Only a dozen states have taken advantage of a long-standing option to stick the federal government with at least half the cost of hospitalizations and nursing home stays of state prison inmates. The other states have left tens of millions of federal dollars on the table, either because they didn’t know about a federal rule dating to 1997 or they were unable to write the laws and administrative processes to take advantage of it. States and localities have a constitutional obligation to provide adequate health care to prisoners, and they must pay for it out of their own budgets (Vestal, 6/25).

From: http://www.news-medical.net/news/20130626/Many-states-missing-out-on-Medicaid-money-for-prisoners.aspx