Category Archives: Aldona Wos
A recent State Auditor report found that DHHS “had approximately 2,500 non-competitively bid contracts with a value of approximately $2.4 billion between state fiscal year 2012 through 2014. The value of the no-bid contracts accounts for more than 32% of all contracts during the same period.”
No bid contracts are exactly that – the company awarded the contract received the contract without competition, or a bid process. Think of a no bid contract as a try out for a professional football team, but only one person is trying out. Generally, competition breeds better results because people try harder when they compete, rather than a solo act.
In contract bidding, rivalry also breeds a lower contract price. It’s only logical. If you know that other companies are submitting bids, you are going to submit the lowest number possible.
So how is DHHS allowed to award no bid contracts?
NC Statute dictates that the AG or the AG’s attorney shall review “all proposed contracts for supplies, materials, printing, equipment, and contractual services that exceed one million dollars…” as of June 27, 2011. See NCGS 114-8.3 as amended by Session Law 2011-326 and Session Law 2013-234.
But – Per 09 NCAC 06B .0901, “…competition may be limited or waived where a factual basis demonstrates support of one or more of the conditions set forth in Paragraph (b) of this Rule. If the procurement is within a purchasing agency’s general delegation, then the purchasing agency may waive competition in conformance with this Rule. If the procurement is greater than the agency’s delegation, requests for limited or waived competition shall be submitted to the State CIO for approval.”
Here are the exceptions found in 09 NCAC 06B.0901(b):
(b) Competition may be limited or waived under the following conditions:
- Competition is not available;
- A needed product or service is available from only one source of supply;
- Emergency action is indicated;
- Competition has been solicited but no responsive offers have been received;
- Standardization or compatibility is the overriding consideration;
- A donation stipulates the source of supply;
- Personal or particular professional services are required;
- A product or service is needed for a person with disabilities and there are overriding considerations for its use;
- Additional products or services are needed to complete an ongoing job or task;
- A particular product or service is desired for educational, training, experimental, developmental or research work;
- Equipment is already installed, connected and in service, and it is determined advantageous to purchase it;
- Items are subject to rapid price fluctuation or immediate acceptance;
- There is evidence of resale price maintenance or other control of prices or collusion on the part of persons or entities that thwarts normal competitive procedures unless otherwise prohibited by law;
- A purchase is being made and a price is available from a previous contract;
- The requirement is for an authorized cooperative project with another governmental unit(s) or a charitable non-profit organization(s); or
- A used item is available on short notice and subject to prior sale.
Did all the no bid contracts that DHHS procured between state fiscal year 2012 through 2014 to equal approximately $2.4 billion fit within 1 or more of the above referenced exceptions?
At least, according to the State Auditor – No.
Here are the key findings of the State Auditor’s Report:
- Many no-bid contracts lacked required review and approval to protect state interests
- Many no-bid contracts lacked documentation of negotiations to improve pricing or terms
- Many no-bid contracts lacked adequate written justification to waive competition, which increases the risk of favoritism, unfavorable terms, and poor performance
It appears that DHHS failed this audit. Should we extrapolate?
DHHS is under criminal investigation by the federal government for allegedly overpaying employees without a bid process, and, simply, mismanaging and overspending our Medicaid tax dollars. See blog.
When I first started writing this blog, I opined that the federal investigation should be broadened. While I still believe so, the results of broadening the scope of a federal investigation could be catastrophic for our Medicaid providers and recipients. So I am metaphorically torn between wanting to shine light on tax payer waste and wanting to shield NC Medicaid providers and recipients from the consequences of penalties and sanctions on NC DHHS. Because, think about it, who would be harmed if NC lost federal funding for Medicaid?
[BTW, of note: These subpoenas were received July 28, 2015. Aldona Wos announced her resignation on August 5, 2015, after receipt of subpoenas. The Subpoenas demand an appearance on August 18, 2015, which, obviously, has already passed, yet we have no intel as to the occurrences on August 18, 2015. If anyone has information, let me know.]
Does this criminal investigation go far enough? Should the feds investigate more Medicaid mismanagement over and above the salaries of DHHS employees? What are the potential consequences if NC is sanctioned for violating Medicaid regulations? How could a sanction affect providers and recipients?
DHHS’ employees are not the only highly compensated parties when it comes to our Medicaid dollars! It is without question that the contracts with vendors with whom DHHS contracts contain astronomically high figures. For example, DHHS hired Computer Sciences Corporation (CSC) to implement the NCTracks software for $265 million. Furthermore, there is no mention of the lack of supervision of the managed care organizations (MCOs) and the compensation for executives of MCOs being equal to that of the President of the United States in the Subpoenas.
The subpoenas are limited in scope as to documents related to hiring and the employment terms surrounding DHHS employees. As I just said, there is no mention of violations of bid processes for vendors or contractors, except as to Alvarez & Marsal, and nothing as to the MCOs.
Specifically, the subpoena is requesting documents germane to the following:
- Les Merritt, a former state auditor who stepped down from the North Carolina State Ethics Commission after WRAL News raised questions about potential conflicts of interest created by his service contract with DHHS;
- Thomas Adams, a former chief of staff who received more than $37,000 as “severance” after he served just one month on the job;
- Angie Sligh, the former director of the state’s upgraded Medicaid payment system who faced allegations of nepotism and the waste of $1.6 million in payments to under-qualified workers for wages, unjustified overtime and holiday pay in a 2015 state audit;
- Joe Hauck, an employee of Wos’ husband who landed a lucrative contract that put him among the highest-paid workers at DHHS;
- Alvarez & Marsal, a consulting firm overseeing agency budget forecasting under a no-bid contract that has nearly tripled in value, to at least $8 million;
Most likely, the penalties imposed would be more civil in nature and encompass suspensions, recoupments, and/or reductions to the federal matching. Possibly a complete termination of all federal matching funds, at the worst.
42 CFR Part 430, Subpart C – of the Code of Federal Regulations (CFR) covers “Grants; Reviews and Audits; Withholding for Failure To Comply; Deferral and Disallowance of Claims; Reduction of Federal Medicaid Payments”
The Center for Medicare and Medicaid Services (CMS) is charged with the oversight of all 50 states’ management of Medicaid, which makes CMS very busy and with solid job security.
CMS may withhold federal funding, although reasonable notice and opportunity for a hearing is required (unlike the reimbursement suspensions from providers upon “credible” (or not) allegations of fraud).
If the Administrator of a hearing finds North Carolina non compliant with federal regulations, CMS may withhold, in whole or in part, our reimbursements until we remedy such deficiency. Similar to health care providers’ appeals, if the State of North Carolina is dissatisfied with the result of the hearing, NC may file for Judicial Review. Theoretically, NC could go all the way to the U.S. Supreme Court.
Other penalties could include reductions of (1) the Federal Medical Assistance Percentage; (2) the amount of State expenditures subject to FFP; (3) the rates of FFP; and/or (4) the amount otherwise payable to the state.
As a reminder, the penalties listed above are civil penalties, and NC is under criminal investigation; however, I could not fathom that the criminal penalties would differ far from the civil allowable penalties. What are the feds going to do? Throw Wos in jail? Highly unlikely.
The subpoena was addressed to:
NC DHHS, attention the Custodian of Records. In NC, public records requests go to Kevin V. Howell, Legal Communications Coordinator, DHHS.
But is the federal government’s criminal investigation of DHHS too narrow in scope?
If we are investigating DHHS employees’ salaries and bid processes, should we not also look into the salaries of DHHS’ agents, such as the salaries for employees of MCOs? And the contracts’ price tags for DHHS vendors?
Turning to the MCOs, who are the managers of a fire hose of Medicaid funds with little to no supervision, I liken the MCOs’ current stance on the tax dollars provided to the MCOs as the Lion, who hunted with the Fox and the Jackal from Aesop’s Fables.
The Lion went once a-hunting along with the Fox, the Jackal, and the Wolf. They hunted and they hunted till at last they surprised a Stag, and soon took its life. Then came the question how the spoil should be divided. “Quarter me this Stag,” roared the Lion; so the other animals skinned it and cut it into four parts. Then the Lion took his stand in front of the carcass and pronounced judgment: The first quarter is for me in my capacity as King of Beasts; the second is mine as arbiter; another share comes to me for my part in the chase; and as for the fourth quarter, well, as for that, I should like to see which of you will dare to lay a paw upon it.”
“Humph,” grumbled the Fox as he walked away with his tail between his legs; but he spoke in a low growl:
Moral of Aesop’s Fable: “You may share the labours of the great, but you will not share the spoil.”
At least as to DHHS employees’ salaries, the federal government is investigating any potential mismanagement of Medicaid funds due to exorbitant salaries, which were compensated with tax dollars.
Maybe this investigation is only the beginning of more forced accountability as to mismanaging tax dollars with Medicaid administrative costs.
One can hope…(but you do not always want what you wish for…because the consequences to our state could be dire if the investigation were broadened and non compliance found).
Let us quickly contemplate the possible consequences of any of the above-mentioned penalties, whether civil or criminal in nature, on Medicaid recipients.
To the extent that you believe that the reimbursement rates are already too low, that medically necessary services are not being authorized, that limitations to the amount services are being unduly enforced…Imagine that NC lost our federal funding completely. We would lose approximately 60% of our Medicaid budget.
All our “voluntary” Medicaid-covered services would, most likely, be terminated. Personal care services (PCS) is an optional Medicaid-covered service.
With only 40% of our Medicaid budget, I could not imagine that we would have much money left to pay providers for services rendered to Medicaid recipients after paying our hefty administrative costs, including overhead,payroll, vendor contracts, MCO disbursements, etc. We may even be forced to breach our contracts with our vendors for lack of funds, which would cause us to incur additional expenses.
All Medicaid providers could not be paid. Without payments to providers, Medicaid recipients would not receive medically necessary services.
Basically, it would be the next episode of “Fear the Walking Dead.”
Hopefully, because the ramifications of such penalties would be so drastic, the federal government will not impose such sanctions lightly. Sanctions of such magnitude would be a last resort if we simply refused to remedy whatever deficiencies are found.
Otherwise, it could be the zombie apocalypse, but the Lion’s would be forced to share.
By Tyler Dukes, Mark Binker & Laura Leslie
RALEIGH, N.C. — The U.S. Attorney’s Office has launched an investigation into high-dollar consulting contracts and salary payments at the North Carolina Department of Health and Human Services.
According to documents provided by DHHS on Friday afternoon, U.S. Attorney Thomas Walker subpoenaed the department for information on more than 30 employees, as well as bidding and payment information for administrative contracts, as part of a criminal investigation. The subpoenas came in late July, about a week before the resignation of former DHHS Secretary Aldona Wos in early August.
The investigation was first reported by The News & Observer.
DHHS spokeswoman Kendra Gerlach said Wos decided to resign before the subpoenas.
“The current secretary had been selected prior to any knowledge of this government inquiry,” Gerlach said.
Walker’s office did not return phone calls seeking comment.
Gerlach said the department is cooperating with the federal government, but she declined to comment further about the investigation.
“We will continue to respect the confidentiality of the process by the federal government to protect the integrity and fairness of this review,” she said in an emailed statement.
The Governor’s Office has not responded to requests for comment.
Among the targets of the subpoena are the records of state employees and contractors who have come under fire in the past, both by North Carolina legislators and the State Auditor’s Office.
- Les Merritt, a former state auditor who stepped down from the North Carolina State Ethics Commission after WRAL News raised questions about potential conflicts of interest created by his service contract with DHHS
- Thomas Adams, a former chief of staff who received more than $37,000 as “severance” after he served just one month on the job
- Angie Sligh, the former director of the state’s upgraded Medicaid payment system who faced allegations of nepotism and the waste of $1.6 million in payments to under-qualified workers for wages, unjustified overtime and holiday pay in a 2015 state audit
- Joe Hauck, an employee of Wos’ husband who landed a lucrative contract that put him among the highest-paid workers at DHHS
- Alvarez & Marsal, a consulting firm overseeing agency budget forecasting under a no-bid contract that has nearly tripled in value, to at least $8 million
State lawmakers have grilled DHHS leadership in the past in response to the contracts and audits, often publicly in legislative oversight meetings.
Rep. Justin Burr, co-chairman of the Joint Legislative Oversight Committee on DHHS, said Friday that he was recently made aware of the federal investigation into DHHS.
“It’s a concern, but it covers several areas that our oversight committee has expressed concerns about,” Burr, R-Stanly, said.
Oversight hearings during Wos’ tenure questioned the qualifications of contractors hired by DHHS, as well as the size of those contracts.
“Depending on which one you’re talking about, there was no sort of bid or effort to find the most qualified person,” Burr said. “They were just hand-picking individuals.”
This is a copy of the WRAL article. MORE TO COME FROM ME!!!!
In our last post on Medicaid reform, we updated you on the recent bill passed by the North Carolina Senate relating to the long-standing thorn in the side of the General Assembly, especially regarding the states’ budget – the Medicaid program. The Senate’s version of Medicaid reform is quite different from what we have previously seen and is a hodge-podge of managed care and a new idea: “provider-led entities.”
In a strong sign that this proposal is a compromise between competing sides that could end up getting passed, both House and Senate leaders are speaking positively on the record to news media about the prospects for a deal. Given how public the issue is and how big it is (an expected $14.2 billion in North Carolina in the coming year), that means they expect to get a deal done soon. The fact that the issue is so tied up with the budget that is overdue to be passed is a further headwind to passing a bill.
Right now, the bill is in a conference committee of negotiators from the House and Senate to work out an agreement, given the differences between the two chambers.
One major issue that the committee needs to look at is whether there will be a whole new state agency: the “Department of Medicaid.” The Senate endorsed that idea last week.
Our prediction: The legislators will chart a cautious course and not erect a whole new agency at the same time they are overhauling the system.
With Wos having (coincidentally?) just stepped down as Secretary of the Department of Health and Human Services, perhaps the lack of a lightning rod for criticism of DHHS will let the air out of the proposal to remove Medicaid from DHHS’s hands.
By Robert Shaw
With the recent passing of the torch from Aldona Wos to Rick Brajer (see blog), I’ve been thinking about…
What are the qualifications of a Secretary of DHHS?
What exactly are the qualities that would make a great Secretary of DHHS? Remember, in Mary Poppins, when the children draft their requirements for a nanny? Or, better yet, what are the “Seven Habits of a Highly Effective” Secretary for DHHS? Or…in this case, the “Nine Habits”…
Here are my “Nine Habits of a Highly Effective Secretary of DHHS;” our Secretary of DHHS should have the following:
- A health care background
- A successful track record of his/her ability to manage large companies or agencies
- An understanding of the Medicaid system, and, maybe, even have first-hand knowledge of how the system affects recipients and providers
- A relationship with someone on Medicaid or a parent of someone on Medicaid
- A working knowledge of clinical coverage policies, reimbursement rates, and regulations surrounding Medicaid
- Both the capacity to listen and speak and do both eloquently and genuinely
- True empathy about the physical and mental health of Medicaid recipients and about providers, plus have the patience to handle all types of demographic differences
- An understanding that he/she is handling tax payers’ money, that redundancy in staff is excess administrative costs, and ability to trim the fat
- An ability to communicate with both the Senate and the House and to be frank with both
Let us analyze the qualifications of Wos that we came to witness over the last few years, as well as, review the qualifications of soon-to-be Sec. Brajer with information to which we are privy.
Let’s see if both, either, or neither have these “Nine Habits of a Highly-Effective Secretary for DHHS.”
- Health care background:
Wos: Yes. And, yet, maybe not. She is an M.D. Although I do not know whether she ever practiced medicine in North Carolina. According to Wikipedia, (which is never wrong) Wos “prides herself on her work in the field of preventing HIV and AIDS.” However, I was unable to find a single clinic in which Wos provided services. While, generally, an “M.D.” automatically bestows a certain aura of understanding health care, I question whether this “M.D.” automatically has a working knowledge of billing for and receiving reimbursements under Medicaid in North Carolina.
Brajer: Hmmmm. This one is more tricky. The two companies that Brajer owned, Pro-nerve LLC and LipoScience Inc., are health care related, in that Pro-nerve was an intraoperative neuromonitoring (IONM) company and LipoScience sold a diagnostic tool to health care providers. Arguably, both companies are health care related, at least, in an ancillary way. However, Brajer is not a health care professional, and, to my knowledge, has never rendered health care services. Furthermore, neither of Brajer’s companies was successful; quite the opposite is true, in fact. From my understanding, one company declared bankruptcy and the other was not far behind. Which brings us to the next category…
2. A successful track record of his/her ability to manage large entities:
Wos: Prior to acting as the Secretary to DHHS, Wos served as the Ambassador to Estonia until 2006. What she did besides political functions between 2006 and 2012, I do not know. Acting as an Ambassador does not entail managing large entities. The most managerial skills that I can find in her background, prior to being appointed Secretary, are related to political fund-raising. Since I would not call her brief reign as Secretary of DHHS a success, I give Wos a “two thumbs down” on this criterion.
Brajer: He managed two companies. We can bicker as to whether these companies should be considered large…neither employed 17,000 employees. Regardless, the “successful” criterion appears to be lacking.
3. An understanding of the Medicaid system:
Wos: “You’re asking me without having all the data available to answer a question,” she told lawmakers on October 8, 2013. In her defense, she responded as such when asked whether the State was moving toward privatization for Medicaid. No one could know the answer, except, maybe, McCrory.
On the other hand, the implementation of NCTracks was nothing short of a catastrophe of epic proportion. See blog. See blog. Anyone with nominal knowledge of the Medicaid system would have, at least, paused to consider keeping HP Enterprises under contract during the switch to NCTracks or pushed back the go-live date.
Answer: Here’s to hoping that Brajer does. I’m cheering for you! Go! Fight! Win!
4. A relationship with someone on Medicaid or a parent of someone on Medicaid:
Wos: Unknown. If I were shaking a proverbial “8 Ball,” it would read, “Doubtful.”
Brajer: Unknown. Perhaps one of his former employees at Pro-nerve, LLC and LipoScience, Inc. is on Medicaid.
Answer: Gimme a ‘B’! B! Gimme a ‘R’! R! Gimme a ‘A’! A! Gimme a ‘J’! J! Gimme a ‘E’! E! Gimme a ‘R’! R! Whats that spell? Brajer!!
5. A working knowledge of clinical coverage policies, reimbursement rates, and regulations surrounding Medicaid.
Wos: Unknown. Whatever Wos’ knowledge of regulations and clinical coverage policies is or lacked, she, initially, made up for any knowledge lacked with the key hire and quick resignation of Carol Steckel. Unfortunately, Steckel’s experience was never replaced.
January 2013: “I am pleased to say that we are already taking steps to address some of these issues,” Wos said. “Now, the most important of this is that we have hired Ms. Carol Steckel, a nationally recognized — nationally recognized — expert in Medicaid to run our Medicaid program for the state. Carol is already moving ahead with systemic reviews of operations in this division. She is reviewing and establishing new policies and procedures.”
Answer: B! R! A! J! E! R! Let’s go, Brajer!
6. Both the capacities to listen and speak and do both eloquently.
Wos: Wos brandished an ability to speak publicly with ease. Listening, on the other hand….eh?
Answer: I think you can, I think you can, I think you can…
7. Genuine concern about the physical and mental health of Medicaid recipients AND about providers PLUS have the patience to handle all types of demographic differences
Wos: She seems to think so. Her country club does not discriminate.
Answer: Go! Go! Go! Go! Go, Brajer!!
8. An understanding that he/she is handling tax payers money and that redundancy in staff is excess administrative costs and trim the meat
Wos: “My obligation as secretary is to find the best possible team in order to get the job done.” Les Merritt served as CFO of DMA on a $300,000-plus contract. Joe Hauck was paid over $228,000 for 6 months of advise to Wos. Matt McKillip was paid $87,500 to serve as chief policy maker without any health care background. Ricky Diaz pulled in $85,000 as communications director. Id. Wos has handed out $1.7 million in pay hikes to 280 staffers, many with “no career or educational experience for the jobs they hold.” Id. The implementation of the MCOs also fell under Wos’ watchful eye. The MCO system has created thousands upon thousands of high-paying jobs with our Medicaid dollars. I believe that in the “trim the fat” category, Sec. Wos scores a goose egg.
Answer: Please, Brajer! For the love of Pete!
9. Ability to communicate with both the Senate and the House and to be frank with both.
In April 2013: “I think the word transparency can get pretty dangerous,” Wos said. “Because what does transparency mean? If transparency means that we’re in a planning process and you’re asking us, ‘Tell us all the things you’re planning,’ well, my goodness, allow us to work, and then we’ll give you everything that you want.”
Answer: Brajer, Brajer, He’s our man! If he can’t do it…[gulp].
It concerns me that so many of future Sec. Brajer’s core abilities/habits to run and manage DHHS and the Medicaid program in a highly effective manner are unknown. Nothing like placing all your money on red! But we have HIGH hopes for Brajer!!! Don’t let us down!!
The whole point of this blog is to pause and really contemplate what characteristics would comprise a great Secretary for DHHS. Obviously, the Governor has the full authority to appoint the Secretary, meaning that we taxpayers have little to no input as to whether we deem a person qualified, except in the indirect method of voting or not voting for the Governor.
Call this blog an exercise in examining what habits, if in existence, would make the most highly effective Secretary of DHHS and an opinion as to whether these habits exist in our former and future Secretaries.
We are cheering for Brajer! But…
One fact about the future is that it is unknown.
Given how long the Medicaid reform discussions have been going on at the legislature, you may be glazed over by now. Give me the memo when they pass something, right? Fair enough, let’s keep it brief. Where do things stand right now?
Last Wednesday, the Senate staked out its position in the ongoing debate between the House and the McCrory administration.
The Senate’s newest proposal is an unusual mix of different systems and new ideas. Not willing to commit to one model for the whole Medicaid program, the latest version of the bill includes something new called Provider Led Entities, or “PLEs.” PLEs are yet the latest in the alphabet soup of different alternatives to straight fee-for-service billing for Medicare/Medicaid. You’ve all heard of HMOs, PPOs, MCOs, and ACOs. PLEs appear to be similar to ACOs, but perhaps for political reasons the Senate bill sponsors saw the need to call the idea something different. See Knicole Emanuel’s blog.
In any event, as the name suggests, such organizations would be provider-led and would be operated through a capitated system for managing the costs of the Medicaid program. The Senate bill would result in up to twelve PLEs being awarded contracts on a regional basis.
PLEs are not the only addition to the Medicaid alphabet soup that the Senate is proposing in its version of HB 372. The Senate has also renewed its interest in taking Medicaid out of the hands of the N.C. Department of Health and Human Services entirely and creating a new state agency, the Department of Medicaid (“DOM”).
(One wonders whether the continual interest in creating a new Department of Medicaid independent of the N.C. Department of Health and Human Services had anything to do with embattled DHHS Secretary Wos stepping down recently.)
The Senate also proposes creating a Joint Legislative Oversight Committee on Medicaid (“LOC on Medicaid”).
But creating the DOM and using new PLEs to handle the provision of Medicaid services is not the whole story. Perhaps unwilling to jump entirely into a new delivery system managed by a wholly new state agency, the Senate bill would keep LME/MCOs for mental health services in place for at least another five years. Private contractor MCOs would also operate alongside the PLEs. The North Carolina Medicaid Choice coalition, a group which represents commercial MCOs in connection with the Medicaid reform process, is pleased.
One very interesting item that the Senate has included in its proposed legislation is the following requirement: “Small providers shall have an equal opportunity to participate in the provider networks established by commercial insurers and PLEs, and commercial insurers and PLEs shall apply economic and quality standards equally regardless of provider size or ownership.” You can thank Senator Joel Ford of Mecklenburg County for having sponsored this amendment to the Senate version of House Bill 372.
By pulling the Medicaid reform proposal out of the budget bill, the matter appears headed for further negotiation between the House and the Senate to see if the two can agree this year, unlike last year.
By legislative standards, that counts as forward progress… Here come the legislative discussion committees to hash it out more between the two chambers. We will keep a close eye on the proposals as they continue to evolve.
By Robert Shaw
Aldona Wos resigned today after two years and seven months as Secretary of NC DHHS. Wos’ last day will be Aug. 14.
McCrory named Rick Brajer, a former medical technology executive, as the new Secretary of DHHS.
Soon-to-be Sec. Brajer, 54, was the chief executive of ProNerve and LipoScience. LipoScience was sold to LabCorp in 2014, and ProNerve was sold to Specialty Care in April.
Brajer is not a doctor, as Wos was. Instead, Brajer touts an MBA from Stanford.
I do not have any information as to why Wos resigned now, especially in light of the recent resignation of the Secretary of Transportation, but will keep you apprised.
More to come….
Happy New Year, everyone!!! Hope your New Year’s celebrations were safe and surrounded by friends and family! According to a journalist, the new year did not ring in the Medicaid reimbursements owed by NCTracks. (Obviously I cannot comment on NCTracks’ current status due to the lawsuit we filed on behalf of all physicians in NC).
Here is the following article by Mike Voorheis…
A year after a Wilmington doctor filed a lawsuit, the state still owes his practice more than $100,000 in unpaid or underpaid Medicaid and Medicare services, he says.
Dr. S. Albert Abrons, a family physician, is the first of seven plaintiffs listed in Abrons vs. N.C. Department of Health and Human Services, a class-action suit, (filed by Williams Mullen), that seeks unspecified damages from the state and three other defendants responsible for the development and implementation of NC Tracks, the software that disburses Medicare and Medicaid payments to health care providers.
Problems with the software began immediately in January 2013 and continued for about 14 months, Abrons said. During that time, Abrons and his staff treated thousands of Medicaid patients. Instead of being reimbursed at the higher Medicare rate for primary care services – a provision of the Affordable Care Act – Abrons was reimbursed at the lower Medicaid rate.
That amounted to about $20 per visit, his office manager said, eventually leading to a six-figure deficit.
Abrons said that meant he had to take out loans and couldn’t give raises to his employees when he wanted to.
“The state still owes me and every provider, I presume, enhanced payments for 2013,” Abrons said.
Abrons fought the state to correct numerous errors beyond the reimbursement rates, he said. The harder he pushed, the less receptive DHHS became.
“There was a complete lack of courtesy,” Abrons said. “Those people have no humanity.”
N.C. Rep. Susi Hamilton, D-New Hanover, was also very critical of DHHS’ response.
“The problem clearly starts at the top,” Hamilton said, referring to DHHS Secretary Aldona Wos.
“There is an unwillingness to admit that there are problems. We’ve left several messages and were unable to get a response.”
The state filed a motion to dismiss the lawsuit in July and did not wish to comment further, spokesman Kevin Howell said.
Some organizations have had success in receiving their backlogged reimbursements. Wilmington Health CEO Jeff James said the state does not have extraordinary unpaid bills with his organization.
Elderhaus PACE’s Rick Richards said the state owes the Wilmington organization about $350,000. A plan is in place, he said, to have the debt cleared in the next 90 days.
The lawsuit argues that more than 70,000 providers in North Carolina may have had a claim against the state.
“It’s systemic,” Hamilton said. “It’s not about one physician’s profit margin or bottom line. The more we delay payment for services, the more reluctant the private sector is to provide services to Medicaid or Medicare patients. That’s not acceptable.”
Hamilton said that after 14 months of frustration that she’s grown more optimistic over the past 10 days, since speaker-elect Tim Moore has added his voice to the cause.
But even if Abrons recoups the money that is owed him, Hamilton said, his practice has still been a victim of the state’s mismanagement. Every paper that is resubmitted and every phone call that is made to the state costs money. And that doesn’t include the time and money invested in the lawsuit.
“Time is money,” Hamilton said. “They have experienced a tremendous loss even if they are reimbursed at 100 percent.”
From the News & Observer:
RALEIGH, N.C. — North Carolina’s health secretary said Wednesday her agency is collecting information for Gov. Pat McCrory to offer him possible ways to expand Medicaid coverage to more people under the federal health care overhaul.
The Republican-led General Assembly and McCrory declined to accept expansion last year because they said the state Medicaid office consistently faced shortfalls in the hundreds of millions of dollars. A state audit and other troubled operations led McCrory to call the $13 billion program “broken.”
But Health and Human Services Secretary Dr. Aldona Wos told a legislative committee the agency’s financial and structural improvements make offering credible options doable.
“We are at a point …. where we have an ability to evaluate options for the state and will be presenting those options to the governor,” Wos told the Joint Legislative Program Evaluation Oversight Committee. Last week, Wos trumpeted to another General Assembly panel how the Division of Medical Assistance held a $64 million cash balance at the end of the last fiscal year.
Wos stressed it would be up to others to decide on expansion, most of which would be paid by the federal government for the near future. Expansion is designed for hundreds of thousands of uninsured North Carolina residents who make too much for traditional Medicaid but not enough for subsidized insurance exchange plans. Medicaid currently enrolls more than 1.8 million state residents — mostly poor children, older adults and the disabled.
Wos gave no timetable for offering McCrory those options but said it would be more than just determining whether it would make financial sense. For example, she said, there needs to be enough health care providers to oversee any wave of new enrollees.
McCrory said in July he would be willing to revisit Medicaid expansion if cost overruns were repaired and provided the federal government in part gave the state flexibility to target any coverage increase based on North Carolina’s needs.
Earlier Wednesday, DHHS also announced plans for a retooled organizational structure for the division, the first of its kind in 36 years. It shifts from two division sections to what the agency calls five clearly defined functions. An outside consultant has been helping with organizational, finance and budget forecasting within Medicaid.
Again Wednesday, Wos rejected arguments from the legislature, particularly the Senate, to remove Medicaid from DHHS, saying it would undo recent progress.