Medicaid EXPANSION Put on Hold; Medicaid REFORM Imminent

North Carolina spends $36 million dollars a day on Medicaid!!!! Therefore, last year the General Assembly requested the State Auditor’s department conduct an audit on Medicaid spending.

The Office of the State Auditor (OSA) published a 75-page, January 2013 Performance Audit (Audit) for the Division of Medical Assistance (DMA). Apparently the OSA is less than pleased with DMA’s budgeting ability, use of Medicaid funds, and general bookkeeping practices.

With phrases, such as “DMA’s inability,” “insufficient monitoring of contracted administrative services,” and “indicative of its inadequate oversight,” it is clear that DMA flunked the Audit.

The purpose of the Audit was four-fold:

1. to determine if the DMA administrative functions complied withe the Medicaid State Plan and federal requirements;

2. to evaluate DMA’s process for preparing annual budgets and monitoring expenditures to determine whether DMA is accurately predicting costs;

3. to review the process by which DMA made State Amendments from beginning until approval by Centers of Medicare and Medicaid Services (CMS) for compliance with federal requirements;

4. to assess the timeliness, completeness and flow of budget and expenditure information from DMA to stakeholders (Secretary, Governor, etc.)

Interestingly, the Audit determined that, in 2011, of the $10.3 billion medical assistance spending (MAP) (basically, how much money Medicaid spent), $648.8 million went to administrative costs.

In other words, in 2011, Medicaid recipients, physicians providing Medicaid services, and other health care providers did not receive $648.8 million of Medicaid funds because the State of North Carolina (or…DMA) spent the money on itself.

Compared to 9 states with similar Medicaid budgets, North Carolina spent 38% MORE than the average of those 9 states.  Or, in other words, $180 million more.

Just think…if we lowered admin costs, and raised Medicaid reimbursement for physicians accepting Medicaid…..hmmmm…one can dream….

According to the Audit, 46.7% of the admin costs ($648.8 million) went to pay private contractor payments.  Like ValueOptions, Public Consulting Group, Carolinas Center for Medical Excellence, etc. Those contracts with the State make up almost 50% of admin costs.  Yet, when the conductors of the Audit requested copies of all private contractor contracts to review the contracts, DMA was unable to produce the copies. DMA is spending almost 50% of the Medicaid money on contractors, yet DMA can’t find the contracts??

As the Audit put it:

“DMA’s inability to provide this information is indicative of its inadequate oversight of contractual expenditures.”

Here are some other goodies:

“DMA does not appropriately manage Medicaid costs that are subject to agency control.”

“Finding #1: The Division has consistently exceeded budgeted amounts for contracted administrative costs and interagency transfers due to an apparent lack of oversight.”

A few hours ago, Governor McCrory, DHHS Sec. Wos, and State Auditor Beth Wood spoke on NC Medicaid funding.

Wos stated that DHHS has a duty to the taxpayers and has not been upholding its duty.  Wood stated that DMA and its sub departments have “no cost accountability.”

In response to  the Audit, McCrory (or the State) hired Medicaid expert Carol Steckel to revamp the Medicaid program.

McCrory said that NC cannot expand Medicaid without fixing the Medicaid system!

Finally! Let’s fix the Medicaid system. Let’s stop the useless spending and make sure that Medicaid dollars go to the recipients in need, not government fat!!

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on January 31, 2013, in Beth Wood, Division of Medical Assistance, Health Care Providers and Services, Legislation, Medicaid, Medicaid Costs, Medicaid Expansion, Medicaid Funds, NC DHHS, North Carolina, Office of State Auditor, Taxes, Taxpayers and tagged , , , , , , , . Bookmark the permalink. 2 Comments.

  1. No shock there

    Sent from my iPhone

  1. Pingback: DEATH WATCH PART II: No Oversight, No Compliance

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