

[1996]

BOP’s National Pharmacy & Therapeutics Committee researches drug efficacy and 

safety, and manages a tightly controlled National Drug Formulary that favors 

generic drugs.c

Partially Implemented

6. Electronic Medical Records 

System (Health Information 

Technologies) [FY2008]

BOP-wide deployment of a base electronic medical record was completed in fiscal 

year 2008. The Bureau Electronic Medical Record system (BEMR) includes the 

components of the traditional health record, with a prescription component. It 

utilizes secure wireless technology to bring health care documentation to the 

patient’s bedside on nursing care units and any other area in BOP facilities where 

care is provided (i.e. special housing units). BOP noted that it planned to integrate 

a Laboratory Information System that collects information from BOP’s medical 

laboratories with BEMR, continue to refine processes, and add ancillary 

documentation components in compliance with the Office of the National 

Coordinator for Health Information Technology’s standards.d

Source: GAO analysis of BOP data.  GAO-17-379

a

Telehealth is the use of electronic information and telecommunications technologies to support long 

distance clinical health care, patient and professional health related education, public health and 

health administration. See Health Resources and Services Administration “Telehealth.”

b

While BOP institutions and regional offices monitor cases of hospitalized inmates as they occur, 

BOP Central Office does not systematically track catastrophic care costs over time, and did not 

require the regions to collect this information. GAO requested BOP’s catastrophic data for fiscal years 

2014-2015 but the data were incomplete. In 2016, BOP created a template for its regions to collect 

catastrophic care costs in a more systematic way. This effort remains in progress.
Page 41 GAO-17-379 BOP Health Care Costs

c

The national formulary is a list of medications that can be prescribed and dispensed by BOP 

clinicians without additional authorization from higher-level officials. The National Pharmacy & 

Therapeutics Committee meets regularly to review the national formulary.

d

The Department of Health and Human Services’ Office of the National Coordinator for Health 

Information Technology is responsible for overseeing the certification of electronic health record 

(EHR) technology, including establishing EHR technical standards and certification criteria.

Of the 16 initiatives BOP either identified for us (table 8), or reported in its 

fiscal year 2018 Congressional Budget Justification (table 9), BOP could 

only provide documentation for 1 cost savings estimate, as we show in 

table 10. BOP provided documentation demonstrating the analysis for its 

estimated cost savings for the initiative to contract for its dental lab 

operations.61 BOP officials stated that BOP does not have a process to 

evaluate cost savings and that evaluating all of its initiatives would be 

very labor intensive. BOP officials also told us that they can sometimes 

assume cost savings. For example, BOP implemented a system of 

medical and mental health care levels for its institutions and inmates to 

match health care needs to health care resources. According to BOP 

officials, the cost control results of this initiative can be assumed; 

however, in internal BOP documentation, officials acknowledge that 

although the system was designed to reduce cost, its results are 

undetermined. BOP officials stated that BOP does not have an automated 

data system to collect and analyze cost savings data in this manner.

Table 10: Bureau of Prisons (BOP) Health Care Cost Savings Initiatives with Cost 

Savings Estimates (Fiscal Year 2009 through November 2016)

Number of Initiatives Number of Initiatives with 

Documented Cost Savings 

Estimates

Implemented 8 1a

Partially Implemented 4 0

Planned 4 0

Total 16 1

Source: GAO analysis of BOP data.  GAO-17-379

a

BOP provided documentation for its estimated cost savings for the initiative to transition dental lab 

operations to an outside vendor.

 61BOP provided its methodology for estimating cost savings for three planned cost 

savings initiatives—Federal Ceiling (Big 4) Price, BOPMOP, and Unit Dose 

Repackaging—but did not provide documentation of analysis to support its cost savings 

estimate. 
Page 42 GAO-17-379 BOP Health Care Costs

BOP had previously developed a process for collecting and analyzing 

cost data without automated data systems. Specifically, In 2011, in 

response to a DOJ OIG recommendation, BOP reported to the OIG that it 

had established a four-step process to collect and analyze data to 

determine the cost-effectiveness of current and future health care cost 

control initiatives for which BOP has or can collect data.62 As part of the 

process, BOP reported that it would implement the following four steps: 

(1) generate an initiative for HSD and/or BOP executive staff approval; (2) 

identify factors to measure an approved initiative’s outcomes and 

establish benchmarks; (3) capture relevant and available program and 

cost data (to the extent possible using existing data systems) on at least 

an annual basis; and (4) analyze the data and produce cost-benefit 

reports for HSD leadership. At that time, BOP listed seven initiatives it 

could evaluate using this process, and it provided evidence to the OIG 

that it had used this process to evaluate one of those seven initiatives. As 

a result, an OIG official told us the OIG closed the recommendation. 

However, BOP officials told us they have not continued to use this 

process to determine the cost-effectiveness of its initiatives, and do not 

have a process in place to determine the cost-effectiveness of its 

initiatives. When we asked BOP officials about the process, as described 

to the OIG, they told us that they were unaware of its existence until we 

inquired about its use. Standards for Internal Control in the Federal 

Government calls for management to design control activities to achieve 

its objectives, including evaluations to compare actual performance to 

planned or expected results.63 By regularly evaluating health care cost 

control initiatives for which it has or can collect data, BOP would be better 

positioned to determine if the time and resources it is investing to control 

costs has been effective, or whether it should alter its path to achieve 

better outcomes.

Regional and Institutional Initiatives

Some of BOP’s regions and institutions have also undertaken various 

initiatives that officials described as having a cost control impact. BOP 

officials told us that regions and institutions make decisions about 

whether and which initiatives to implement based on institutions’ varied 

 62U.S. Department of Justice Office of Inspector General, The Federal Bureau Of Prisons’

Efforts To Manage Inmate Health Care, Audit Division 08-08 (Washington, D.C.: February 

2008).

63GAO, Standards for Internal Control in the Federal Government, GAO-14-704G

(Washington, D.C.: Sep. 10, 2014). 
Page 43 GAO-17-379 BOP Health Care Costs

needs and circumstances. For example, BOP encourages institutions to 

use contract guards, rather than BOP correctional officers, to supervise 

inmates during treatment in community medical facilities. According to 

BOP officials from some institutions we visited, the use of contract guards 

can result in cost savings when compared to overtime costs paid to 

salaried correctional officers.64 However, some institution officials told us 

that security concerns and emergent medical conditions affect their ability 

to use contract guards. In addition, officials from several of the institutions 

we visited said they reduce inmate custody and transportation costs by 

transporting inmates in groups by bus when they require outside health 

care. An institution’s ability to use busing may depend on inmates’

medical needs or the willingness of community providers to accommodate 

several inmates, according to officials.

Additionally, within individual institutions, some BOP officials have 

developed innovative cost control initiatives. For example, one official in 

an institution we visited said he had created metrics to measure and 

manage health care costs, including pharmaceutical costs, as well as the 

number of outside medical trips, and outside medical service costs, and 

then successfully took action to quantify reductions across all three. Also, 

one regional official said he created a mobile ophthalmology clinic to 

provide specialty eye services to institutions throughout the region and 

estimated costs savings in service charges and custody costs for each 

visit. In another example, officials at one FMC we visited told us they 

expanded the physical therapy program in various ways to control costs. 

For example, the program offers its specialized staff to consult on cases 

in other institutions, utilizes unpaid physical therapy interns, and 

encourages its staff to specialize to perform procedures that would 

otherwise take place outside the institution, such as electromyography,65

according to officials.66

BOP institutions have also sought to use technology to control health care 

costs. Notably, officials at FMC Lexington said that they have a 

partnership with an outside medical services provider, which provides the 

 64BOP did not have a cost savings estimate but institution officials noted lower overtime 

costs due to this practice. 

65Electromyography is a diagnostic test to assess the health of muscles and the nerve 

cells that control them.

66BOP did not have documentation to demonstrate this cost savings but institution officials 

explained that these initiatives controlled the institution’s health care costs. 
Page 44 GAO-17-379 BOP Health Care Costs

institution with some advanced telehealth equipment (see fig. 6). This has 

allowed it to expand its use of telehealth to more than twenty medical 

specialties. For fiscal year 2015, FMC Lexington officials estimated a cost 

savings of over $1.5 million due to their use of telehealth. Many 

institutions have also sought to acquire other kinds of equipment to 

control health care costs. For example, some institutions have purchased 

or leased robotics to support their pharmaceutical operations (see fig. 7), 

which has reduced the burden on staff to manually fill prescriptions and 

improve operational efficiency. According to BOP officials, the use of 

robotics equipment in its institutions’ pharmacies allows BOP pharmacists 

to devote more time to improving patient outcomes by providing clinical 

pharmacist services. Officials in another FMC we visited told us they 

purchased a pressure mapping system for the institution’s wound 

program to identify and prevent ulcers, which institution officials estimate 

has saved nearly $2.8 million for the period covering fiscal year 2009 

through 2015.
Page 45 GAO-17-379 BOP Health Care Costs

Figure 6: Federal Medical Center Lexington Utilizes Specialized Telehealth 

Equipment to Conduct Specialty Clinics
Page 46 GAO-17-379 BOP Health Care Costs

Figure 7: Some Bureau of Prisons (BOP) Institutions Utilize Pharmacy Robotics to 

Reduce the Use of Manual Labor to Dispense Medication

According to officials, institutions share and learn about one another’s 

approaches to health care cost control through various platforms. For 

example, BOP compiles its institutions’ reported cost efficiencies and 

innovations, including those related to health care, in a catalogue that is 

designed to be a reference to all institution managers regarding the 

activities of their peers. Institution officials also share information on 

health care cost control through regular conferences and meetings. For 

example, officials at one institution we visited stated that they employ the 

practice of having an institution nurse check on hospitalized inmates on a 

weekly basis to determine if they can return to the institution to complete 

their care in order to avoid custody and hospitalization costs. The officials 

using this practice said they presented it at a BOP symposium where 

officials from other institutions also presented their best health care 

practices. Officials also told us that as BOP officials transfer from one 

institution to another, they can also transfer information about health care

cost control.
Page 47 GAO-17-379 BOP Health Care Costs

BOP’s long-standing strategic planning process has focused in some part 

on health care cost control, but BOP’s overall planning practices have not 

incorporated certain elements of sound planning that we have previously 

identified. These elements generally call for the identification of objectives 

with a means to measure (1) progress toward objectives and (2) the 

effectiveness of activities to achieve objectives. They also call for the 

identification of resources and investments (as shown in table 11).67

Table 11: Elements of Sound Planning Applicable to GAO’s Assessment of the Bureau of Prisons’ Planning Process

Elements Description

Goals and objectives, activities, 

milestones, and performance 

measures

The identification of goals and objectives to be achieved by the plan, activities, or actions to 

achieve those results, as well as milestones to measure progress and performance

measures to assess the effectiveness of activities.

Resources and investments The identification of costs to execute the plan and the sources and types of resources and 

investments, including skills and technology and the human, capital, information, and other 

resources required to meet the goals and objectives.

Source: GAO.  GAO-17-379

As part of its annual BOP-wide strategic plans, BOP developed the HSD 

Cost Efficiency and Innovation strategic objective to “maximize health 

care resources as a cost-containment strategy by applying evidencebased business practices and measuring performance through the use of 

appropriate industry-wide metrics.”68 However, this objective does not 

include measures of effectiveness or progress, such as milestones or 

performance measures, which, when properly supported by reliable data, 

are critical to effectively measuring improvement. BOP established this 

objective in 2011 with six underlying activities it refers to as action plans. 

BOP officials told us that a strategic objective is considered achieved 

 67We selected these elements from GAO’s body of work on sound planning based on their 

applicability to BOP documents and officials’ statements on sound planning. GAO has 

also reported on other elements in sound planning, including the identification of a mission 

statement; problem, scope and methodology; integration among and with other entities; 

roles, responsibilities and coordination; key external factors. See GAO, Executive Guide: 

Effectively Implementing the Government Performance and Results Act, 

GAO/GGD-96-118 (Washington, D.C.: June 1996); Combating Terrorism: Evaluation of 

Selected Characteristics in National Strategies Related to Terrorism, GAO-04-408T 

(Washington, D.C.: Feb. 3, 2004); and Veterans’ Health Care: Proper Plan Needed to 

Modernize System for Paying Community Providers, GAO-16-353 (Washington, D.C.: 

May 11, 2016). 

68BOP changed the name of this objective in its 2015 BOP-wide strategic plan. It had 

been previously named “Healthcare Efficiency.” There are other strategic objectives that 

relate to health care cost control, including Care Levels, BEMR, and Telehealth. 

BOP Has Planned and 

Implemented Initiatives 

without Considering 

Certain Elements of 

Sound Planning
Page 48 GAO-17-379 BOP Health Care Costs

when the action plans are completed. However, simply completing an 

action plan does not ensure progress toward the achievement of the 

objective. For example, one of BOP’s action plans under its HSD Cost 

Efficiency and Innovation strategic objective was to develop a 

methodology for ensuring health care expenditures reflect actual costs. 

BOP established nine metrics to evaluate financial performance and 

marked this action plan as “complete” in 2013. However, as of August 

2016, BOP officials told us that they have not been able to collect 

comprehensive data for six of the nine metrics because of limitations to 

BOP’s existing data systems or incomplete reporting. Moreover, BOP 

officials recognized the issues with this action because they stated that 

they are reconsidering the metrics they initially established. Thus, while 

BOP determined it had completed this action plan, the action itself did not 

produce any meaningful results. Although it is important for BOP to plan 

the actions or activities that it will take to achieve its objectives, it cannot 

rely only on the completion of activities to determine that it is achieving 

them. Without a means to measure progress toward its objective or 

effectiveness of its activities, BOP cannot reliably determine whether it is 

achieving its objective or that its efforts are effective. Determining whether 

or not BOP is making progress toward its HSD Cost Efficiency and 

Innovation strategic objective and whether its efforts are effective will also 

allow BOP management to determine what midcourse corrections may be 

needed in order to meet the objective.

In addition to the annual BOP-wide strategic plan, HSD established a fiveyear HSD Integrated Strategic Plan for the period of 2015 through 2019, 

which applies a financial management focus to every HSD branch and 

section. The financial management goal, which is the same for every 

HSD branch and section, is to “effectively manage the Health Services 

budget through an ongoing analysis of staffing, program efficiencies, and 

utilization of services to identify opportunities for current and future cost 

containment.” Although HSD includes the financial management goal for 

each HSD branch or section, as well as the branch or section’s 

implementation strategies and expected outcomes, the expected 

outcomes are generally not measurable. For example, the description of 

the financial management goal for HSD’s Health Services Branch is to 

“employ new strategies to contain health care costs while maintaining 

quality of services” and the expected outcome is “BOP health care costs 

are strategically contained.” HSD does not indicate how it will measure 

progress toward its larger goal, and its expected outcome provides no 

means of measuring progress. By stating that it aims to contain costs 

strategically, but not including performance measures to assess the 

effectiveness of activities—HSD’s planning efforts do not incorporate the 
Page 49 GAO-17-379 BOP Health Care Costs

elements of sound planning we have noted. Out of the 17 HSD branches

and sections included in the HSD integrated strategic plan, only one—

Pharmacy—included target benchmarks for financial management.

BOP officials told us that because BOP’s per capita inmate health care 

costs are lower than the national health expenditure average per capita 

costs, BOP believes its efforts have successfully achieved cost savings. 

However, BOP’s health care obligations exceeded $1.3 billion in fiscal 

year 2016, which is a significant portion of its nearly $6.9 billion 

appropriation, and its per capita health care obligations have continued to 

rise, particularly since 2013, which highlight the importance of controlling 

health care costs regardless of societal trends in health care spending.69

Developing goals and objectives that include a means to measure 

progress would better position BOP management to assess its efforts to 

control health care costs and ensure these efforts are effective in 

achieving desired results.

As described previously, sound planning also calls for the identification of 

necessary resources and investments. BOP officials acknowledged that 

they do not systematically plan health care cost savings initiatives. As a 

result, BOP has not consistently identified the necessary resources and 

investments needed to implement its cost savings initiatives, or the 

external factors that could affect the achievement of its goals prior to 

implementation. For example, since 2011, BOP has planned to establish 

a mail-order or central fill pharmacy. BOP asserted that establishing a 

mail-order or central fill pharmacy would help it maximize pharmacy 

resources by consolidating prescription drugs into one main inventory. 

BOP reported in its Congressional Budget Justification for fiscal year 

2017 that this effort could save BOP $10 million per year in inventory 

costs.70 To implement this initiative, BOP began restructuring its 

pharmaceutical operations at its care level 1 institutions, with plans to 

continue doing so with care level 2 institutions. Two years later, in 2013, 

BOP noted that the costs of this initiative would exceed available agency 

funding and BOP would have to request additional funding from the 

Congress to support the initiative. When we asked BOP officials why the 

initiative had not yet been implemented, they told us that in any given 

 69The nearly $6.9 billion appropriation is for the Salaries and Expenses portion of BOP’s 

fiscal year 2016 annual appropriation and does not include the separate Buildings and 

Facilities appropriation for fiscal year 2016. 

70BOP provided its methodology for estimating the cost savings but did not have 

documentation for the analysis of this estimate.
Page 50 GAO-17-379 BOP Health Care Costs

year when BOP sought to implement this initiative, it had either the 

funding or the space, but not both at the same time. Because BOP did not 

consider necessary resources and investments when this initiative was 

planned this initiative was not implemented earlier. Without consistently 

identifying the investments and resources needed, BOP risks expending 

unnecessary time and limited resources pursuing cost control initiatives 

that eventually may fail to achieve their goal of cost control.

BOP employs a process every 3 to 4 years that it calls its “mission 

analysis,” to assess how effectively the care it provides meet the needs of 

inmates having complex medical and mental health disorders in its FMCs. 

BOP officials told us that they make decisions about how to allocate 

resources based on mission analyses; however, BOP does not document 

these analyses and therefore lacks a record to support decision-making 

for its resource allocations. During mission analysis, BOP seeks to 

determine how effectively its health care programs, resources, and 

community-based services meet the needs of inmates, determine 

priorities, assess potential efficiencies, and make recommendations for 

change. To conduct a mission analysis, BOP also conducts a cost 

assessment, which officials described as including a review of outside 

medical trips, contracted services, elective procedures, and overtime for 

escorted medical trips to community-based facilities and providers. BOP 

officials stated that the cost analysis team also reviews relevant 

documents with the local staff responsible for these activities, and gives 

an oral report once it concludes its work. As a result of these mission 

analyses, BOP institutions have adjusted or added new health care 

programs. For example, FMC Butner officials stated that after a mission 

analysis was completed there, BOP saw the need for, and subsequently 

established, hospice care services. Also, according to BOP, the mission 

analysis can provide officials with the information needed to consolidate 

or shift resources from one care level 4 institution to another. BOP 

recently made this kind of shift in resources in December 2016 when it 

converted Federal Correctional Institution Fort Worth to a Federal Medical 

Center and has already requested 36 full-time equivalents and over $4.7 

million to expand and renovate the facility.

When we asked BOP for more information on how they conduct the 

mission analysis process or examples of written materials that guided 

their decision making, BOP officials told us they only document what 

participants consider the highlights in an executive summary. For 

example, the 2016 mission analysis for FMC Rochester that BOP 

provided to us was an overview of its health care services and staffing, 

BOP Does Not Document 

Its Mission Analyses of Its 

Federal Medical Centers
Page 51 GAO-17-379 BOP Health Care Costs

and recommendations for consideration. While the summary included 

recommendations, it did not include the analysis and findings to support 

the recommendations. BOP officials stated that the mission analysis was 

an opportunity for Central Office, region and institution leadership to meet 

and verbally discuss the status of the institution’s missions, challenges, 

resources and ongoing activities. Nevertheless, Standards for Internal 

Control in the Federal Government calls for documentation as a 

necessary part of an effective internal control system, which is required to 

demonstrate its design, implementation and operating effectiveness.71

Documenting its analyses and findings could help provide reasonable 

assurance that recommendations to shift resources at its higher care level 

institutions are based on sound evidence. According to BOP data, those 

higher care level institutions account for a sizable portion of medical 

services costs. Specifically, BOP’s six care level 4 institutions—prior to 

adding Fort Worth to this list—accounted for about $350 million (or about 

30 percent) of BOP’s medical services costs for fiscal year 2015 while 

housing about seven percent of the inmate population.

Providing health care, including medical, dental, and mental health care, 

to the federal inmate population is an important and required part of 

BOP’s broader mission to safely, humanely, and securely confine 

offenders in prisons. While BOP’s inmate population has fallen since 

fiscal year 2014, health care costs have continued to increase in total, 

and on an annual per capita basis, due in part to factors that BOP cannot 

control, such as the aging inmate population, increasing pharmaceutical 

costs, and increasing costs of medical care in the community. Given the 

fiscal pressures facing BOP, as well as the rest of the government, it is 

critical that the agency focus its efforts on factors within its sphere of 

influence to ensure the prudent use of resources. 

In many ways, BOP’s efforts to understand and control its costs have 

been thwarted by limited data or limited applications of data already 

available. Although BOP recognizes the need for health care utilization 

data, and has identified a number of options for collecting these data, it 

has not yet assessed the most cost effective approach for obtaining such 

data. Conducting a cost-effectiveness analysis of the competing 

alternative solutions, and taking steps toward implementation of the most 

effective solution, would allow BOP to dedicate its resources judiciously. 

 71GAO-14-704G.

Conclusions
Page 52 GAO-17-379 BOP Health Care Costs

Further, while BOP has engaged other federal agencies to leverage 

purchasing power, it has not consistently collected and analyzed health 

care spending data across its institutions. Conducting a comprehensive 

spend analysis could help BOP identify additional strategic sourcing 

opportunities to acquire medical goods and services more efficiently.

In addition, BOP has undertaken various initiatives to control health costs 

but does not have assurance that these initiatives are achieving their cost 

control aim because it has not evaluated its initiatives on a regular basis. 

BOP has also not incorporated certain elements of sound planning into its 

strategic health care plans, including identifying a means to measure 

progress toward goals and objectives and a means to measure 

effectiveness of activities. BOP also has not identified the resources and 

investments needed to implement its initiatives, an additional element of 

sound planning that can help ensure successful implementation. By 

incorporating these sound planning elements, BOP could enhance its 

planning and implementation efforts before expending resources, better 

positioning itself for success as it aims to control health care costs.

Finally, when BOP sets out to make decisions about how to shift or 

consolidate resources—as it does when conducting its mission 

analyses—it does not document its analyses and findings to support its 

recommendations for decisions about resources. Strengthening this 

process would enhance its internal control system and better support the 

decisions it makes.

We recommend that the Director of BOP take the following five actions:

1. To better understand the available opportunities for collecting inmate 

health care utilization data, BOP should conduct a cost-effectiveness 

analysis of potential solutions, and take steps toward implementation 

of the most effective solution.

2. To better understand the available opportunities for controlling health 

care costs, BOP should implement its guidance to conduct “spend

analyses” of BOP’s health care spending, using data sources already 

available.

3. To determine the actual or likely effectiveness of its ongoing or 

planned health care cost control initiatives, BOP should evaluate the 

extent to which its initiatives achieve their cost control aim.

Recommendations for 

Executive Action
Page 53 GAO-17-379 BOP Health Care Costs

4. To enhance its strategic planning for and implementation of health 

care cost control efforts, BOP should incorporate elements of a sound 

planning approach and

• establish a means of measuring progress toward and 

effectiveness of its activities for its current strategic objectives and 

goals related to controlling health care costs; and

• identify the resources and investments necessary for 

implementation of its planned health care cost control initiatives.

5. To improve the reliability and utility of its Federal Medical Center 

mission analyses, BOP should document the analyses and findings 

that underlie its recommendations.

We provided a draft of this report to DOJ for review and comment. DOJ 

did not provide official written comments to include in this report. 

However, in an e-mail received on June 20, 2017, a DOJ official stated 

that BOP concurred with all five recommendations. 

BOP also provided technical comments, which we incorporated as 

appropriate.

We are sending copies of this report to the Attorney General, selected 

congressional committees, and other interested parties. In addition, this 

report is also available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any further questions about this report, please 

contact me at (202) 512-8777 or goodwing@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this report. Key contributions to this reported are listed 

in appendix IV.

Gretta L. Goodwin

Director, Homeland Security and Justice Issues

Agency Comments 

and Our Evaluation
Appendix I: Objectives, Scope, and 

Methodology

Page 54 GAO-17-379 BOP Health Care Costs

Our objectives for this report were to examine: (1) how much the Bureau 

of Prisons (BOP) has obligated for inmate health care from fiscal years 

2009 through 2016 and the factors that affect BOP’s costs, (2) the extent 

to which BOP has data available to understand and help control its costs, 

and (3) the initiatives BOP has identified and implemented to help control 

health care costs and the extent to which BOP has effectively planned its 

health care cost control efforts.

To examine how much BOP has obligated for inmate health services over 

the past 8 fiscal years and the factors that have affected BOP’s costs, we 

interviewed officials from BOP’s Administration Division, Health Services 

Division (HSD), Psychology Services Branch, and Field Acquisition 

Office, as well as officials within BOP’s six regional offices and at the 10 

individual BOP institutions we visited, to understand why obligations have 

changed over time and the factors that have impacted those changes.1

We selected the 10 BOP institutions to visit based in part on factors that 

both BOP and existing research indicated could be affecting costs, as 

well as other factors that allowed for variation in our sample. These 

factors included the institutions’ medical care levels; their total and per 

capita medical services costs; the characteristics of the institutions’

population, including gender and percentage of inmates age 55 or older; 

and geography.2 The 10 institutions we visited encompassed all four 

medical care levels, had a range of per capita medical services costs 

from low to high, included both male and female populations, housed 

lower and higher percentages of inmates age 55 or older, were located in 

remote and metropolitan areas, and covered all six of BOP’s regions. 

Although not generalizable, the visits provided important insight into how 

different institution and inmate characteristics impact costs. In addition, 

we reviewed key documents, such as BOP’s Congressional Budget 

Justifications for fiscal years 2009 through 2018, BOP’s Annual Financial 

 1

The institutions we visited were United States Penitentiary Atwater, Federal Correctional 

Complex Beaumont, Federal Correctional Complex Butner, Federal Medical Center 

Carswell, Federal Correctional Complex Coleman, Federal Correctional Institution Fort 

Dix, Federal Correctional Institution Fort Worth, Federal Medical Center Lexington, 

Metropolitan Correctional Center New York, and Federal Medical Center Rochester. At the 

time of our visit, Fort Worth was a Federal Correctional Institution, but later became a 

Federal Medical Center. 

2

We computed the average age of inmates for each individual institution and calculated 

the percentage of inmates age 55 or older. We picked the age of 55 based on discussions 

with BOP officials, subject matter experts, and on academic and trade organization 

papers, who noted that 55 and older is generally the age at which inmates experience 

health problems related to aging. We then aggregated this information for BOP overall. 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 55 GAO-17-379 BOP Health Care Costs

Statements, and the Department of Justice’s Financial Management 

Information System Sub-Object Classification (SOC) Code Guide.3

We also analyzed BOP obligation data from fiscal year 2009 to 2016 on 

medical services, psychology services, drug and sex offender treatment 

programs, and medical staff training.4 We included 8 years of obligations 

data in order to observe trends over time in health care costs. We 

decided to be inclusive of all categories of health care that are considered 

to be essential to treating health, which includes mental health and 

substance use disorder treatment. To determine the per capita 

obligations, we divided the total obligation by the inmate population at the 

end of each fiscal year. To adjust the per capita obligations for inflation, 

we used fiscal year 2016 as the baseline and adjusted each prior year to 

2016 dollars by the Bureau of Economic Analysis and the IHS Global 

Insight Outlook inflation factor.5 To better understand the composition of 

medical services obligations, we analyzed the breakout of these 

obligations by SOC code. Specifically, we used the SOC Code Guide to 

understand the various codes and how they could be grouped. We settled 

on five overarching categories: (1) salaries and benefits for medical staff, 

as well as related employee expenses, such as work travel; (2) outside 

medical care, which includes contractual medical services provided both 

inside and outside of BOP institutions by non-BOP medical staff; (3) 

supplies and materials, which includes pharmaceutical purchasing and 

other materials used in the provision of health services; (4) equipment of 

a durable nature, such as tools and implements, machinery, and 

information technology hardware; and (5) other, for all obligations that did 

not fit into the other categories, such as transportation of things, rent, 

communications, utilities, printing, and insurance claims.

To better understand the changes in pharmaceutical obligations over our 

time period, and what illnesses were impacting those obligations, we 

analyzed BOP’s list of top 50 medications for fiscal years 2009 through 

2016, and compared the medications to the U.S. National Library of 

Medicine’s MedlinePlus list of drugs and supplements in order to 

 3

Federal agencies use SOC Code Guides to standardize budgetary information. SOC 

codes define the nature of services or articles obligated.

4

BOP includes dental services as part of medical services. 

5

IHS Global Insight is a firm that provides comprehensive economic and financial 

information on countries, regions, and industries. 
Appendix I: Objectives, Scope, and 

Methodology

Page 56 GAO-17-379 BOP Health Care Costs

determine the uses.6 We compiled a list of medications used to treat 

hepatitis C, cancer, human immunodeficiency virus/acquired immune 

deficiency syndrome (HIV/AIDS), and psychotropic medications, which 

are generally used to treat mental illness. The remaining medications 

were used to treat a variety of illnesses, or were too few to create a 

category. We therefore created a category of other for the remaining 

medications. To assess the reliability of BOP’s obligations and 

expenditures data, we (1) performed electronic data testing and looked 

for obvious errors in accuracy and completeness, and (2) interviewed 

agency officials knowledgeable about BOP’s budget to determine the 

processes in place to ensure the integrity of the data. We determined that 

the data were sufficiently reliable for the purposes of this report. Finally, 

since geographic location may impact the provision or cost of inmate 

health care, we analyzed BOP institutions’ proximity to hospitals.7 To do 

this, we used geographic information services software to map the 

addresses of all BOP institutions, and verify how many hospitals were 

within a 20 mile radius of the institution.8 We created four categories—

institutions that had no hospitals within 20 miles, institutions that had 1 to 

5 hospitals within 20 miles, institutions that had 6 to 10 hospitals with 20 

miles, and institutions that had 11 or more hospitals within 20 miles.

To examine the extent to which BOP has data available to understand 

and help control its costs, the initiatives BOP has implemented and 

identified to help control health care costs, and how effectively BOP has 

planned and implemented these initiatives, we reviewed relevant BOP 

program statements. We conducted interviews with BOP officials from the 

Health Services, Reentry Services, and Information, Policy, and Public 

Affairs Divisions, as well as the Office of General Counsel in BOP’s 

 6

MedlinePlus, produced by the National Library of Medicine, is the National Institutes of 

Health’s web site that contains extensive information on prescription and nonprescription 

drugs, in addition to information on over 1,000 diseases and conditions. 

7

For the purposes of our analysis, a hospital is defined as a building or building complex 

providing general medical or surgical inpatient care. It includes general hospitals, specialty 

hospitals (such as cancer, maternity, substance abuse, psychiatric, and rehabilitation 

hospitals). It does not include psychiatric or behavioral facilities that are not hospitals, 

long-term care medical centers or nursing homes, walk-in centers or outpatient clinics, 

imaging centers, medical doctors’ offices, and rehabilitation centers.

8

BOP has 122 BOP-operated institutions, 39 of which are located in one of 15 Federal 

Correctional Complexes (FCC). FCCs are a cluster of institutions with different missions 

(for example, medical/mental health, pretrial, and holdover), which are located together. 

Because they are located together, for the purposes of this analysis we counted an FCC 

as one institution. When counting an FCC as one institution, there are 98 BOP institutions.
Appendix I: Objectives, Scope, and 

Methodology

Page 57 GAO-17-379 BOP Health Care Costs

Central Office, given their responsibilities in this arena. We also 

interviewed officials from each of the six BOP regions and the Field 

Acquisition Office. Further, we reviewed current Office of Management 

and Budget (OMB) and BOP policies on cost-effectiveness analysis to 

analyze BOP’s efforts to gather data. Additionally, for background on 

correctional health care costs and BOP health care, we reviewed articles 

and reports from various organizations, including the Congressional 

Budget Office, Congressional Research Service, and several academic 

and research institutes and interviewed researchers and economists from 

some of them to understand their methodologies and explore their 

findings. Further, we interviewed two correctional health clinicians from 

non-federal medical institutions due to their knowledge of the aging 

inmate population and telehealth. To determine the extent of available 

data on BOP health care costs, we searched the Federal Procurement 

Data System-Next Generation (FPDS-NG) for BOP contract actions by 

institution for fiscal years 2009 through 2015 and obtained 

pharmaceutical obligations data from BOP for that same period. Based on 

these steps, we determined the data were sufficiently reliable for the 

purposes of our reporting objective. In addition to interviews, to determine 

how well BOP’s health care cost control planning mechanisms work, we 

obtained and reviewed selected portions of the annual BOP-wide 

strategic plans, the BOP’s HSD Governing Board Meeting Minutes 

through 2015, and the HSD Strategic Plan for 2015 through 2019. To 

identify BOP’s health care cost control efforts, their status of 

implementation, and the extent to which BOP had conducted cost 

estimates for each, we relied on the testimonial and documentary 

evidence the aforementioned BOP officials provided, reviewed previous 

GAO reports, Department of Justice (DOJ) Office of Inspector General 

(OIG) reports, and BOP Congressional Budget Justifications for fiscal 

years 2009 through 2018.9 We summarized this information into a data 

collection instrument for verification by BOP officials and requested 

additional data and supporting documentation for each. We reviewed the 

information BOP provided in the data collection instrument to identify 

missing or unclear information and resubmitted the data collection 

instrument for BOP’s secondary verification. We also interviewed officials 

 9

See for example: GAO, Bureau of Prisons: Information on Efforts and Potential Options 

to Save Costs, GAO-14-821 (Washington, D.C.: Sept. 30, 2014). DOJ OIG, The Federal 

Bureau of Prison’s Efforts to Manage Inmate Health Care, Audit Report 08-08 

(Washington, D.C.: Feb. 2008); and Follow-Up Audit of the Federal Bureau of Prisons’

Efforts to Manage Inmate Health Care, Audit Report 10-30 (Washington, D.C.: July 2010). 
Appendix I: Objectives, Scope, and 

Methodology

Page 58 GAO-17-379 BOP Health Care Costs

from DOJ OIG and DOJ’s Justice Management Division10 to discuss prior 

report recommendations on BOP health care costs. Further, at the 10 

institutions we visited, we interviewed institution officials and observed 

health care programs and cost control efforts. We also requested and 

obtained several documents relating to the costs and cost savings of 

regional and institutional initiatives to control health care costs.

We conducted this performance audit from February 2016 to June 2017 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 10DOJ’s Justice Management Division (JMD) provides DOJ with advice on policy for 

budget and financial management, program evaluation, auditing, personnel management 

and training, procurement, information processing and telecommunications, security and 

for all matters pertaining to organization, management, and administration. In 2012, JMD 

budget staff issued an assessment of BOP’s method for procuring medical services and 

potential ways to reduce costs, including cost savings opportunities. 
Appendix II: Bureau of Prisons (BOP) 

Institutions by Medical Care Level as of March 

2017

Page 59 GAO-17-379 BOP Health Care Costs

Medical care levela Institution nameb Institution location

Care level 1

Atwater USP Atwater, CA

Bennettsville FCI Bennettsville, SC

Berlin FCI Berlin, NH

Big Sandy USP Inez, KY

Herlong FCI Herlong, CA

Lee USP Pennington Gap, VA

Manchester FCI Manchester, KY

McDowell FCI Welch, WV

McKean FCI Lewis Run, PA

Mendota FCI Mendota, CA

Oxford FCI Oxford, WI

Pollock Medium FCI Pollock, LA

Pollock USP Pollock, LA

Ray Brook FCI Ray Brook, NY

Safford FCI Safford, AZ

Sandstone FCI Sandstone, MN

Three Rivers FCI Three Rivers, TX

Yankton FPC Yankton, SD

Yazoo City Low FCI Yazoo City, MS

Yazoo City Medium FCI Yazoo City, MS

Yazoo City USP Yazoo City, MS

Total care level 1 institutions = 21

Care level 2

Alderson FPC Alderson, WV

Aliceville FCI Aliceville, AL

Allenwood Low FCI Allenwood, PA

Allenwood Medium FCI Allenwood, PA

Allenwood USP Allenwood, PA 

Ashland FCI Ashland, KY

Atlanta USP Atlanta, GA

Bastrop FCI Bastrop, TX

Beaumont Low FCI Beaumont, TX

Beaumont Med FCI Beaumont, TX

Beaumont USP Beaumont, TX

Appendix II: Bureau of Prisons (BOP) 

Institutions by Medical Care Level as of 

March 2017
Appendix II: Bureau of Prisons (BOP) 

Institutions by Medical Care Level as of March 

2017

Page 60 GAO-17-379 BOP Health Care Costs

Medical care levela Institution nameb Institution location

Care level 2

Beckley FCI Beckley, WV

Big Spring FCI Big Spring, TX

Brooklyn MDC Brooklyn, NY

Bryan FPC Bryan, TX

Butner Low FCI Butner, NC

Butner Medium I FCI Butner, NC

Butner Medium II FCI Butner, NC

Canaan USP Waymart, PA

Chicago MCC Chicago, IL

Coleman I USP Sumterville, FL

Coleman II USP Sumterville, FL

Coleman Low FCI Sumterville, FL

Coleman Medium FCI Sumterville, FL

Cumberland FCI Cumberland, MD

Danbury FCI Danbury, CT

Dublin FCI Dublin, CA

Duluth FPC Duluth, MN

Edgefield FCI Edgefield, SC

El Reno FCI El Reno, OK

Elkton FCI Lisbon, OH

Englewood FCI Littleton, CO

Estill FCI Estill, SC

Fairton FCI Fairton, NJ

Florence ADMAX USP Florence, CO

Florence FCI Florence, CO

Florence High USP Florence, CO

Forrest City Low FCI Forrest City, AR

Forrest City Medium FCI Forrest City, AR

Fort Dix FCI Fort Dix, NJ

Fort Worth FMC Fort Worth, TX

Gilmer FCI Glenville, WV

Greenville FCI Greenville, IL

Guaynabo MDC Guaynabo, PR

Hazelton FCI Bruceton Mills, WV

Hazelton USP Bruceton Mills, WV

Honolulu FDC Honolulu, HI
Appendix II: Bureau of Prisons (BOP) 

Institutions by Medical Care Level as of March 

2017

Page 61 GAO-17-379 BOP Health Care Costs

Medical care levela Institution nameb Institution location

Care level 2

Houston FDC Houston, TX

Jesup FCI Jesup, GA

La Tuna FCI Anthony, TX

Leavenworth USP Leavenworth, KS

Lewisburg USP Lewisburg, PA

Lexington FMC Lexington, KY

Lompoc FCI Lompoc, CA

Lompoc USP Lompoc, CA

Loretto FCI Loretto, PA

Los Angeles MDC Los Angeles, CA

Marianna FCI Marianna, FL

Marion USP Marion, IL

McCreary USP Pine Knot, KY

Memphis FCI Memphis, TN

Miami FCI Miami, FL

Miami FDC Miami, FL

Milan FCI Milan, MI

Montgomery FPC Montgomery, AL

Morgantown FCI Morgantown, WV

New York MCC New York, NY

Oakdale I FCI Oakdale, LA

Oakdale II FCI Oakdale, LA

Oklahoma City FTC Oklahoma City, OK

Otisville FCI Otisville, NY

Pekin FCI Pekin, IL

Pensacola FPC Pensacola, FL

Petersburg Low FCI Hopewell, VA

Petersburg Medium FCI Hopewell, VA

Philadelphia FDC Philadelphia, PA

Phoenix FCI Phoenix, AZ

San Diego MCC San Diego, CA

Schuylkill FCI Minersville, PA

Seagoville FCI Seagoville, TX

Seatac FDC Seattle, WA

Sheridan FCI Sheridan, OR

Talladega FCI Talladega, AL
Appendix II: Bureau of Prisons (BOP) 

Institutions by Medical Care Level as of March 

2017

Page 62 GAO-17-379 BOP Health Care Costs

Medical care levela Institution nameb Institution location

Care level 2

Tallahassee FCI Tallahassee, FL

Terminal Island FCI San Pedro, CA

Terre Haute FCI Terre Haute, IN

Terre Haute USP Terre Haute, IN

Texarkana FCI Texarkana, TX

Thomson Administrative USP Thomson, IL

Tucson FCI Tucson, AZ

Tucson USP Tucson, AZ

Victorville Medium I FCI Victorville, CA

Victorville Medium II FCI Victorville, CA

Victorville USP Victorville, CA

Waseca FCI Waseca, MN

Williamsburg FCI Salters, SC

Total care level 2 institutions = 96

Care level 3

Allenwood Medium FCI Allenwood, PA

Allenwood USP Allenwood, PA

Butner FMC Butner, NC

Butner Low FCI Butner, NC

Butner Medium I FCI Butner, NC

Butner Medium II FCI Butner, NC

Carswell FMC Fort Worth, TX

Coleman I USP Sumterville, FL

Coleman II USP Sumterville, FL

Coleman Medium FCI Sumterville, FL

Devens FMC Ayer, MA

Fort Worth FMC Fort Worth, TX

Lexington FMC Lexington, KY

Rochester FMC Rochester, MN

Springfield MCFP Springfield, MO

Terminal Island FCI San Pedro, CA

Terre Haute FCI Terre Haute, IN

Terre Haute USP Terre Haute, IN

Tucson USP Tucson, AZ

Victorville USP Victorville, CA

Total care level 3 institutions = 20
Appendix II: Bureau of Prisons (BOP) 

Institutions by Medical Care Level as of March 

2017

Page 63 GAO-17-379 BOP Health Care Costs

Medical care levela Institution nameb Institution location

Care level 4

Butner FMC Butner, NC 

Carswell FMC Fort Worth, TX

Devens FMC Ayer, MA

Fort Worth FMC Fort Worth, TX

Lexington FMC Lexington, KY

Rochester FMC Rochester, MN

Springfield MCFP Springfield, MO

Total care level 4 institutions = 7

Legend:

FCC refers to Federal Correctional Complex

FCI refers to Federal Correctional Institution

FDC refers to Federal Detention Center

FMC refers to Federal Medical Center

FPC refers to Federal Prison Camp

FTC refers to Federal Transfer Center

MCC refers to Metropolitan Correctional Center

MCFP refers to Medical Center for Federal Prisoners

MDC refers to Metropolitan Detention Center

USP refers to U.S. Penitentiary

Source: BOP.  GAO-17-379

a

BOP classifies both institutions and inmates by care level. BOP does not define the criterion for the 

institution care level but rather bases it on the medical resources available to meet the needs of 

inmates of a particular care level. Generally, institutions at each care level are designed to house 

mostly inmates at that designated medical and mental care level; however, inmates housed at every 

institution will be comprised of a mixture of care levels. According to BOP, factors that affect inmate 

care level variation includes changes in health status, proximity to family, separation from threat 

groups, security level, ongoing legal cases, or participation in residential treatment programs. No 

institution will have an inmate population composed of a given care level.

b

Some institutions are categorized as two different care levels (i.e. care level 1 and 2, or 2 and 3, or 3 

and 4) and therefore are double counted in this table. Additionally, some institutions are complexes 

made up of two or more institutions. The institutions within the complexes are counted separately.
Appendix III: Bureau of Prisons (BOP) Federal 

Medical Centers

Page 64 GAO-17-379 BOP Health Care Costs

BOP has seven care level 4 institutions, also referred to as Federal 

Medical Centers (FMC), spread out throughout the United States.1 The 

FMCs provide care to inmates in need of more advanced medical or 

mental health care. Following are descriptions for each FMC.

• FMC Butner (Butner, North Carolina) is part of an FCC and serves as 

a major medical and psychiatric referral center for male inmates. FMC 

Butner has all specialty areas of medicine and is the primary referral 

center for oncology, providing chemotherapy and radiation therapy. 

FMC Butner also manages a broad range of subacute and chronically 

ill inmates and has an orthopedic surgery program available. Dialysis 

services are provided on-site. Butner also has an extensive inpatient 

forensics program. As of May 2017, there were 927 inmates at FMC 

Butner.

• FMC Carswell (Fort Worth, Texas) serves as the major medical and 

psychiatric referral center for female inmates. All specialty areas of 

medicine are available through in-house staff and community-based 

consultant specialists. As of May 2017, there were 1,171 inmates at 

FMC Carswell.

• FMC Devens (Devens, Massachusetts) serves both medical and 

mental health care needs for male inmates. All specialty areas of 

medicine are available through in-house staff and community-based 

consultant specialists. Additional services provided include dialysis 

treatment for inmates with end-stage renal failure. As of May 2017, 

there were 956 inmates at FMC Devens.

• FMC Fort Worth (Fort Worth, Texas) officially began its medical center 

mission on December 7, 2016. When fully operational, FMC Fort 

Worth will serve both medical and mental health needs of male 

inmates. The institution will expand from 36 to 72 medical beds having 

24-hour nursing care, and will include a 21-bed inpatient forensics unit 

and a care level 3 Mental Health Step Down Unit Program.2 BOP 

anticipates that all necessary building renovations and hiring of 

medical center staff will be completed within 24 months of its formal 

 1

Six of the medical referral centers are named Federal Medical Center (FMC) and one is 

named United States Medical Center for Federal Prisoners. According to BOP, there is no 

salient difference in the medical mission for the seven institutions and therefore all can be 

referred to as FMCs.

2

The Mental Health Step Down Unit Program is a residential treatment program offering 

an intermediate level of care for inmates with serious mental illnesses. The program is 

specifically designed to serve inmates who do not require inpatient treatment, but lack the 

skills to function in a general population setting. 

Appendix III: Bureau of Prisons (BOP) 

Federal Medical Centers
Appendix III: Bureau of Prisons (BOP) Federal 

Medical Centers

Page 65 GAO-17-379 BOP Health Care Costs

conversion to a medical center mission. As of May 2017, there were 

1,492 inmates at FMC Fort Worth.

• FMC Lexington (Lexington, Kentucky) serves male inmates. All 

specialty areas of medicine are available by in-house staff and 

community-based consultant specialists. FMC Lexington serves as 

the primary referral center for inmates with most types of leukemia 

and lymphoma, and performs outpatient forensic studies. As of May 

2017, there were 1,356 inmates at FMC Lexington.

• FMC Rochester (Rochester, Minnesota) serves as a major medical 

and mental health referral center for male inmates. FMC Rochester is 

the primary referral center for inmates with end-stage liver disease 

and advanced HIV infection, as well as other infectious diseases 

requiring long-term management. FMC Rochester provides extensive 

psychiatric and psychology services, including inpatient psychiatry 

services and forensic studies. As of May 2017, there were 665 

inmates at FMC Rochester.

• U.S. Medical Center for Federal Prisoners (MCFP) Springfield 

(Springfield, Missouri) serves as a major medical and psychiatric 

referral center for male inmates. MCFP Springfield provides all 

specialty areas of medicine through in-house staff and communitybased consultant specialists, and is the primary referral center for high 

security inmates. The institution maintains extensive psychiatric and 

psychological services, to include inpatient forensic studies. It is the 

major kidney dialysis center for the BOP. As of May 2017, there were 

1,031 inmates at MCFP Springfield.
Appendix III: Bureau of Prisons (BOP) Federal 

Medical Centers

Page 66 GAO-17-379 BOP Health Care Costs

Figure 8: Selected Images of Health Services Facilities and Equipment at Bureau of Prisons’ (BOP) Federal Medical Centers

Note: These images represent various health care facilities at BOP institutions. They are not 

necessarily reflective of the facilities at all BOP institutions, which may differ based on medical care 

level and available resources.
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 67 GAO-17-379 BOP Health Care Costs

Gretta L. Goodwin, (202) 512-8777 or goodwing@gao.gov

In addition to the contact named above, Joy Booth (Assistant Director); 

Valerie Kasindi (Analyst-in-Charge); Dina Shorafa; Sara Rizik; Lori 

Achman; Pedro Almoguera; Willie Commons, III; Eric Hauswirth; Susan 

Hsu; Amanda Miller; Claire Peachey; and William T. Woods made key 

contributions to this report

.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100592)
The Government Accountability Office, the audit, evaluation, and investigative 

arm of Congress, exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability of the 

federal government for the American people. GAO examines the use of public 

funds; evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through GAO’s website (http://www.gao.gov). Each weekday afternoon, GAO 

posts on its website newly released reports, testimony, and correspondence. To 

have GAO e-mail you a list of newly posted products, go to http://www.gao.gov

and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of production and 

distribution and depends on the number of pages in the publication and whether 

the publication is printed in color or black and white. Pricing and ordering 

information is posted on GAO’s website, http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, MasterCard, 

Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, LinkedIn, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.

Visit GAO on the web at www.gao.gov and read The Watchblog.

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-4400, 

U.S. Government Accountability Office, 441 G Street NW, Room 7125, 

Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

James-Christian Blockwood, Managing Director, spel@gao.gov, (202) 512-4707

U.S. Government Accountability Office, 441 G Street NW, Room 7814, 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Strategic Planning and 

External Liaison

Please Print on Recycled Paper.