An audit released on Wednesday by state comptroller Thomas DiNapoli, said New York State could save as much as $20 million a year if the Department of Corrections and Community Supervision applies to the federal Medicaid program for inpatient care for eligible inmates.

Federal Medicaid rules allow states to bill Medicaid for inpatient services received by eligible inmates. Five states, including Louisiana, Mississippi, Nebraska, Oklahoma and Washington, already do so, according to a report by North Carolina’s state auditor.

During the audit period covering March 31, 2008-March 31, 2010, more than $89 million was paid by Department of Corrections and Community Supervision to outside health care providers was for inpatient services.

Billing Medicaid for eligible inmate health care costs could significantly reduce the department’s costs for such care.