Former DHHS staffer takes jobs with Medicaid contractor

I cannot take credit for this blog.  I cut and pasted the test from WRAL.  But…WOW!!!!

Raleigh, N.C. — A state employee who helped oversee the construction and rollout of the NCTracks Medicaid billing system now works for Computer Sciences Corp., the contractor responsible for the troubled project. Paul Guthery was an IT manager at the Department of Health and Human Services, where he had worked since January 2010. At a hearing Wednesday, State Auditor Beth Wood described him as the agency’s “point person” for CSC, responsible for certifying NCTracks’ testing process. At least one good-government watchdog says his jump from supervising the company to working for it raises the appearance of a potential conflict of interest, one that the state should try to avoid in the future.

According to public records, Guthery began working for the state on Jan. 1, 2010. His last salary was $126,500 per year. He stopped working for the state Aug. 27 and soon after began working for CSC as an executive account executive.  Doctors, hospitals and others who render care for patients covered by Medicaid, the state-federal health insurance program for the poor and disabled, must use the CSC-built NCTracks system to get paid for those services. The system went live July 1 and soon after become the focus of controversy, with providers saying it was nearly impossible to submit claims and that payments were delayed by months. The delays threatened to drive some providers out of business and complicated care for thousands of patients.

Since then, the state and CSC have struggled to right the program. It was in late August, as providers bombarded lawmakers and the governor’s office with complaints about the system, that Guthery made the jump to the private sector.
Guthery declined via email to speak with WRAL News, deferring to his company’s corporate communications department. Michelle Sicola Herd, a spokeswoman for CSC, declined a request for an interview and was not willing to speak on the record about the circumstances of Guthery’s hiring.

Officials with DHHS downplayed Guthery’s part in the rollout of NCTracks, saying Thursday that he never occupied a position in which he would give the final word on the program going live. “One of the key things is that Paul was one of many people involved in this project, a very large project going on for a very long period of time,” said Ricky Diaz, a spkesman for the department.  Diaz emphasized that an outside testing group reviewed the stability of the NCTracks system before state officials turned it on July 1.

But Wood blasted the role of that third-party overseer, saying the company hired for independent verification and validation of system testing had not actually conducted any independent verification. Rather, they merely collected information from DHHS and CSC and summarized it in a report.

During a hearing Wednesday, Sen. Jeff Tarte, R-Mecklenburg, asked Wood who was responsible for signing off on reports that system testing had been completed and was successful.

“The agency,” Wood answered, adding, “The point person that was at the agency is now working for CSC.”  That person was Guthery. 

Diaz said state personnel laws prevent him from talking about what, if any, steps were taken to try to keep Guthery as an employee. But he emphasized that the state had taken strides to get the system on track, pointing out that it has been under construction for more than 10 years. 

“There have no doubt been challenges. This is a very large transition for the state of North Carolina,” he said. “The NCTracks project has, to date, paid $3.8 billion to North Carolina health care providers, as well as processing more than 78 million claims.”  With regard to Guthery, Diaz said state law does not currently prohibit employees who work with a contractor from taking a job with that contractor. By contrast, had Guthery taken a job as a lobbyist, he would have needed to wait six months before working with the legislature or his old employer. No such cooling-off period applies to employees in other lines of work. 

Jane Pinsky, with the North Carolina Coalition for Lobbying and Government Reform, says lawmakers should consider changing that.  “If I’m a skeptical, cynical citizen, the question is, did he (Guthery) give them a pass and then they gave him a job?” Pinsky said.  Earlier this year, another high-ranking DHHS staffer left for a private-sector job. Former state Medicaid director Carol Steckel was recruited to overhaul North Carolina’s system but left abruptly for a position with Wellpoint, a managed-care company based in Florida.

Pinsky pointed out that Wellpoint could end up bidding to run some or all of North Carolina’s Medicaid services under the McCrory administration’s planned reforms.
“In state government, and in DHHS, it is not unprecedented for employees to go work for vendors,” Diaz said. 

Asked if he thought the Guthery situation could be viewed as a conflict of interest, Diaz said DHHS was being “very transparent” with regard to the situation. Asked if the agency would put any policy changes in place, Diaz referred to DHHS Secretary Aldona Wos’ efforts to improve contracting practices more broadly.  “I think what you’ve seen is this secretary has placed a heavy emphasis on contract oversight and compliance,” he said.  But Pinsky says the problem could be addressed in other ways.  “One thing you can do is tell the contractor that, as a condition of the contract, they can’t hire anybody” in the agency, she said. She also suggested the possibility of a non-compete clause for employees hired to administer contracts.

In the meantime, she says, lawmakers should consider instituting a cooling-off period for high-level staffers.  “Anybody who oversees a contract or supervises an industry shouldn’t be able to go to work for them the next day,” she said. “Does that affect any decisions they’re going to make in how they administer the contract?”

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on November 22, 2013, in Accountability, Aldona Wos, Beth Wood, Budget, Computer Sciences Corporation, CSC, DHHS, Division of Medical Assistance, General Assembly, Gov. Pat McCrory, Health Care Providers and Services, Joint Legislative Oversight Committee on Health and Human Services, Legislation, McCrory, Media, Medicaid, Medicaid Budget, Medicaid Costs, Medicaid Reimbursements, Medicaid Services, Medicaid Spending, NC, NCTrack Glitches, NCTracks, NCTracks Billing Issues, North Carolina, Office of State Auditor, Taxpayers, Timely Payments, Transparency, Wos and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. I tend to think someone in such a position has a duty to the public that approaches a fiduciary responsibility. Surely a person with duties such as this should be working under the blanket of utmost good faith.

    I cannot and do not say this person engaged in wrongdoing in his work for the state. I do not have sufficient details to come close to making such an accusation.

    I do have sufficient details to say that when one has such a responsibility one should avoid even the *appearance* of impropriety.

    The appearance of impropriety here seems rather substantial to me, and I think an immediate transition from oversight of an organization to working for said organization is inappropriate.

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