Category Archives: Office of State Auditor

NC State Auditor Finds Cardinal Expenditures Unreasonable!!(Finally) #Wastedtaxdollars

The NC State Auditor Beth Wood released an audit report on Cardinal Innovations yesterday, May 17, 2017. Here are the key findings. For the full report click here.

BACKGROUND

Cardinal is a Local Management Entity/Managed Care Organization (LME/MCO) created by North Carolina General Statute 122C. Cardinal is responsible for managing, coordinating, facilitating and monitoring the provision of mental health, developmental disabilities, and substance abuse services in 20 counties across North Carolina. Cardinal is the largest of the state’s seven LME/MCOs, serving more than 850,000 members. Cardinal has contracted with DHHS to operate the managed behavioral healthcare services under the Medicaid waiver through a network of licensed practitioners and provider agencies.

KEY FINDINGS

• Cardinal spent money exploring strategic opportunities outside of its core mission

• $1.2 million in CEO salaries paid without proper authorization

• Cardinal’s unreasonable spending could erode public trust

KEY RECOMMENDATIONS

• Cardinal should consult and collaborate with members of the General Assembly before taking any actions outside of its statutory boundaries

• The Office of State Human Resources should immediately begin reviewing and approving Cardinal CEO salary adjustments

• The Department of Health and Human Services should determine whether any Cardinal CEO salary expenditures should be disallowed and request reimbursement as appropriate

• Cardinal should implement procedures consistent with other LME/MCOs, state laws, and federal reimbursement policy to ensure its spending is appropriate for a local government entity

My favorite? Recoup CEO salaries. Maybe we should extrapolate.

Feds launch investigation into DHHS contracts, hiring!!!

WRAL ARTICLE:

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.

That includes:

  • 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!!!!

State Auditor Finds Robeson County School NOT Using Medicaid Money

Our State Auditor Beth Wood’s most recent audit finds that The Public Schools of Robeson County failed to spend approximately $1 million in Medicaid dollars intended for special needs children in schools!!

See audit report.

“The Public Schools of Robeson County (School District) did not use approximately $1 million per year in Medicaid administrative reimbursements to provide required services to students with disabilities. The School District missed this opportunity to better serve students with disabilities because it was unaware of a contractual requirement to use the Medicaid reimbursements to provide required services.

Over the last three years, the School District reported that it used $26,780 out of $3.16 million in Medicaid administrative reimbursements to provide services to students with disabilities.

The amounts reportedly spent each year are as follows:

• $ 8,969 out of $1,010,397 (0.89%) in 2013

• $12,043 out of $872,299 (1.38%) in 2012

• $ 5,768 out of $1,278,519 (0.45%) in 2011”

The question that I have after reading the audit report is…WHERE IS THE MONEY?

Was this $1 million given to the school system and spent on items other than services for children? Is the school district sitting on a surplus of money that was unspent? Or was this amount budgeted to the school system and the remainder or unspent money is sitting in our state checking account?

To me, it is relatively unclear from the audit report which of the above scenarios is an accurate depiction of the facts.  If anyone knows, let me know.

NC State Auditor Finds Eastpointe Guilty of Accepting Kickbacks!

Last week I traveled to Houston, Dallas, and Denver to meet with other health care attorneys of Gordon & Rees.  It was a great trip and I met some wonderful colleagues.  But I was happy to get home to my family, including our new addition of 9 peacock eggs.

Yes, 9 peacock eggs!!

Here is a pic:

peacock eggs

(I know that there are 10 eggs in the picture, but we will not talk about the 10th.  Just know that we have high hopes that the other 9 are viable and survive!!  As of today, at 1:00 pm, all 9 eggs are chirping, but no cracks yet!!)

Oh, and, before I forget…Watch ABC news tonight.  I was interviewed for a story about one of my clients.

Anyway, while I was gone, I was unable to post a blog regarding the State Auditor’s most recent audit report regarding Eastpointe.  So here it is…

As the managed care organizations (MCOs) continue to accuse health care providers of fraud, waste, and abuse (FWA), it seems from a recent State Auditor report that, at least, one of the MCOs itself is guilty of the very accusation that they are alleging against providers.  See blog. And blog.

There is an old story:

A wolf, passing by, saw some shepherds in a hut eating for their dinner a haunch of mutton. Approaching them, he said: What a clamor you would raise, if I were to do as you are doing!

Moral:
Men are too apt to condemn in others the very things they practice themselves

The audit findings beg the questions…Is it only Eastpointe? Or all 9 MCOs? How much Medicaid money is lining the pockets of MCO executives, instead of paying for medically necessary services for Medicaid recipients?  Beth Wood  only audited Eastpointe. Is this only the tip of the iceberg?

According to our State Auditor, Eastpointe former executive has lined his pockets with $547,595+…

Here are the key findings from the NC State Auditor’s report regarding Eastpointe:

KEY FINDINGS

  • Former CFO facilitated apparent kickbacks totaling $547,595 from two Eastpointe contractors
  • Former CFO purchased three vehicles totaling $143,041 without a documented business purpose
  • Former CFO purchased $18,600 of equipment for personal use
  • Former CFO, Chief Executive Officer (CEO), and other employees used Eastpointe credit cards to make $157,565 of questionable purchases
  • Inadequate CEO and area board oversight contributed to operational failures

Eastpointe is one of 9 MCOs in NC charged with managing and supervising Medicaid behavioral health care services. So what do we do when the entity IN CHARGE of managing Medicaid money is mismanaging tax dollars???

Where is the supervision??

Over the last few years, since the MCOs went live across the state, I have seen the MCOs terminate Medicaid providers for no cause, claim providers owed money, penalties, plans of corrections (POC), and/or refuse to contract with providers for reasons as silly as:

  • Failing to put shoes on a paraplegic (no feet), because the assessment included that the patient required help dressing;
  • Using green ink (a personal favorite) on a service note;
  • Having signatures on service notes that are difficult to read (so the auditors assume that the person doesn’t have the correct licenses).

Here, we have the State Auditor finding that Eastpointe’s former CFO unilaterally hired two contractors to improve Eastpointe’s building (paid for with Eastpointe’s funding), but the former CFO accepting over half a million dollars.  This is no green ink! This is no insignificant finding!!

What is Eastpointe’s funding?

eastpointe funding

As you can see, 72.7% of Eastpointe’s funding is pure Medicaid money. When Eastpointe’s former CFO received $547,595 in kickbacks, 72%, or $394,268.40, should have been used to provide Medicaid behavioral health care services.

These are our tax dollars, people!!  These are our tax dollars budgeted to aid our most needy population with behavioral health care services!!  These are our tax dollars budgeted to provide psychiatric services, substance abuse services, and services for those with developmental disabilities!!!!

Our State Auditor states in her report, “The former CFO may have violated several state laws including fraud, misrepresentation, and obtaining property by false pretenses.”

Let’s look at a couple of those statutes that may have been violated:

42 U.S. Code § 1320a–7b imposes criminal penalties for acts involving Federal health care programs, and federal dollars pay a portion of our Medicaid program.

North Carolina General Statute § 14-234 states: “No public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract except as provided in this section, or as otherwise allowed by law.”

The question becomes was the former CFO of Eastpointe, at the time of the receipt of kickbacks a “public officer” or “employee who is involved in making or administrating a contract on behalf of a public agency?” I believe the answer is yes, at least as to the latter.

Here is the point in this blog that my personal views will be aired. I find the former CFO’s behavior significantly opprobrious and reprehensible.

Here we have an MCO which is in charge of behavioral health care for our most vulnerable and needy populations…not just those in poverty, but those in poverty suffering from mental illness, substance abuse, and/or developmental disabilities (MH/SA/DD). Obviously, those Medicaid recipients suffering from MH/SA/DD will not have the means to hire a private attorney to defend their interests. When they receive denials for authorizations or reductions in services, they are defenseless. Sure, some children have strong advocate parents, but, on the whole, those suffering from MH/SA/DD have little to no advocates.

Juxtapose someone sitting in the role of a CFO…a chief financial officer of a company. Think he or she can hire a private attorney?? Think he or she has advocates or means to hire advocates??
How can someone in power abuse that power to the detriment of the under-privileged and sleep at night? I find the State Auditor’s audit findings repugnant beyond comprehension.

We are left with a former CFO who may or may not have committed criminal activity, but, who, at least according to the State Auditor, has received kickbacks. We are left with questions.

Is it only Eastpointe? Or all 9 MCOs? How much Medicaid money is lining the pockets of MCO executives, instead of paying for medically necessary services for Medicaid recipients?  Will there be justice?

We can only hope that this audit is a catalyst to consequences.

State Auditor Finds Taxpayer Waste at OMMISS!!!!

New State Auditor report investigates the Office of Medicaid Management Information Systems Services (OMMISS) within the North Carolina Department of Health and Human Services (DHHS).

With DHHS’ emphasis on detecting health care providers’ fraud, waste, and abuse (FWA) across the state, it seems ironic that its own agency is deemed guilty of wastefulness by our State Auditor.  What’s that about glass houses……??

What exactly does OMMISS do?  Well, for one, OMMISS works with Computer Sciences Corporation (CSC) regarding NCTracks.  We all know how wonderfully NCTracks has operated since inception….See blog. And blog.

State Auditor Beth Wood finds:

KEY FINDINGS

 At least $1.6 million wasted through excessive wages and commissions, unjustified overtime, and
holiday pay to ineligible employees

 OMMISS Director engaged in or allowed nepotism

 OMMISS Director received unauthorized compensatory time that may result in inflated retirement
benefits

 Reports to General Assembly omitted at least $260,000 of overtime and compensatory time

 Lack of adequate oversight of OMMISS despite findings in prior audit reports

 

NC State Auditor’s Findings May Cause Overzealous Oversight

Ok, so it took me a couple of days to free up some time to discuss the most recent Performance Audit by our State Auditor. This time of year is CRAZY! We had to get our daughter ready for the 4th grade, which entails buying an absurd amount of school supplies. Thank goodness we don’t have to do “back to school” clothes shopping, because she wears uniforms. Yesterday was her first day of school and, apparently, everything went well.

Now, I want to discuss the recent Performance Audit published by Beth Wood, our NC State Auditor, regarding provider eligibility. Prior to going any further, let me voice my opinion that Beth Wood as our State Auditor rocks. She is smart, courageous, and a force of nature. Any comment that may be negative in nature as to the most recent audit is NOT negative as to the audit itself, but to the possible consequences of such an audit. In other words, I do not believe that the Performance Audit as to Medicaid Provider Eligibility is incorrect; I am only concerned as to the possible consequences of such an audit on the Department of Health and Human Services (DHHS) and health care providers.

The Medicaid Provider Eligibility Performance Audit found that “deficiencies in the enrollment process increase the risk of unqualified providers participating in the Medicaid Program.”

And DHHS’ “enrollment review procedures do not provide reasonable assurance that only qualified providers are approved to participate in the NC Medicaid program.”

And “quality assurance reviews were not conducted or were ineffective.”

Basically, the Performance Audit (in layman’s terms) says that DHHS, again, has little to no oversight, lacks supervision over providers, has program deficiencies, and lacks the ability to manage Medicaid provider eligibility requirements adequately. Considering that DHHS is the single agency charged with managing Medicaid in North Carolina, the Performance Audit is yet another blow to the ability of DHHS to do its job.

Gov. McCrory appointed Sec. Aldona Wos as the head of DHHS, effective January 5, 2013. With Sec. Wos at its helm, DHHS has been riddled by the media with stories of management difficulties, high-level resignations, and mismanaged tax dollars. With the amount of media attention shining on DHHS, it is amazing that Sec. Wos has only been there almost a year and a half. Oh, how time flies.

While, again, I do not discount the accuracy of the Medicaid Provider Eligibility Performance Audit, I am fearful that it will spur DHHS to almost another “Salem witch hunt” extravaganza by pushing the already far-swung pendulum of attacks on providers, in the direction of more attacks. DHHS, through its contractors, agents and vendors, has increased its regulatory audits and heightened its standards to be compliant as a provider for a number of reasons:

1. The U. S. Supreme Court’s Olmstead case;
2. The DOJ settlement as to ACTT providers;
3. More oversight by CMS;
4. The ACA’s push for recovery audit contractors (RACs);
5. General need to decrease the Medicaid budget;
6. Increased fraud, waste, and abuse detection standards in the ACA;
7. Monetary incentives on managed care organizations (MCOs) to decrease the number of providers;
8. Etc.

Imagine a pendulum swinging…or, better yet, imagine a child swinging on a swing. Before the child reaches the highest point of the swing, an adult runs behind the child and pushes the child even higher, in order to get a little more “umphf” on the swing. And the child goes even higher and squeals even more in excitement. But that’s not always a great idea. Sometimes the child goes flying off.

I am afraid that the Performance Audit will be that adult pushing the child on the swing. The extra little push…the extra little “umphf” to make the pendulum swing even higher.

As with any Performance Audit, DHHS is allowed to respond to Ms. Wood’s findings. One response is as follows:

“In September 2013, DMA established and implemented Management Monitoring Quality Controls (Monitoring Plan) for reviewing approval and denial decisions related to provider applications referred to it by the Contractor due to a potential concern. The Monitoring Plan established standardized policies and procedures and ensures that staff adheres to them in making enrollment determinations.”

In other words, recently DHHS has put forth a more aggressive oversight program as to health care providers and it will only get more aggressive.

In the last year or so, we have seen more aggressive oversight measures on health care provider that accept Medicaid. More audits, more desk reviews, more fraud investigation…and most (that I have seen) are overzealous and incorrect.

Believe me, I would be fine with increased oversight on health care providers, if the increased oversight was conducted correctly and in compliance with federal and state rules and regulations. But the audits and oversight to which I have been privy are over-bearing on providers, incorrect in the findings, and lacking much of due process for, much less respect to the providers.

I am concerned that the extra little “umphf” by this Performance Audit will impact health care providers’ decisions to accept or not to accept Medicaid patients. See my past blogs on the shortage of health care providers accepting Medicaid.  “Shortage of Dentists Who Accept Medicaid: The Shortage Continues.” “Provider Shortage for Medicaid Recipients.” And “Prisons and Emergency Rooms: Our New Medicaid Mental Health Care Providers.

Instead of increasing overzealous audits on health care providers, maybe we should require DHHS, through its contractors, agents, and vendors, to conduct compliant, considerate, and constitutionally-correct audits and oversight. Maybe the “umphf” should be applied more toward DHHS.

Can DHHS Do Anything Right? State Auditor Finds DHHS’ Provider Eligibility Screening Lacking!!

A new audit by the State Auditor shows ANOTHER problem at DHHS.  This comes on the heels of another audit earlier this month finding that NCTracks is problematic.

Here is the link: State Audit

More commentary to come this evening when I have time to write about the tomfoolery occurring at DHHS

NC State Auditor Releases New NCTracks Audit: Unresolved Risks Could Delay Federal Certification

This just in!!!!

Our State Auditor Beth Wood just released a new audit entitled, “Department of Health and Human Services-NCTRACKS-Federal Government Certification Status.”

NCTracks audit

 

More to come…

Medicaid Mishaps Cause Tempers to Flare

Here is an interesting article…

Article from Carolina Journal Online by Dan Way:

RALEIGH — With $2 billion in cost overruns the past four years, Medicaid continues to be North Carolina’s most volatile political conundrum, and now unanswered questions about its spending and growth threaten to delay passage of 2014-15 state budget adjustments before next Monday’s deadline.

Things got nasty in a Senate Appropriations Committee meeting last week, and one is left to wonder whether Gov. Pat McCrory and the state Department of Health and Human Services squandered political capital by snubbing budget writers struggling with alarming lapses in vital Medicaid data.

Medicaid “is the linchpin” to writing the 2014-15 budget, said an irritated Sen. Bob Rucho, R-Mecklenburg. “Would someone explain to me why we don’t have [Office of State Budget and Management] or staff people from DHHS here to help us get to an answer so that we can move this budget forward?”

If not a prairie fire, the meeting at least exposed the slow burn of senators handcuffed by a dearth of crucial budget numbers from DHHS. Capital press corps reporters instinctively asked one of their most oft-repeated questions: Is DHHS Secretary Aldona Wos to blame for yet another major Medicaid predicament?

Due to significant backlogs, DHHS cannot provide accurate Medicaid enrollment numbers, valid claims data, and categories into which new enrollees are entered. Without precise, up-to-date information for this fiscal year, drafting an accurate budget for 2014-15 is impossible.

That’s a tough corner to be backed into for McCrory and Wos, who have made Medicaid budget predictability a holy grail.

The exasperation of Sen. Tom Apodaca, R-Henderson, typified the level of lawmaker frustration.

“If push comes to shove,” he said, “we can always issue subpoenas and have the numbers come to us. So let’s not take that off the table.”

The irritability in Senate Appropriations was bipartisan.

“Will we ever know what we need to know?” Sen. Angela Bryant, D-Nash, asked incredulously. “Do we have to be completely at the mercy of executive branch agencies on an issue like this that is so critical to what we do?”

Senate leader Phil Berger, R-Rockingham, explained, in measured but heart-attack serious tones, why there is an elevated sense of urgency, and why he had wanted someone from the budget office at the Appropriations Committee meeting to explain Medicaid numbers that have swung from wildly varying to unaccounted for.

“Our feeling is we need to reach some understanding on the Medicaid number before we can realistically start talking about most of the other things,” including teacher pay raises and pay hikes for state workers, Berger said.

And then there was this jaw-dropping exchange between Sen. Joel Ford, D-Mecklenburg, and Susan Jacobs of the legislative Fiscal Research Division.

“Based upon the uncertainty and the lack of data, how can we say for certain that people are not being overpaid or underpaid?” Ford asked.

“We probably can’t say that,” responded Jacobs. She also dropped a bombshell that it could be “probably late next year” before all necessary numbers are completely and accurately obtained.

“To me that is a very disturbing scenario where we are taking taxpayer money with good intentions, but with no verification that we’re doing the right thing because of a broken system,” Ford said.

Whether he realized it, Ford’s characterization of Medicaid as a broken system oozed irony.

In one of their first official acts upon assuming office in January 2013, McCrory and Health and Human Services Secretary Aldona Wos lambasted the state’s Medicaid program as a chaotic, broken system. Eighteen months later and holding Swiss-cheese Medicaid reports, state senators are grumbling that the agency’s disarray persists.

Pressed by reporters, Berger stopped short of saying he has lost confidence in Wos’ leadership.

“I’ll leave it to others as to why they’re not able to provide that information,” he said, but he insisted this budgeting fiasco shows the need to remove Medicaid from Wos’ control and make it a standalone agency.

The Senate budget calls for $88 million more in Medicaid spending in 2014-15 than the House version. Berger said the Senate used higher, worst-case-scenario numbers.

Berger and his counterparts rightly expressed no appetite for once again using rosy projections only to find out halfway through the budget year that there is a whopping shortfall.

To make matters worse, Senate Majority Leader Harry Brown, R-Onslow, said Fiscal Research staff isn’t even confident the worst-case numbers are sufficiently high. “I think that’s important to make sure everyone understands it.”

Sen. Louis Pate, R-Wayne, co-chairman of the Senate Health and Human Services Appropriations Subcommittee, agreed with frustrated Fiscal Research staff that much of the problem with missing data stems from NC Tracks, the new but deeply flawed Medicaid billing system.

But he was quick to note that Republicans inherited the woefully underperforming computer system that was in development for years under Democratic administrations.

“I don’t know if they made up-to-date adjustments as they went along, and we don’t know if it was tested properly before it went live,” Pate said. Others, including State Auditor Beth Wood, warned last year that the nearly half-billion-dollar system was not ready to launch.

Wos lost control and never regained the upper hand in messaging after she defiantly promised she was going to drag the long-beleaguered NC Tracks over the July 1 finish line, and declared it sound when she did.

The bravado and exuberant can-do proclamations might have seemed politically appropriate for a new administration seeking to position itself as an intrepid change agent.

But Wos would have been wise to have tempered her rookie remarks with caveats about the huge challenges left behind by previous Democratic administrations, downplayed expectations, and more candidly acknowledged what IT skeptics already knew — the system was going to encounter plenty of rollout problems that would require a long time to correct.

Pate was among those declaring that the current Medicaid budgeting calamity further demonstrates the “critical necessity for reorganization” of the agency. But restructuring has been hampered by the unsteadiness of tectonic policy shifts.

Pate is among senators who continue to oppose the latest reform plan favored by McCrory and Wos, and now in bill form in the House. He said the proposal only tinkers around the edges of budget predictability and restraint.

This latest iteration is an accountable care model comprising networks of doctors and hospitals. It was rolled out after the administration’s stunning U-turn from months of championing full-risk managed care, and scoring a coup in recruiting Carol Steckel, a highly sought, nationally renowned expert on Medicaid managed care.

Steckel, former head of the National Association of State Medicaid Directors, left her $210,000-a-year job in North Carolina last September after only eight months working for Wos.

Whether there was a back-story to the swift departure of a highly heralded Medicaid reformer, much like what this year’s Medicaid numbers are, remains a guessing game.

$12 Million of Illinois Medicaid Dollars Paid for Services Rendered to the Deceased

Who would want state Medicaid dollars paying for services that are not medically necessary?  What about services getting paid out for services rendered to dead people?

I mean, I am no doctor, but I fail to see why someone who is deceased would need dentures, dialysis, or a wheelchair.

Yet, the state of Illinois recently identified that it paid overpayments for Medicaid services to roughly 2,900 people after the date of their deaths, equaling approximately $12 million.  See AP story.

How do state agencies verify eligibility for the multi-million number of Medicaid recipients within a state? Or, for that matter, how does the federal government determines eligibility for the nation’s Medicare population?  Determining eligibility for Medicaid and Medicare is a large-scale, daunting task for both the federal government and the state government.

A key component of Medicaid and Medicare eligibility is that the person receiving the services is alive.  Yet Illinois failed to check on the status of Medicaid recipients’ lives.

Improper payments of $12 million for Medicaid services delivered to the deceased are, obviously, disconcerting for taxpayers.  We want Medicaid services to be provided to those people who need the services, and I cannot fathom what Medicaid services a deceased person would need.

Apparently, who determines Medicaid eligibility in Illinois has been a hotly, disputed and ideologically polarized debate.  Illinois had hired Maximus Health Services, a private company, to verify Medicaid eligibility, including determining which recipients passed away. The company was said to be achieving a Medicaid eligibility-removal rate of 40 percent.  Last year the contract between the state of Illinois and Maximus ended and the work was transferred into the hands of state employees.

The question remains in my mind, however, who has the duty to inform the state that a Medicaid recipient has passed away?  Is the burden on the state employees to discover the deaths, as it appears to be in Illinois? Are Medicaid providers continuing to bill for deceased recipients?  Obviously the deceased person does not have the burden to inform the state of his or her passing.  Where should the responsibility lie? And where does it lie?

Illinois Governor Pat Quinn blamed the managed care companies.  He stated that, in most of the cases that managed care insurance companies incorrectly billed for Medicaid services for deceased people.

This brings up another entity on which the burden of discovering the deaths of Medicaid recipients may lie.

We, in North Carolina, have a messy, unsupervised managed care organization (MCO) system for those suffering with mental health issues, are developmentally disabled and suffer from substance abuse.  We currently have 10 MCOs, which are all in the process of merging to form only 3-4.  Are the MCOs responsible for knowing when Medicaid recipients die?

Our State Auditor, Beth Wood, has not conducted a similar audit in North Carolina, to my knowledge, but it would not surprise me if NC is also providing Medicaid services to the deceased.

To my knowledge, the federal government has not conducted an audit of the Medicare services to determine whether Medicare funds are being spent on the deceased.  Again, I would not be surprised to discover that Medicare funding is being spent on those whom have passed.

This is yet again another example of how the failure of the state government to supervise itself and its contractors costs taxpayers money.