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Embezzlement at MCO Eastpointe and the Freedom of Information Act

How many times have I blogged about the unsupervised, unharnessed actions of the managed care organizations (MCOs) in our State, which happen to be managing billions of our tax dollars for Medicaid behavioral health care? These MCOs, which are in the process of consolidating to create even larger MCOs and to handle even more tax dollar money, are running rampant and unsupervised by the Department of Health and Human Services (DHHS). See blog. And blog.

DHHS is the single state agency charged with managing Medicaid for NC. According to federal law, the single state agency may not delegate certain duties. Our 1915 b/c Waiver allows DHHS to waive some duties related to behavioral health, but not all. For example, it is, ultimately, DHHS’ duty to ensure that our Medicaid recipients have access to care.

It is, ultimately, DHHS’ duty to ensure that the MCOs are following the law.

However, recently, that duty was picked up by the State Bureau of Investigation (SBI). Thank goodness someone is reviewing the MCO’s books!

SBI arrested former Eastpointe CFO William Robert Canupp on December 16, 2015, for nine charges of financial fraud and embezzlement. Eastpointe is one of our MCOs and manages behavioral health care for Medicaid and state-funded programs in 12 counties. These allegations of fraud and embezzlement are from when Canupp worked at Eastpointe.

This recent arrest demonstrates a real need for accountability at the MCOs. While Eastpointe and the other MCOs are terminating health provider contracts and denying/reducing services, who is reviewing these decisions. Apparently, not DHHS.

What can you do?

As you should know, the MCOs are not private entities. They are agents of the state and receive funding from county, state, and federal funds. In other words, the MCOs manage and spend our tax dollars. Therefore, these entities are liable to us for all expenditures and are subject to the Freedom of Information Act or FOIA. The FOIA allows any one of you to request any financial record, any document showing access to care, any document showing monies spent on actual care versus administrative costs, or any other information you desire and the MCOs must provide it to you.

Here is a link to a sample public records request.

The MCOs are bound by NC General Statute, Chapter 132 and must allow you to examine any requested documents within a reasonable time.

Use the FOIA to get answers!

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

 

Lawmakers Demand Accountability as to NCTracks Debacle (Finally) and the Action of Nonaction

Yesterday (11/20/13), State Auditor Beth Wood appeared before the Joint Program Evaluation Oversight Committee meeting.  Lawmakers and Wood criticized NCTracks, its rollout, and the lack of accountability on the part of the administration. Sen. Stan Bingham, R-Davidson, even asked whether criminal charges could be filed against whomever was in charge of the NCTracks rollout. 

Criminal charges!!

There is little disagreement that the rollout of NCTracks has been a complete CATASTROPHE.  NCTracks went live July 1, 2013, and the past 143 days have been nothing short of a hair-pulling-out, feet-stomping, spit-wielding debacle for most providers. So lawmakers, as the health care providers have been asking for the past 143 days, ask, “Who is to blame?”

Who is to blame?

  • The Department of Health and Human Services (DHHS)?
  • Computer Sciences Corporation (CSC) (the company who designed NCTracks)?
  • Independent Verification and Validation (IV&V) Contractor? (the third-party contractor hired for independent verification and validation of NCTracks)?
  • Governor Pat McCrory?
  • Secretary Aldona Wos?

No one in the administration is stepping up to accept accountability.  The vendors are not accepting responsibility.  It is as if the Department of Health and Human Services (DHHS) is just standing there…watching the debacle…doing nothing.  I am reminded of Dr. T.J. Eckleburg.  Anyone remember who Dr. Eckleburg is?

Dr. T.J. Eckleburg’s spectacled eyes are a powerful symbol in The Great Gatsby, one of my favorite novels of all time, written by F. Scott Fitzgerald.

Dr TJ Eckleburg

Originally, the billboard was erected to promote Dr. Eckleburg’s optometry practice.  The eyes are supposed to symbolize commercialism and the greed of America, but the billboard is neglected and the eyes remain throughout the story to symbolize God watching over Nick Carraway and the other characters.  The eyes seem to be an all-knowing and all-powerful figure over the characters. The eyes frown down on the characters and judge their actions.

Wilson equates T.J.’s eyes to the eyes of God. He recounts to Michaelis what he says to Myrtle after discovering his affair, “‘and I said “God knows what you’ve been doing, everything you’ve been doing. You may fool me, but you can’t fool God!”” However, Michaelis tries to point out to him that “It’s just a billboard.”

Maybe it is not just a billboard. 

Throughout The Great Gatsby, Eckleburg’s eyes watch.  Yet, in the novel, God, symbolized by Dr. T.J. Eckleburg’s spectacles, seems to have abandoned America, leaving only Dr. T.J. Eckleburg behind to stare down with his empty eyes.  Dr. T.J. Eckleburg never moves…never speaks. Yet, Fitzgerald creates this looming, unmoving billboard and characterizes the billboard as God.  And who is more in charge than God?

Similarly, (not as to God, but as to Dr. T.J. Eckleburg), DHHS is supposed to be the all-knowing and all-powerful head of North Carolina Medicaid. 

42 C.F.R. 1396a(5) requires the State Plan to “either provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan; or provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan.”

That single state entity is DHHS.

DHHS is charged with watching over all things Medicaid.  DHHS is our Medicaid Dr. T.J. Eckleburg.

When State Auditor Wood was asked by legislators who is to blame, she answered, “The agency.” As in, DHHS.  “Accountability comes at the secretary level, those that report to the secretary, and the governor.”

If DHHS is in charge and Secretary Wos is in charge of DHHS, then (going back to Logic 101) Wos is to blame for the NCTracks debacle.  Right? 

Before jumping up and down and blaming Secretary Wos for NCTracks, remember that it was the prior administration that began the whole NCTracks idea in the first place.  Wos did not come to NC and say, “Hey, let’s change the Medicaid billing system.  There is this company CSC that will be so perfect for the job.  Let’s pay them a ton of money to revamp the entire system.”  No, Wos came to NC with NCTracks already begun.  The past administration started this little ball rolling.  Wos stepped in when the ball was huge and its inertia kept it going…or should we say Wos did not stop the rolling ball.

Does that exonerate Sec. Wos from any accountability and/or blame for the current state of mess Medicaid is now in due to NCTracks? Absolutely not.  It is without question that Sec. Wos is charged with managing DHHS.  It is without question that Sec. Wos has not accepted the accountability of the NCTracks debacle.  Shoot, she hasn’t even admitted there is a problem!! Isn’t admitting there is a problem the first step?

Someone at DHHS made a fatal flaw in implementing NCTracks.  Someone told HP Enterprises to take a hike without ensuring that NCTracks would work.  That is like walking a tight rope with no net!  And that fatal decision is on this administration.

Like Dr. T.J. Eckleburg, DHHS is watching over Medicaid.  And like Dr. T.J. Eckleburg, DHHS is unmoving and silent.

DHHS cannot be a billboard.  Nonaction is not an option.

Senator Bingham asked whether we could fire anybody (whomever was in cgarge of the debacle).  To which, Wood stated, in her normal, no-nonsense manner, “I don’t have a problem firing anybody.”

One News and Observor editorial wrote, “What Wos should have told lawmakers wasn’t that she’s pressing DHHS staff and its computer vendor to pay people who are owed. She should have said, “We thought we were being frugal and instead we were reckless and it has cost everyone a great deal. I take responsibility. I apologize. And I’m determined to keep learning from my mistakes to fulfill the mission of my department.”  Instead, she told the committee, “I assure you that where necessary, I will hold people accountable.”  Excepting herself, of course.”

Right now DHHS is just a billboard.

In fact, maybe the most important nonactions to note are what Sec. Wos is NOT doing.  She has has NOT blamed CSC.  She has NOT condemned CSC.  She has NOT had heads rolling at CSC.   Sec. Wos has NOT publicly spoken disparagingly about CSC’s implementation of NCTracks.  She has NOT terminated CSC’s contract.  To my knowledge, she has NOT asked for help from HP Enterprises.  Right now, DHHS is nothing more than a billboard, a symbol of Medicaid, but doing nothing.

In fact, on Tuesday, DHHS representatives tried to tell the Joint Program Evaluation Oversight Committee that NCTracks was improving and its “trajectory is good.”  Doing nothing…just watching…

In The Great Gatsby, Dr. T.J. Eckleburg’s eyes never change.  They continue to watch.  Unlike Dr. T.J. Eckleburg, Sec. Wos can move.  She needs to move. 

Yet, whereas Wood said that she doesn’t have a problem firing anybody, Wos stated on Tuesday “that, where necessary, I will hold people accountable.” 

Where necessary?? 

Aren’t we to “where necessary” yet?  143 days after the catastrophic implementation of NCTracks and the mess is not fixed….don’t you think it is necessary to hold someone accountable??

Oh, and by the way, during these past 143 days since NCTracks’ implementation, who is getting harmed?  The doctors, the dentists, the in-home health care providers who are not receiving proper Medicaid reimbursements.  And then who suffers? The Medicaid recipients because providers stop accepting Medicaid.  In a Medicaid system that already discourages providers from accepting Medicaid, NCTracks is certainly not helping.  Counting business damages, loss of clinical time, and unpaid claims, can you imagine the invoice that the harmed providers should serve on DHHS??   Maybe the invoice sent to DHHS should give DHHS 15 days to request a reconsideration review.

One thing is for certain, DHHS (whether or not through Wos) must stop merely being a symbol of Medicaid, a billboard, and start acting… and be accountable.

Because after 143 days of this hair-pulling-out, feet-stomping, spit-wielding debacle for most providers, there aren’t many more hairs, stomps, or spit.

To Decrease Medicaid Spending (Without Decreasing Medicaid Recipients’ Services), Drastic Administrative Cuts Are Needed

It is indisputable that reigning in Medicaid costs is one of this administration’s top priorities.

And, I agree, reigning in Medicaid costs should be a top priority.  In fiscal year 2011, it is estimated that Medicaid comprised 23.6 percent of total state expenditures (average of all states).  My only concern is reigning in the appropriate Medicaid costs without interfering with Medicaid recipients’ medically necessary services.  A Medicaid budget cut (or reigning in Medicaid spending) should not be painfully felt by the Medicaid recipients by increased denials of services or by their providers being terminated from the Medicaid program without cause.  Instead a Medicaid cut should be felt by the administration. 

The Medicaid budget exists in order to provide medically necessary services to the most needy, not to create jobs at the Department of Health and Human Services (DHHS).

“About $36 million a day we spend on Medicaid, and the numbers grow by the second. It is a non-sustainable system,” Wos said to members of the Medical Care Commission this past Friday.  For the article, please click here.  The Medical Care Commission is a governor-appointed medical advisory group made-up of 16 North Carolinians and charged with the responsibility of recommending Medicaid cost control and budget predictability. (Actually, it is interesting that when you look at the NC DHSR website (click on Medical Care Commission) that the website states that the commission is composed of 17 individuals.  But when you count the individuals, only 16 are listed.  I assume that Gov. McCrory or Sec. Wos is the 17th member, but I am not 100% sure).

While I agree with Sec. Wos that continuing to spend $36 million a day and, perhaps, more in the future, is a non-sustainable system, I also believe that we could decrease Medicaid spending without decreasing services to recipients. 

The Medical Care Commission’s chairperson, Ms. Lucy Hancock Bode “served as the Deputy Secretary of the North Carolina Department of Human Resources from 1982 to 1984. She has been an Independent Trustee of Tamarack Funds Trust and various Portfolios in the fund complex of Tamarack Funds since January 2004. She served as a Director of BioSignia, Inc.”  See BusinessWeek.

The Vice-Chairperson, Joseph D. Crocker, “is Director of the Poor and Needy Division at Kate B. Reynolds Charitable Trust in Winston-Salem, North Carolina, where he has served in such capacity since May 2010. Mr. Crocker served as Assistant Secretary for Community Development at the North Carolina Department of Commerce in Raleigh, North Carolina, from 2009 to 2010.  See Forbes.

Well, goodness, the appointees can be found in BusinessWeek and Forbes!! Who else is on the Medical Care Commission? The grandson of the founder of the Biltmore Estates, 6 MD’s, the ex-CEO of FirstHealth of the Carolinas, the Vice President and Director of the Health Care Program for The Duke Endowment, the President and CEO of Coastal Horizons.  My guess is that not one of the appointees to the Medical Care Commission has ever depended on Medicaid for insurance nor been personally acquainted with those dependent on Medicaid. How will these elite (which I am defining as making a salary well-over poverty level for years and years) help “adopt, recommend or rescind rules for regulation of most health care facilities,” and help “[b]e able to provide the proper care to the proper people at the proper time and at the proper price?”  How does the person making $13.8 million truly understand the troubles and turmoil of someone making $9.00/hour?

I recently read an article about McDonald’s and its low wages it pays to its employees.  The article pointed out that most McDonald’s employees received minimum wage, the median hourly wage is $9.00/hour.  McDonald’s also recommends that its employees file for food stamps and welfare.  Then I read that the CEO of McDonald’s is paid $13.8 million/year.  That’s over $1 million/month!!! That is stupid money!! What in the world does Donald Thompson do with that much money?  When Mr. Thompson encourages his employees to file for food stamps and welfare programs, how can he, making $13.8 million/year, have an inkling as to the daily troubles of an employee making $9.00/hour…how difficult it can be to maneuver government beaurocracy…to even get authorization to receive the food stamps…only to discover that the legislature suspended the distribution of food stamps this week…

(A quick aside, for those of you thinking right now, “What about you, Knicole? You are a partner at a big law firm? How can you protest to know anything about the $9.00/hour employee? Without getting too personal, I have not always been employed at a law firm.)

Had I been in McCrory’s position of appointing the folks onto the Medical Care Commission, I would have wanted at least one appointee to have either been personally dependent on Medicaid, been a case manager exclusively for Medicaid recipients, or, in some way, dealt with Medicaid recipients on a close, personal level.  In other words, I would have wanted at least one appointee to understand the real-life difficulties actually suffered by Medicaid recipients.  If I were a CEO of a company for 20 years, how would I know that medically necessary services are being denied to Medicaid recipients?  How would I know that when a mother calls to make a dental appointment for her child that it can take months to be seen by a dentist if you are on Medicaid? How can the social elite understand the frustrations of Medicaid recipients? They have never been turned down by a doctor because of the insurance they have.

I called a few of the offices of the 6 MDs appointed on the Medical Care Commission and learned that those offices I called accept Medicaid, which relieved me.  But I would be interested in knowing what percentage Medicaid clients each office accepts.  And how closely the MDs work with Medicaid recipients (do the MDs appeal denials for their clients’ services and appear and testify on their behalf in court?)

A funny thing happens when you’ve made a lot of money over a number of years…you forget how important $20 can be to a single mom with rent to pay and a kid with a tooth ache.  I would also assume the same thing happens when you are Governor or Secretary…you forget how debilitating a service denial is and how scary the prospect of an appeal can be.

Going back to reigning in Medicaid costs:

Is there a way to decrease spending on Medicaid without compromising medical services.  Is there even a way to decrease Medicaid spending while providing better medical services to Medicaid recipients…? Could it be possible?? I believe so.

How many times have you heard the administration state that the Medicaid system is broken and the money spent on Medicaid is non-sustainable? And what about the Performance Audit conducted by the Office of the State Auditor?  The January 2013 Performance Audit revealed that almost 1/2 of the Medicaid administrative expenditures in the 2012 fiscal  year went to private contractors…such as the managed care organizations (MCOs), Public Consulting Group (PCG), and the Carolinas Center for Medical Excellence (CCME).  Another huge expenditure is the administrative costs for the Department of Health and Human Services (DHHS)…think about it…DHHS employs approximately 70,000 people at an average salary of $42,000.  Add up the costs associated with private contractors and the administrative costs of DHHS, and the sad truth is that not even a quarter of the Medicaid budget goes to paying Medicaid recipients’ actual services.

Remember my blog: “How Dare They! That Money Could Have Been Used on a Medicaid Recipient!”

Remember the January 2013 Performance Audit of DHHS

Another contributing factor to the high amount of North Carolina’s administrative spending is insufficient monitoring of administrative services that are contracted out by DMA. Private contractor payments represent about $120 million (46.7%) of DMA’s $257 million in administration expenditures for SFY 2012. It is always important for a state government to even more critical when almost half of the administrative expense is made up of contract payments. Although contract payments represent a high percentage of its administrative budget, DMA was not able to provide a listing of contracts and the related expenditures in each SFY under review for this audit. DMA’s inability to provide this information is indicative of its inadequate oversight of contractual expenditures. The initial list DMA provided only included amounts expended to date per contract. However, we were able to eventually obtain contracted service expenditures for FY12 and compile this information.”

Inadequate oversight of contractors…Hmmmm…

In order to decrease Medicaid spending, how about a little thing I like to call: ACCOUNTABILITY!?

As in, if DHHS contracts with an entity that spends too much Medicaid money on “extras,” then DHHS must instruct the entity to cease the “extra” spending.  This is our tax money, remember!! For example, everyone knows that attorneys are not cheap, right? At hearings, the MCOs usually have in-house counsel  or retain the county attorney.  But two MCOs, Cardinal and MeckLINK (yes, MeckLINK, despite MeckLINK’s solvency issues) have hired an expensive and prestigious law firm.  There is no question that the law firm has experienced, excellent attorneys.  But who is paying for the expensive attorneys’ fees? Medicaid dollars? You? Me? I thought about these questions when, at a recent hearing three attorneys appeared on behalf of the MCO.  Let’s see…$450/hour + $350/hour + $275/hour = $1075/hour?  And who is paying?  (Obviously, I made these numbers up, but I dare say they are close estimates).

By the same token, DHHS needs to monitor its own expenses.  I can only imagine how difficult it is to monitor 70,000 employees.  At any given time, thousands may be on Facebook, cell phones, or surfing the web.  I am not suggesting that Sec. Wos turn DHHS into a sweat shop, by any means.  No, I am merely suggesting that a way to decrease money spent on Medicaid is to conduct a self-audit and determine that if 3 people are doing the job that 1 person could do, only employ the one person.  Just like, DHHS would be accountable if PCG used Medicaid dollars to pay for in-office massages for employees.  Medicaid dollars should be spent on Medicaid recipients.  DHHS should be accountable for superfluous spending.

With all these newly- contracted entities working for DHHS (and getting paid by DHHS), where is the savings in Medicaid spending?? To my knowledge, there has not been a huge slash in jobs at DHHS…the salaries and administrative costs at DHHS have not decreased drastically…no, instead, we’ve hired MORE companies and we are paying MORE salaries!! How will hiring more contractors decrease Medicaid costs if we are not decreasing our administration overseeing Medicaid?  We all know that no one wants to be the administration who cut government jobs, but if you truly want to decrease administrative costs, you have to decrease the cost of the administration, especially if you are hiring companies to do what the administration used to do.

Going to McDonald’s low wages and ridiculously, high-paid CEO, obviously, McDonald’s is a private company and is entitled to pay its CEO $13.8 million/year and its employees an hourly median wage of $9.00/hour.  McDonald’s only has to answer to its shareholders.

DHHS, on the other hand, is not a private company.  DHHS is funded by tax dollars and is accountable to every taxpaying citizen of North Carolina.

Want to decrease Medicaid spending while providing the medically necessary services to our most needy?  Cut the administrative costs…eliminate unnecessary staff (no matter how unpopular the idea is)…actively monitor the expenses of all contracted entities…provide the medically necessary services to Medicaid recipients (thereby decreasing the need for the more expensive ER visits and incarcerations)…

Cease all unnecessary administrative costs!  Be accountable!  Self-audit! Closely monitor all contracted entities’ expenditures!!

And, remember, hiring a third-party company costs money…real money…tax payer’s money!  If the hiring of the company is not offset by a reduction in spending elsewhere, the result is increased overall spending.  It isn’t hard, people…this is Logic 101.  So when DHHS hired PCG or CCME or HMS, the administration should have decreased Medicaid spending elsewhere just to break even (as in, just to continue our high Medicaid spending).  To decrease spending along with hiring third-party contractors, we have to severely and drastically decrease Medicaid spending.  In order to avoid reducing Medicaid recipients’ services, a decrease in Medicaid spending calls for the drastic action of slashing administrative costs.

It isn’t fun, but it is necessary.

NC Taxpayers Demand Accountability as to Behavioral Health Care Medicaid Funds (And That Medicaid Recipients Reap the Benefit of Such Funds).

I ask you, why do employees of an MCO receive better health care plans with Medicaid dollars than a Medicaid recipient with Medicaid dollars?

The State of North Carolina is accountable to me, and every taxpaying citizen, for taxes spent. 

Similarly, executives of a corporation owe a duty to shareholders to account for stock crashing.  Remember Enron? What a disaster!

Enron has been dubbed the biggest audit failure.  Enron shareholders filed a $40 billion law suit after the company’s stock price, which achieved a high of US$38.44 per share in mid-2000, plummeted to less than $1 by the end of November 2001.  And why did the shareholders sue?  Because they lost money?  Well, yes, but it is much more.  The reason the shareholders lost money is because the executives of Enron owed a duty to the shareholders, basically, to be accountable to report correct data on financials.

Apparently, Enron’s financial statements were complex and confusing to shareholders.  It has been said that from 1997 until its demise, “the primary motivations for Enron’s accounting and financial transactions seem to have been to keep reported income and reported cash flow up, asset values inflated, and liabilities off the books.” Bodurtha, James N., Jr. (Spring 2003). “Unfair Values” – Enron’s Shell Game. Washington, D.C.: McDonough School of Business. p. 2. CiteSeerX: 10.1.1.126.7560.  Arthur Anderson was the audit and accounting firm, which also went belly up due to Enron.  But Enron’s financials were false and, ultimately, led to numerous convictions.

Now, I am certainly NOT comparing the State of North Carolina to Enron.  I am merely providing an example of a possible result when accountability is ignored.  When the fiduciary duty owed is not fulfilled.

Not completely unlike corporate financials, North Carolina creates a budget every fiscal year (yeah, I get it, not completely similar either). 

When the Medicaid budget is created each year, which is more than $18 billion, I, as a taxpayer, expect those Medicaid dollars allocated to the Medicaid budget to be spent for the benefit of Medicaid recipients.  Medicaid money should be spent on Medicaid providers, who service Medicaid recipients.  I expect that administration costs be kept at a minimum.  I expect that Medicaid providers receive timely, prompt payments, and I expect that Medicaid recipients receive good, quality, and continuing health care.

I do not expect the State to cover the health care for everyone.  Not even most people.  I understand that funds are not limitless in government and that there must be limitations on spending, otherwise our great State will become another Detroit. 

However, I do expect that the funds that ARE allocated to Medicaid to BE allocated for the benefit of the Medicaid recipients. Period.

In the past year, we have implemented the Managed Care Organizations (MCOs) to manage Medicaid behavioral health care.  In theory, the MCOs were implemented to cut down the administrative costs for DHHS.  Basically…outsourcing.  In theory, it sounds good.

DHHS’ administration costs are out-of-control.  After the January 2013 Performance Audit on DHHS, State Auditor Beth Wood said North Carolina’s administrative costs are 38 percent higher than the average of nine states because of “structural flaws” in how DHHS operates the Medicaid program.

So, in response to these high administrative costs (among other things), we took the administration of behavioral health from DHHS and delegated that administration to the MCOs.  With the number of employees in Health and Human Services over 17,000 employees and the average MCO employing only a couple hundred, it seems, on its face, to be a good idea.  Surely these MCOs can and will run more efficiently that the government! Right?

(The other assumption in outsourcing is that DHHS administrative costs would actually decrease due to the MCOs, but I have seen no indication of this). I have seen no indication of the “structural flaws” in how DHHS operates the Medicaid program being fixed.

According to the website indeed.com, the average salary for a person working at NC DHHS is $47,000.  In addition to the average salary, you also need to contemplate that employees of NC DHHS qualify for basic health benefits at no cost.  However, if a DHHS employee wants to have his or her spouse covered or an insurance plan above the “basic plan,” there is a nominal cost. (The standard plan (above a basic plan) for an employee is still low, only $22.76/mo).

Health insurance premiums are a HUGE expense.  So when calculating salaries, if an employee receives free health care, in essence, the salary is higher…due to not having to pay premiums every month.  Health care premiums add up.  For example, I pay $750.00 monthly for health insurance for me and my husband. That’s $9000/year! Yikes!! (No, for real, yikes!!)  If Williams Mullen paid my health insurance premium, in essence, my salary would increase by $9000/year.

Including health care and trying to underestimate instead of overestimate, I calculate the average salary, including health care premiums, at NC DHHS at about $52,000-ish.

Since the MCOs went “live,” the Medicaid tax dollars that would have been held by NC DHHS, are now divvied up and bestowed upon each MCO.  Today, we have 11 MCOs, but soon Smokey Mountain Center will take over Western Highlands, bringing us to 10 MCOs.  Plus, according to a recent article published, “Frustrations With MeckLINK Grow as Denials for Care Increases,” MeckLINK is financially unstable.  We may soon be down to 9.  But, as for now, 11 MCOs receive the federal and state tax dollars for Medicaid behavioral health.

Key point? Tax dollars.

CenterPoint Human Services (CenterPoint), one of the MCOs, staffs approximately 200 employees (about 19 part-time). Out of the 200-ish employees, 41 employees receive salaries over $75,000 (including health care).  Almost 1/4 of CenterPoint’s employees have salaries OVER $75,000. 

145 employees receive salaries over the NC DHHS average salary: $52,000. 

Let’s talk about the price of health care.  Remember, these are OUR tax dollars.

Employee A has a base salary of $45,500.  But A received $16,965 in medical contribution.  Remember, my insurance for me and my husband costs $9,000/year.  For $16,965, how big of a family are we taxpayers covering?

Employee B has a base salary of $43,500. (Now, let me preface this example with…I hope…I pray…that this one example is a typo on CenterPoint’s financials, because, if not, this is outrageous!).  According to CenterPoint’s financials, Employee B gets $84,658 in medical contributions. Including FICA contribution, dental, short and long-term disability, 401K, etc., Employee B receives $136,716 in total compensation.  Admittedly, I have no way to confirm whether this is a typo….and, I must admit, I really hope it is. Regardless, according to CenterPoint’s financials Employee B receives $84,658 in medical contributions for a total of $136,716 total compensation, but with a base pay of only $43,500.

But here it is in black and white (and yellow) (toward the bottom):

Health Insurance

Three other employees, C, D, and E, have base salaries of $49,750, $49,000, and $47,100, respectively, and medical contributions of $12,007 each.  And here I thought MY health insurance was expensive…

The number $12,007 is popular.  12 employees in total receive $12,007 in medical contributions for a total of $144,084 (for 12 employees).

Another employee gets $16,965 in medical contribution with a base salary of $47,100.

Now let’s talk about the Medicaid recipients’ behavioral health care services.

Since the MCOs went live, it is indisputable that less behavioral health services are being authorized by the MCOs.  (Why the government has not addressed this tragedy, I do not know).  Another question is how many less behavioral health care servies?  I have my suspicions that if we were shown the number of behavioral health care services authorized last year compared to this year, the line would look like \. 

Remember the chart from yesterday?

MeckLINK_June_Slide

And this chart only shows one county. One MCO.

NC DHHS is handing over millions (just the behavioral health portion of the Medicaid funds) of Medicaid dollars to the MCOs.  But the money is not going to service Medicaid recipients.  The Medicaid dollars are paying salaries at every MCO, as well as the employees’ families’ health insurance plans.  What Medicaid funds go to the recipients for medically necessary services?  Seems to decrease every day.

I ask you, why do employees of an MCO receive better health care plans with Medicaid dollars than a Medicaid recipient with Medicaid dollars?

Aren’t Medicaid funds supposed to be for Medicaid recipients?

Maybe instead of all this administrative waste, we should just buy private health insurance for all Medicaid recipients. It would probably be cheaper.  And the medically necessary services would

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                                                                                                                     LIKE

                                                                                                                            THIS.

Going back to the State of North Carolina’s accountability to me and all taxpayers as to Medicaid tax dollars spent, I have not seen any investigation as where the behavioral health care Medicaid money is being spent.

The same article from above stated something that made me extremely concerned.  In “Frustrations With MeckLINK Grow as Denials for Care Increases,” the article cites that “[o]nce MCOs took over, North Carolina stopped tracking what care patients are receiving. A health official said the database goes blank. That means the state does not know how many North Carolinians received services, what those services were, or what was denied. It can compare MCOs financials, but not their care.” (emphasis added).

Are you kidding me? The State of North Carolina, which is accountable to me and all taxpayers, cannot determine whether the Medicaid dollars being handed over to the MCOs are being used appropriately????

Yet 145 employees at CenterPoint receive salaries over the NC DHHS average salary: $52,000!  145 out of 200-ish, to be exact.  Some employees are receiving health insurance contributions of over $10,000/year…and NC cannot determine how many Medicaid recipients received medically necessary behavioral health care??

As a taxpayer, I am appalled. And I want accountability!!

Where is the fiduciary duty to taxpayers?

How Dare They! That Money Could Have Been Used on a Medicaid Recipient!

On one of my many trips to the Division of Medical Assistance (DMA), I noticed two interesting items: (1) The flower vases at DMA are filled with paperclips, which securely anchor artificial flowers; and (2) A flyer reads, “Thinking Medicaid fraud and abuse “don’t hurt anyone” is just wrong! Every dollar wasted or stolen is a dollar that could have been used on provide health care for someone who needs it and follows the rules.”

The first item, the flower vases filled with paperclips and artificial flowers, I chalked up to resourcefulness.  Someone at DMA wanted a little bit of decor…a bit of color…but, definitely did not want to spend our taxpayers’ money on a bouquet of flowers, which would just die and need to be replaced, or a piece of art, which could be construed as a poor use of taxpayers’ money.  Instead, this resourceful person used office supplies and a cheap silk flower to decorate DMA.

The second item, the flyer,I chalked up to good propaganda. I mean, everyone wants to discourage Medicaid fraud, right? Obviously, Medicaid fraud costs taxpayers lots of money.  Obviously, when a provider commits Medicaid fraud, we, as taxpayers, think….”How dare they! That fraudulent provider took money that could have been used on a Medicaid recipient!”

But…what about the Medicaid dollars being wasted on paying inept, third-party contractors erroneously conducting post-payment reviews and putting many Medicaid providers out-of-business by billing them for crazy, large, extrapolated amounts of money that they supposedly owe back to the government? Or erroneously conducting prepayment reviews? Or mis-managing behavioral health?  What about THOSE Medicaid dollars that could have gone to services for Medicaid recipients????

Think about it.  We are paying these third-party contractors with Medicaid dollars…Tax dollars.

We spend approximately 36 million, tax dollars a day on Medicaid.

When I first heard that statistic, I thought, “Wow! There are a lot of people on Medicaid.” Which is not completely incorrect.  There are a lot of people on Medicaid.  Approximately 1.5 million North Carolinians. But, the problem is that the $36 million a day does not go to treatment and/or medical services for Medicaid recipients. Much of that $36 million a day goes to third-party contractors who may or may not be conducting their jobs appropriately, efficiently, or, even, correctly.

Say I apply for and get a job at the Carolinas Center for Medical Excellence (CCME). My salary would be (I don’t know whether CCME makes any of its own money from private money, but), at least, partially, funded by federal and state taxes.  Which means, if I were hired by CCME as a Medicaid auditor, theoretically, my audit results would be or should be available to the public.  As one who receives taxpayer money, my findings should be available to the taxpayers…right?  So if I were doing a crappy job as a Medicaid auditor, I should be accountable (for my crappiness) to all taxpayers. Just like the resourceful DMA employee would have been accountable if he or she had bought an expensive piece of art instead of filling flower vases with paper clips and cheap silk flowers.

Going back to the “accountability to taxpayers” theme, shouldn’t the third-party contractors receiving federal and state Medicaid taxpayer money be accountable to any interested taxpayer?

And shouldn’t the taxpayers in NC be concerned if these third-party contractors are not doing their jobs appropriately, efficiently, or, even, correctly?

And the $36 million/day…shouldn’t we be concerned that this $36 million/day is not going to service Medicaid recipients, but, instead, much of the $36 million/day is going to the salaries for people who work at these third-party contractors and who are not conducting their jobs appropriately, efficiently, or, even correctly.

If I could boycott paying state and federal taxes until the taxes were appropriately used, I would.  But I believe I would end up in jail. Maybe we need a 2013 Boston Tea Party.

Remember the Boston Tea Party?

The Sons of Liberty, a political group in Boston during the American Revolution, was really mad about England taxing the colonists’ tea. They were ticked off about England’s Tea Act, which was passed in 1773. Colonists objected to the Tea Act because they believed that it violated their fundamental rights (remember, the violation could not have been considered a violation of constitutional rights, as the Constitution was not ratified until 1787)  The slogan for the Boston Tea Party was “No taxation without representation.”  Or, in other words, we can be taxed only by our own elected representatives and not by England because no colonist is a member of Parliament in England. So the colonists dumped a shipload of tea into the ocean to make a point.

Today, if a group of “radicalists” (because that is what they would be called nowadays) dumped a shipload of Medicaid funds into the ocean off the Boston harbor that group would, most likely, be jailed for stealing, destruction of property, trespassing, and probably contamination of the waters (if that were a criminal act), but definitely sued civilly for monetary damages.

Personally, I expect people receiving compensation from my tax dollars to (a) be accountable; (b) do their job appropriately; (c) do their job efficiently; and (d) do their job correctly.

How do we determine whether these third-party contractors are conducting their jobs (a) be accountable; (b) do their job appropriately; (c) do their job efficiently; and (d) do their job correctly?

If I hired a painter, how would I determine that painter were doing his or her job (a) appropriately; (b) efficiently; and (c) correctly? Answer: Supervision. If I told my painter I wanted my bathroom painted red and he or she painted the bathroom green, I would (a) fire him or her; and (b) sue for breach of contract (seriously….WHO would want to work for ME???).

Yet, the State of North Carolina hires companies that do not conduct the jobs for which the company is hired appropriately, efficiently, or correctly, and, yet, NC does not fire the company…does not sue the company.  It’s almost as if….if I hire someone else to do it, then I am not to blame.  It’s as if….I had an associate who completely missed an appeal deadline, and, instead of saying, “Hey, I am the partner…I am the one in charge….Blame me…,” instead I said, “Whoa there, client, it’s not my fault. Blame my associate.”

Someone has to be accountable!

Had my previously-mentioned, resourceful, DMA employee bought a bouquet of fresh-cut flowers for decoration for the DMA office every week with taxpayers’ money or an Edvard Erikson statue of “The Little Mermaid” for decoration, someone would have been accountable, most likely, my (then non-resourceful) DMA employee.

Yet, DMA hires third-party contractors that are not conducting their jobs appropriately, efficiently, or correctly, and DMA says, “Whoa there, taxpayer, it’s not my fault. Blame the third-party contractor.”

And I think, “How dare they! That inappropriate, inefficient, and inaccurate third-party contractor took money that could have been used on a Medicaid recipient!”

NC: One Head Chef in the Medicaid Kitchen is Enough!

Today the United States Court of Appeals for the 4th Circuit opined that “One head chef in the Medicaid kitchen is enough.” (This may be the first time I’ve laughed out loud at a federal court’s decision due to true humor).

The case caption is K.C., a minor child by and through his mother and next friend, Africa H., M.S., a minor child Plaintiff-Intervenor v. Pamela Shipman, in her official capacity as Area Director of Piedmont Behavioral Health Care Mental Health, (and the rest of the caption…) (We will call the case “K.C. v. PBH“).

Let me set the stage:

Plaintiffs-Appellees: a class of Medicaid beneficiaries who suffer from severe developmental disabilities

Defendants-Appellants: PBH, one of 10 MCOs in the State contracted with DMA to manage behavioral health services for Medicaid recipients in certain counties

Issue: Does 42 U.S.C. 1396a(a)(5), which requires Medicaid to be managed by a single state entity, prohibit PBH from appealing a district court’s entry of preliminary injunction when DMA did not join the appeal?

In the vernacular: Can PBH appeal any Medicaid issue without its “boss” or principal being a party?

Hmmmmm….maybe that was not as “in the vernacular” as I thought. Let me try again: Can the MCOs decide anything about Medicaid unilaterally without DMA?

I’m trying, people.

Anyway, the short answer is, “No.”

42 U.S.C. 1396a(a)(5) requires Medicaid to be managed by a single state entity. The 4th District calls this requirement the “single state agency requirement.”

Why is it SO important that a single state agency manage Medicaid that the federal government dictates the same? “To avoid a lack of accountability for the appropriate operation of the program.” Hillburn v. Maher, 795 F.2d 252, 261 (2nd Cir. 1986).

Lack of accountability???? Hmmmmm…How many of my blogs have been devoted to the lack of accountability of the MCOs?

The Hillburn Court stated that, “a single state entity may not diminish[] or alter[] its Medicaid responsibilities based on the action or inaction of other state offices or agencies.”; i.e., DMA cannot divorce itself from the duties of Medicaid merely by contracting out to a private company….or, i.e., DMA is on the hook for whatever happens in Medicaid regardless the player.

As to accountability of the MCOs, here are some of my favorite quotes from K.C. v. PBH:

  • “that agency cannot evade federal requirements by deferring to the actions of other entities.”
  • “PBH is forbidden to “change or disapprove any administrative decision” made by the NCDHHS pursuant to…”
  • “If important litigation decisions made by a single state agency were not “administrative decisions” protected from challenge by another agency, the resulting inefficiency and turmoil would be profound.”
  • “The result of PBH’s interpretation would be a constant state of confusion in the litigation process in which parties (and judges) must not only attempt to argue (or decide) the merits of each case, but where they must first identify which of multiple state entities is even speaking with the state’s final authority.”
  • The single state entity requirement “prohibits precisely what PBH aims to achieve in this appeal: to place itself in the driver’s seat and call the shots on how the state’s Medicaid is to be administered in the face of a clearly contradicted decision by the NCDHHS.”

Read the last two quotes again.  To me, these quotes sound as if PBH is NOT in the driver seat, that DMA is in the driver seat, and that DMA has complete control over the Medicaid system. Maybe I’m wrong. But that’s what it sounds like to me.

It’s been a long time, but I remember my early college philosophy classes, beginning with Logic 101: PBH is not in the driver seat.  PBH is an MCO.  Thus, no MCO is in the driver seat.

K.C. v. PBH also held, “there is no dispute that PBH is an agent of the NCDHHS due to its contract…”

No dispute? In every case I have right now, the MCO (whichever MCO it is) is arguing that it is an independent contractor, not an agent.  Apparently, there is no dispute…I am right 🙂 .

PBH cannot evade a preliminary injunction that continues to run against NCDHHS.  See pages 15-16 of K.C v. PBH (This is SO not the Bluebook style of quoting sources…Sorry).

Granted this decision came out today, but I am counting the seconds until Monday when OAH opens up, so we can implement the beauty of this decision.

One head chef in the Medicaid kitchen is enough!