NC State Auditor Says: NC DMA Program Integrity Poorly Run!!

We all knew this already, right? The Program Integrity Section (PI) of the Division of Medical Assistance (DMA) is poorly run…that’s not new news, right? Shoot, I could have told you PI was poorly run for free, instead of wasting 16,411 audit hours at an approximate cost of $1,181,592.

But, now, the Office of the State Auditor, headed up by Beth Wood, CPA, has issued a written state-wide federal compliance audit, which states, in part, that:


The Department did not adequately track case investigations, consistently maintain case file documentation, and establish an effective quality assurance process over the Public Consulting Group, a post-payment review contractor. These deficiencies could result in failures in completing case investigations, identifying provider overpayments, and referring potentially fraudulent cases to the Attorney General’s Medicaid Investigations Unit. Federal regulations require the establishment of procedures to identify suspected fraud cases, investigate these cases, and refer cases with sufficient evidence of suspected fraud to law enforcement officials.”

(I added the red ink for emphasis).

STOP THE PRESSES!!! Is this audit stating on public record that PI has NOT established effective quality assurance process over PCG????

I am quite certain that many of my clients would have rather learned this little “tid bit” of knowledge BEFORE PCG told my clients that they owed the State hundreds of thousands of dollars.  BEFORE my clients had to hire me.  BEFORE some providers (not my clients) have declared bankruptcy from PCG’s allegations that the provider owed hundreds of thousands of dollars.

Maybe PI’s deficiencies contribute to the reason that health care providers that try to contact PI with questions about their own cases are unable to find someone knowledgable and willing to speak with them and provide detailed reasons for PI’s or PCG’s findings. (Just a guess).

DHHS’ response?

“The Department agrees with the finding and recommendations. The Program Integrity (PI) case tracking database is an Access database created six years ago that now contains 50,000 records. Due to the volume of records contained in the PI case tracking system, it is extremely unstable and has weekly issues. In addition, the 2008 Centers for Medicare and Medicaid Services (CMS) audit cited the Division of Medical Assistance for not maintaining an effective fraud and abuse case tracking system. PI continues in its effort to procure an effective PI case tracking system to ensure case file documentation is maintained. In the interim, PI conducts monthly quality assurance reviews for all contractors performing case investigations to ensure the quality assurance review process is strengthened.”

Hmmmmm…Seems that PI needs some quick and drastic reform. But not only PI….but also PCG, which apparently is running rampant and with little to no supervision.

I literally cannot wait until the State Auditor audits DMA and the conduct of Managed Care Organizations (MCOs).

Interestingly, according to the January 2013 Audit conducted by the State Auditor, DMA paid PCG approximately $6.8 million to conduct these post payment reviews with little to no supervision.


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on April 9, 2013, in Beth Wood, Division of Medical Assistance, Health Care Providers and Services, Medicaid, Medicaid Audits, NC DHHS, North Carolina, Office of State Auditor, Tentative Notices of Overpayment and tagged , , , , , . Bookmark the permalink. 4 Comments.

  1. Hi Knicole,
    I thoroughly enjoy your blog and can’t thank you enough for all of the valuable information you provide. Our family lives in Asheville and we have an 8 year old daughter with ASD. She receives Medicaid and services through Western Highlands Network. Last night on the news, we learned the state is cancelling its Medicaid contract with WHN effective July 1. Understandably, we are very concerned about our child possibily losing much needed services. Any advice on what we can expect to happen after July 1? How can families like ours prepare for impending changes we can’t foresee? What are our rights and how can we best protect our child’s services?
    Thank you so much for your help,
    Angela in Asheville

    • Angela from Asheville,

      Thank you so much for reading this blog. It constantly amazes me the number of people who do not care about Medicaid issues.

      Yes, Western Highlands’ contract with the State has been terminated. (I actually predicted this many months ago:) ). Regardless, I understand your fear of upcoming transitions.

      I’m curious, were you happy with Western Highlands?

      Smokey Mountain is a bigger MCO, so I am sure there will be an adjustment period. If Smokey Mountain refuses to provide the same services for your child, please, please, appeal. With or without an attorney. If you cannot afford an attorney, I will be happy to guide you (obviously with limited ability and time, but I will do my best) as much as I can. If there are numerous families that are adversely affected, there is a chance that we would be able to pool resources. But, hopefully, it will not come to that. Hopefully the transition from Western Highlands to Smokey Mountain is seamless and all goes well for you, your family, and your child.

      My cousin’s son is autistic and the mom has been unsuccessful in getting him on the Waiver (I’m assuming you are on the Waiver…if so, be glad for that).

      Please feel free to contact me in the future. Thanks again.

  2. Wow…when I turned in my former employer for medicaid fraud I eventually had to go to the Attorney General’s Office and the FBI because PI didn’t seem to care. Oh….but do care when their noses are rubbed in it (6 months later they freeze my bank account for a week to make sure that I did nothing wrong when FBI and NC AG offices TOLD them I was a witness and had done nothing wrong! ). Waste of money, too many bean counters, pie in the sky theorists, and nobody gives a damn about the people who need help! Why should therapists give a damn anymore and why should consumers even try?

  3. Ron,

    While part of me agrees with your viewpoint, I truly hope that it is not true that no one gives a damn about the people who need help. Most Medicaid recipients seem to have no voice in political or legal arenas, but the health care providers who accept Medicaid are speaking for them. These providers care enough to service the Medicaid population. I am sure that in the entire provider community there are some providers that do not care about recipient and commit fraud (like your former employer), but, I truly hope that, for the most part, providers care about recipients.

Leave a Reply

%d bloggers like this: