Blog Archives

NCTracks: The Defective Design Affects ALL NC Medicaid Providers!!

Today I tried to think about the worst things that have ever happened in history. I came up with the Holocaust and the Civil War.  The Civil War because more Americans died in that one war than all other wars in which America has been involved combined (until the Vietnam War).  Roughly 1,264,000 American soldiers have died all America’s wars over history, in aggregate (620,000 in the Civil War and 644,000 in all other conflicts).  It was only as recently as the Vietnam War that the amount of American deaths in foreign wars eclipsed the number who died in the Civil War.  So, maybe my second horrible thing is war, in general.

Regardless, why was I trying to think of the worst things in history?

Because NCTracks has got to be one of the worst things to happen in North Carolina history to Medicaid providers.  Obviously, I am not insinuating that NCTracks is comparable to the Holocaust or wars, in general. But to the Medicaid providers in NC, NCTracks may be as awful as the Holocaust or a war, in general (to those individual providers).

NCTracks’ defectiveness has adversely affected ALL PROVIDERS.  It has hit big providers, such as hospitals.  (WakeMed recently announced a loss of 2.5 million due to NCTracks), and small providers (I receive 2-5 phone calls daily from small providers who have not received either (a) payment; or (b) correct payment). 

A while ago I wrote the blog “Why There is Not a Lawsuit Against NCTracks” (paraphrasing my own title).  Well, as humans sometimes do, I am recanting my prior opinion as to one factor.  I wrote in my prior blog that if providers sued NCTracks, then NCTracks paid the providers, that the lawsuit would no longer have merit…as in, if NCTracks actually paid providers that providers would have no damages (because damages is a criterion for a lawsuit).

I am officially recanting that statement.

People sue manufacturers every day in products liability for defective design.

What are examples of a defective design?

  • A defective nail gun that shot through a wall, paralyzing a man in another room;
  • A lock-up of a poorly designed braking system that led to the death of a mother and her four children;
  • Machines at work — such as saws, presses, packaging machines, come-along chain hoists and other tools — with defective safety features that have blinded or caused hand or arm amputations to users;
  • Retractable dog leashes that led to finger amputations;

These examples are courtesy of a law firm in Boston.

My example?

A computer system implemented to provide payments to Medicaid providers, but upon implementation, actually causes Medicaid providers to not receive Medicaid reimbursements…  Obviously, the very reason NCTracks for which NCTracks was created is defeated.

It would be like me hiring a painter to paint my house.  But, instead of painting my house, the painter eggs it.

Issues I have heard of regarding NCTracks:

1.  NCTracks fails to correctly reimburse Medicare/Medicaid crossover claims;

2.  NCTracks fails to correctly reimburse office visits, assuming that the Medicaid recipients are giving a $5 co-pay, not a $3 co-pay;

3.  NCTracks fails to reimburse for immunizations and a well-child visit;

4.  NCTracks fails to reimburse for injections and an adult office visit;

5.  NCTracks incorrectly determines that a provider’s license has expired and does not reimburse;

6.  NCTracks fails to comprehend its own taxonomy codes;

7.  NCTracks fails to recognize secondary claims;

8.  NCTracks incorrectly suspends provider numbers;

9.  NCTracks incorrectly denies claims with multiple NSTs during the same inpatient encounter;

10.  NCTracks fails to reimburse for ambulance services.

Design defect?  Probably.  Holocaust? Probably not (although I am sure it feels like it to all individual providers).  War? Probably not (although I am sure it feels like it is to all individual providers).

Regardless, the damages are not just the non-payment of Medicaid reimbursements.  Now it may be damages for a design defect…

Now THAT may be a tort!!!

CSC, the Creator of NCTracks, Pays $97.5 Million in Settlement for “False and Misleading Information” Regarding the Company’s Performance as to a Computer Records Contract

You know the magazine Cosmopolitan?  Well, back in 1999, Cosmo decided to branch out from magazines and create a Cosmo yogurt.  Never heard of it?  That’s because Cosmo pulled the yogurt off the market within 18 months of entering the market.  Cosmo yogurt was a complete flop.  But, still, Cosmo yogurt was on the market for 18 months.

Remember “New Coke?” (I’m showing my age).  But back in the late 70s and early 80s, Coca-Cola launched the “New Coke.”  It was an utter flop and consumers demanded the original Coke to return.

If it takes 18 months for NCTracks to be “pulled from the market,” a great number of our Medicaid providers will either be (1) out of business; or (2) no longer accepting Medicaid.

It is indisputable (at least if you do not work for the Department of Health and Human Services (DHHS)) that NCTracks is severely OFF-TRACK.

Providers are going out of business because they are not receiving Medicaid reimbursements.  Or the reimbursements are below the standard reimbursement rates.  There are Medicare and Medicaid crossover problems.  Not to mention providers are extremely frustrated with the amount of time they need to devote to NCTracks issues.  See September 19, 2013, article by Rose Hoban.

Why has NCTracks been such a failure?

Obviously, I do not have the answer to that haunting question.  Believe me, I have heard it all.  I’ve heard that McCrory wants NCTracks to fail because NCTracks was past Gov. Perdue’s baby.  I’ve heard that McCrory wants NCTracks to fail because then he can privatize Medicaid.  I’ve heard that Computer Science Corporation (CSC), the company that writes the computer language for NCTracks is inept.  I’ve heard that CSC begged Wos not go “live,” but Wos pushed the go “live” date.  I’ve heard that the employees at CSC have no idea what they are doing.  I’ve even heard that all the Republican governors have conspired to fo everything in their power to derail the Affordable Care Act (ACA) and this is just one example.

Most likely, none of the above is completely correct…or a small bit of everything.  Regardless, the NCTracks system is hurting our providers that accept Medicaid.  It should not be a party issue.  It is a North Carolina issue.  And, just think how popular the administration would be if they came out tomorrow and trashed the whole NCTracks system….Now that would be something!!!

With all that said, I found an interesting tidbit the other day about CSC.

September 9, 2013, CSC settled a lawsuit with its shareholders for $97.5 million.  Is this germane to the NCTracks tomfoolery that we are all enduring?  Perhaps not…but…perhaps.

Shareholders of CSC (which, BTW, is a BILLION dollar company) brought a class action lawsuit against CSC over alleged false statements about accounting and the company’s performance on a multibillion-dollar contract.  Click on “class action lawsuit” to read the Complaint.

A Memorandum filed in support of the Complaint alleged that CSC “made false or misleading statements or omitted to disclose material facts” about internal controls over financial reporting and about CSC’s performance on a $5.4 billion electronic patient records contract with the U.K.’s National Health Service.

The plaintiffs alleged that the false and misleading statements regarding the controls over financial reporting and CSC’s performance on the $5.4 billion contract caused the stock to artificially inflate then plummet when the truth came out.

After reading the Complaint, this is what I gleaned that CSC allegedly did with respect to the electronic patient records contract (sound like what CSC has here in NC?):

Under the National Health Service (NHS) Contract, CSC agreed to build a computerized medical records system and develop the necessary software to create digitized medical records for all UK residents living within the regions covered by the contract.

This is directly from the Complaint…I find it very interesting…(the non-italicized words are mine):

The core component of the NHS Contract—the software system called Lorenzo , [NCTracks] intended to enable the digital medical records system—was to be delivered by 2012 [July 1, 2013]. The significance of the NHS Contract to CSC placed the project squarely in the spotlight of Wall Street analysts. Accordingly, virtually all conference calls between the Company and investors and virtually all public announcements during the Class Period addressed the progress and status of the NHS Contract. Throughout the Class Period, Defendants repeatedly asserted that CSC was “on track” and “making progress” and that the contract remained profitable to the Company. Likewise, CSC and the Individual Defendants continuously denied media reports critical of CSC’s performance of the contract. As analyst reports throughout the Class Period demonstrate, investors believed Defendants. However, Defendants’ representations were false because they had known, at least since May 2008, that CSC could not deliver the Lorenzo system [NCTracks] as promised. The Class Period begins on August 5, 2008, the date of Defendants’ first public misstatements following May 2008. Lead Plaintiff’s investigation has revealed that, as of May 2008, CSC and the Individual Defendants knew that the NHS Contract could not be fulfilled. In early 2008, CSC’s Board of Directors dispatched an internal team of experts to the UK to review progress on the NHS Contract. The team concluded that “from a technology and operational perspective,” CSC could not perform the NHS Contract [NCTracks]. The members of the team were in agreement that CSC simply could not deliver the software necessary to perform under the contract. As such, the contract was a “loser,” and, per Generally Accepted Accounting Principles (“GAAP”), CSC should have recognized a loss on the NHS Contract in 2008. CSC and the Individual Defendants concealed these facts from the public, and have never taken a loss on the contract. In the midst of public scrutiny, the UK Government commenced an investigation through a committee of Parliament with oversight over public spending. The committee reached similar conclusions: CSC could not deliver on the NHS Contract. Indeed, the Parliamentary inquiry revealed evidence that CSC had likely known it could not deliver since 2006.

If I am reading the allegations correctly, the plaintiffs asserted that CSC promised a computer program regarding electronic patient records that CSC knew it could not deliver.


As an aside, CSC’s reported revenue for fiscal year 2011 (ending April 1, 2011) was $16.04 billion, and net income attributable to CSC shareholders was $740 million. CSC common stock is listed and trades on the NYSE under the ticker symbol “CSC.”

 Companies deal with marketing/products failures every day.  Just look at Cosmo’s yogurt failure. Or Coca-Cola’s “New Coke” flop.

Cosmo pulled the yogurt off the market within 18 months.  Consumers demanded that Coca-Cola return to the original Coke recipe.

Could it be possible that CSC has 2 product failures???

The Lorenzo system???