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Knock, Knock. Who’s There? Burwell. Burwell Who?

As I am sure most of you have heard, April 10, 2014, Kathleen Sebelius, former Secretary to Health and Human Services (HHS), resigned. Some journalists wrote that her resignation came 6 months after “the disastrous rollout of Obamacare,” obviously alluding that she was fleeing from her position as Secretary. But is that why Sebelius left? And who is Sylvia Mathews Burwell?

It is no secret that when Healthcare.gov went live on October 1, 2013, Sebelius called the roll-out a “debacle.” But recent figures show enrollment in Obamacare exchanges has surpassed 7.5 million.

Sunday Sebelius stated that “Clearly, the estimate that it was ready to go Oct. 1 was just flat-out wrong.”

According to Politico Pro, “a White House official said Sebelius told Obama in March that she planned to resign. She felt that the Affordable Care Act trajectory was back on track, and believed “that once open enrollment ended it would be the right time to transition the Department to new leadership.””

It seems that Sebelius did not want to resign during the height of the debacle. She waited until things smoothed out a bit before walking away.

Obama has chosen Sylvia Mathews Burwell, his budget Director, to replace Sebelius.

Who is Burwell?

Burwell

Burwell served as deputy White House chief of staff during the Clinton administration. She also served at the Office of Management and Budget (OMB) twice, once as director. She has also worked at the Bill and Melinda Gates Foundation. (Speaking of Bill and Melinda Gates Foundation and people with obscene amounts of money, why don’t people ever set up charities to pay for Medicaid recipients to receive private insurance with the co-pays all covered? If I ever get an obscene amount of money I would set up a Medicaid Foundation. The Emanuel Medicaid Foundation. Look for that in the VERY FAR future, folks.).

Going back to Burwell…she received her bachelor’s degree in government from Harvard University. She also received her bachelor’s degree in philosophy, politics and economics from Oxford University. Seriously? Is that a quadruple major from 2 colleges?

Her grandparents were Greek immigrants, and she grew up in West Virginia.

There isn’t much more information on Burwell. She is relatively young (48) and holds a relatively small resume considering the enormous undertaking she is about to assume.

Obama nominated Burwell one day after Sebelius resigned. There is no indication of whether Burwell was Obama’s first choice. It took him one day to replace Sebelius, which is pretty amazing.  Remember, we still haven’t replaced former Medicaid Director, Carol Steckel. Sandy Terrell is still the “Acting Director.” Whew, it has got to be difficult to fill these intimidating positions.

I can only imagine how many people would NOT want to be Secretary of HHS. Talk about a big job! Talk about high stress!

Burwell has not been confirmed yet. Despite Burwell not being a common household name when Obama nominated her, it is without question that Burwell has now stepped into the limelight. If confirmed, Burwell will be one of the most powerful people in health care…and one of the most scrutinized.

Good luck, Burwell!! Make Burwell a household name…for good reasons. And when someone says, “Burwell who?”

Someone else will respond, “That is the Secretary for HHS.”

Wanted: North Carolina Medicaid Director: Transparent and Open!

With Carol Steckel’s abrupt resignation September 27, 2013, only 8 months after accepting the job as NC Medicaid Director, we North Carolinians were left without a Medicaid Director.  I posted a week or so ago that I can only imagine how difficult it would be to fill the position, considering the absolute mess the Department of Health and Human Services (DHHS) has created recently…the calamity of NCTracks…the negative PR…the high salaries of administration…Who would want to inherit this mess???

While I cannot imagine the person who would actually apply to be our Medicaid Director in the midst of such storms, I do have some advice for whomever attempts to carry the burden of being NC’s Medicaid Director. 

I don’t know why Ms. Steckel left.  I’ve heard numerous hypotheses.  I’ve heard that she didn’t get along with Sect. Wos.  I’ve heard that she left because the NC Medicaid system cannot be fixed.  I’ve heard the bad media press upset her.  I’ve heard she couldn’t handle the scrutiny of the public.

Regardless, anyone who is thinking of applying to be our Medicaid Director needs to understand that this is a public servant job.  This is not a private sector job.  Why is that important?  Because as an officer in the public arena, you are accountable to the taxpayers.  You cannot hide behind rhetoric or stop speaking to media.  As a public servant, you have duty to be transparent to taxpayers.  You will be scrutinized by the public…and this is allowed.

Recently, Secretary Wos responded with this comment when asked about transparency… “I think the word transparency can get pretty dangerous. … 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.”

While I understand Sect. Wos’ assertion that if all we do is talk then nothing gets done, in the public sector, transparency is, not only desired by taxpayers, but public servants owe a duty to be transparent.  Public servants are not spending their own money.  It’s my money and your money.  We deserve to know how our money is being spent and we deserve to have an opinion as to whether our money is being spent in an economically intelligent fashion.

For example, my blog about the managed care organizations paying the health insurance for its employees and the employees’ families was to point out that our tax dollars are paying for these employees’ families’ health insurance…tax dollars that are meant to provide health insurance to our most needy population.

Similarly, all the media hype about the high salaries of the two 24-year-old staffers, who were given salaries making $85,000 or more, the media are angered because, again, those salaries are paid by us.

Because the money that the Department of Health and Human Services (DHHS) spends is our money, not private funds, transparency is essential. 

A few weeks ago, when I flew to New Mexico, I had to go through airport security.  I had to take off my shoes (yuck! and walk on the airport floor), place my purse and laptop on the conveyor belt and step into the “All-Seeing Machine.”  You know, the machine that you have to place your feet a little apart and raise your hands above your head, while the machine whirls around your body.  I always feel slightly mortified every time I have to go through that machine.  I even suck in my breathe a little so my belly doesn’t poke out.  It is just a strange feeling to have a stranger look that closely at you and scrutinize your body.  You never know what the person looking at your image is thinking.  Being scrutinized is not fun.

Similarly, as NC Medicaid Director, and a public servant, you will be scrutinized.  Every word.  Every action…and non-action.

Remember Mary Poppins?  Remember the sweet, little song the two children sang about the criteria for their new nanny?

If you want this choice position
Have a cheery disposition
Rosy cheeks, no warts!
Play games, all sort

You must be kind, you must be witty
Very sweet and fairly pretty
Take us on outings, give us treats
Sing songs, bring sweets

Never be cross or cruel
Never give us castor oil or gruel
Love us as a son and daughter
And never smell of barley water…

Well it applies to the Medicaid Director position too.  Here is the “Perfect NC Medicaid Director Song:”

If you want this choice position
Have an open disposition
Know Medicaid laws and rules
Don’t treat media as fools
 
You must be strong, you must be smart
Very tenacious, open heart
Take on naysayers, show guts
Move our Agency out of ruts
 
Be transparent, don’t circumvent
Never say to media, “No comment.” 
Love our citizens; our state
And always, always update…

I found the job posting for our Medicaid Director on the National Association of Medicaid Directors’ (NAMD) website.

Here it is:

DIRECTOR OF MEDICAL ASSISTANCE

The North Carolina Department of Health and Human Services (DHHS), in collaboration with our partners, protects the health and safety of all North Carolinians and provides essential human services.

Within DHHS, the Division of Medical Assistance (DMA) provides access to high quality, medically necessary health care for eligible North Carolina residents through cost-effective purchasing of health care services and products. The Department of Health and Human Services and DMA are devoted to quality customer service.

The Director of Medicaid directs the administration of the state’s Medicaid and NC Health Choice Programs. The Medicaid program serves more that 1.7 million North Carolinians and provides services to children, the elderly, the blind, the disabled and those eligible to receive federally funded assisted income maintenance payments. The North Carolina Health Choice (NCHC) Health Insurance Program for Children is a comprehensive health coverage program for low-income children. The goal of NCHC is to reduce the number of uninsured children in the State. The program focus is on families who make too much income to qualify for Medicaid but not enough to afford private or employer-sponsored health insurance.

DMA has approximately 400 employees and a budget impact of 14 billion dollars which includes 3.8 billion in state appropriations. DMA partners with over 78,000 physician providers throughout the state to provide essential services to recipients. The Director is responsible for multi-million dollar contracts and performs an array of fiscal agent and administrative services which include cost reimbursement and integrated payment management reporting to local management entities (area mental health programs). The position manages the state waiver program and demonstration projects. The Director is the primary interface with the Federal Centers for Medicare and Medicaid Services (CMS) and for the Committee Management Office. (CMO)

KNOWLEDGE, SKILLS AND ABILITIES:

Prior leadership and policy role in large complex organization administering the Medicaid Program or within a Medicaid Reimbursement or Health Insurance Agency
Demonstrated knowledge of the federal and state funding process for Medicaid and Medicare
Proven ability to build consensus among diverse stake holders which includes constituents, providers, advocacy groups, the media, the public and the legislature
Demonstrated ability to provide leadership during a time of change or reorganization

MINIMUM EDUCATION AND EXPERIENCE REQUIREMENTS:

A Masters Degree in Business, Public Health, Health Administration, Social or Clinical Science or a related field and six years of broad management experience in Health Administration or in Healthcare financial management of which at least three years must be at the Director or Assistant Director level of a statewide or federal division in Health Administration or Financial Management.

To be considered for this opportunity please submit a detailed resume to alma.troutman@dhhs.nc.gov

To learn more about the North Carolina Department of Health and Human Services, please visit our web site at: www.ncdhhs.gov

All applications will remain confidential.
Equal Opportunity Employer

Nowhere in the advertisement for the NC Medicaid Director does it say what the Medicaid Director ACTUALLY has to do in real life.

Undergo scrutiny.  Talk to the public.  Maintain transparency. Be a public figure in a time of crisis.

It’s our money.  So talk to us.

McCrory Administration Accused of Suppressing Insight into Medicaid

Whew…more bad press for the McCrory administration, Secretary Aldona Wos, Carol Steckel and the Department of Health and Human Services (DHHS). 

Ms. Rose Hoban, a journalist for North Carolina Health News, a website that I, personally, visit often, accuses the McCrory administration of suppressing information about Medicaid that, in her opinion, indicates that Medicaid was not as broken as the January 2013 Performance Audit conducted by Beth Wood, our State Auditor demonstrated.  According to Ms. Hoban, the McCrory administration suppressed the Medicaid information in order to push forward the McCrory administration’s intent to privatize Medicaid.

That is quite an accusation with immeasurable consequences if correct?  Right?

Did the McCrory administration suppress Medicaid information with the intent to push for privatization? I have no idea. 

Ms. Hoban suggests that Ms. Steckel’s revisions to the former administration’s responses to the Beth Wood audit on DHHS indicates the McCrory administration’s intentional suppression for a political reason.  I am not so sure that Steckel’s revisions to the former administration’s responses proves prima facie (on its face and without any other evidence) that the McCrory administration was “suppressing insight into Medicaid,” in order to privatize Medicaid… But, who knows???? 

According to Ms. Hoban’s article, another related article will be published in the future, so maybe she has more evidence to support the accusation. We shall see….

Here is Ms. Hoban’s article:

McCrory Administration Officials Suppressed Insight Into Medicaid

For months, members of the McCrory administration have maintained that the state’s Medicaid program is “broken.” But in the first of a two-part investigation, North Carolina Health News shows McCrory officials sat on information that would have depicted the state’s much-lauded Medicaid program in a better light.

By Rose Hoban

Soon after taking control in Raleigh in early 2013, people hired by Gov. Pat McCrory to run the Department of Health and Human Services made strategic edits to the departmental response to State Auditor Beth Wood’s audit of the North Carolina Medicaid program.

Documents obtained by North Carolina Health News through a public records request show that in January, incoming Sec. Aldona Wos and Medicaid head Carol Steckel eliminated detailed explanations of alleged high administrative costs, management problems and budget overruns in past years.

The resulting document accepts the criticism in Wood’s assessment wholesale and paints the health care program that covers 1.6 million North Carolinians as “broken.”

The criticisms contained in the audit have yielded talking points used by Wos, Steckel and McCrory for the past eight months as justification for turning down a federal expansion of the program under the Affordable Care Act and proposing to privatize the program.

State Auditor Beth Wood describes the results of her audit of the state Medicaid program, while Governor Pat McCrory listens.

State Auditor Beth Wood describes the results of her audit of the state Medicaid program, while Gov. Pat McCrory listens.

The original response to the audit created in December 2012 by outgoing officials from Gov. Bev Perdue’s administration was revised in successive editions of the document throughout January, with a decisive, near-final edit by Steckel.

In a document that displays “track changes” that include Steckel’s electronic signature, whole paragraphs were deleted, with evidence that, for example, North Carolina’s administrative costs are lower than most states rather than 30 percent higher, as maintained by McCrory administration officials.

Incoming administration officials also deleted whole sections explaining that budget overruns were in large part a function of under-budgeting by the General Assembly.

And in her first week in her new office, Steckel struck through paragraphs explaining that Community Care of North Carolina had been studied by two national groups that found cost savings. Instead, she inserted language casting doubt on the efficacy of CCNC and suggesting further study of the statewide program that’s been lauded nationally and that is being replicated in several states.

‘Administrative costs are 30 percent higher’

During a press conference to present the audit in January, Wood said her analysts had determined that North Carolina was spending significantly more on administrative costs than states with Medicaid programs of comparable size (see table, below).

“The administrative spending for the state’s medicaid program is 38 percent higher than the average of nine states with similarly sized Medicaid programs,” Wood maintained. “While those states on average have administrative costs of 4.5 percent, the state of North Carolina spent over 6 percent of its total budget on administrative cost. In real dollars that means that the state is spending $180 million more than the average of our peer states.”

For her analysis, Wood used information from the Centers for Medicare and Medicaid Services.

In a February appearance before the Joint Legislative Oversight Committee on Health and Human Services, Steckel cast some doubt on those numbers, telling the committee that in many states administrative costs are hidden inside the contracts with managed care companies that run Medicaid programs.

Administrative cost comparison calculated by State Auditor's staff

Administrative cost comparison calculated by state auditor staff (screenshot from final audit)

“Actually, the administrative cost functions are in the managed care entities. And if you look at what is termed the ‘medical-loss ratio,’ which is what the managed care companies are allowed to use for administration, if you look at that for Arizona, their administrative costs would actually be 13.74 percent,” Steckel told the committee, explaining that the managed care company, rather than the state, was spending the administrative dollars.

Steckel may have gotten the Arizona figure from an analysis prepared by outgoing DHHS officials in December 2012. In the original departmental response to the state auditor’s report, which called Wood’s comparison “incomplete and misleading,” DHHS officials used actuarial data from national firm Milliman and from an Academy of Health report to calculate actual administrative overhead in the states Wood used in her comparison, including overhead from state expenditures and from managed care companies.

That table shows Arizona’s administrative expenditures at 13.74 percent.

When figures from all the states are tallied up and compared, North Carolina is among the lowest for administrative expenditures (see table and document, below).

Wos wrote in the final departmental response that DHHS agreed with Wood’s findings and recommendations on controlling administrative expenses.

During the press conference to announce the audit, Wos said, “Cost overruns will not be tolerated and will not be acceptable. There’s a budget for a reason, and we must adhere to this budget.”

Administrative cost comparison compiled by DHHS

Administrative cost comparison compiled by DHHS using data from July 2012 study by Milliman & Academy of Health report. Source: Issue Sheet 3, “Admin Costs w Responses,” dated Dec 18, 2012 (screenshot from document shown below).

Since release of the audit, Wos and McCrory have used Medicaid’s supposedly high administrative costs as talking points for problems in Medicaid; most recently, McCrory cited that figure in a September interview with Tom Campbell on NC SPIN.

“We had a more than $500-million overrun based on Gov Perdue’s projections on Medicaid, and our costs are 30 percent higher than other states in Medicaid administration,” McCrory told Campbell, “just basic operational issues.”

“The state overspent its Medicaid budget by $1.4 billion under the previous administration, and this administration thought that was indefensible,” wrote DHHS spokesman Ricky Diaz in response to a request for comment on this story.

Budget issues

Another talking point used by Wos and McCrory is the Medicaid budget overruns that have plagued the program over the past three fiscal years. Both have been quoted numerous times stating that Medicaid has been over budget by a total of $1.4 billion during that time period.

In the audit, Wood tallies the state budget overrun for the three years at $375 million, which includes federal matching funds to reach the $1.4 billion total. And Wood states that administrative overruns were the result of an “apparent lack of oversight.”

Initially, DHHS officials strongly disagreed with this assessment, writing that any exceeded budget amounts were due to “other factors such as consumption and price, not lack of oversight.… Since Medicaid is an entitlement program, the Division has little control over consumption.”

But this defense was edited out by Steckel, as evidenced in the tracked-changes version of the audit response dated Jan. 22, 2013. Steckel noted that telling Wood Medicaid is an entitlement would be “speaking out of school to the auditor.”

Steckel also deleted most of the language that provided any defense or explanation of departmental actions. In her edits, Steckel added that the department would be implementing a system where “we track contract requirements and expenditures on a weekly basis,” something DHHS officials had been doing since the previous summer, as noted in earlier versions of the document prepared by outgoing Perdue officials.

Perdue’s team had also included explanations of how the Office of State Budget and Management had been consulted on – and approved of  –  any overruns, explaining: “The Department cannot unilaterally expend funds beyond budgeted amounts.”

Later in the document, former officials argued that the department had repeatedly provided legislators, OSBM and the legislative Fiscal Research Division “with information regarding the inability to achieve savings included in the budget for [fiscal year] 2012-2013 as early as April, 2011.”

That was around the time former DHHS Sec. Lanier Cansler began sending letters to legislative leaders and to OSBM warning that budget targets were too low, essentially forcing DHHS to overspend its budget. Cansler sent letters in May and June, and again on Oct 27, 2011, when he wrote that “aggressive budget cuts mandated by the General Assembly’s budget are unreasonable and unattainable.”

In a letter to Speaker of the House Thom Tillis and Senate President Pro Tempore Phil Berger dated June 2, 2011, then-governor Perdue wrote that she believed the amounts budgeted for Medicaid were too low.

Perdue pointed out that since 2008, the state had grown by 400,000 people and the state was still struggling to emerge from the economic downturn that meant many workers lost insurance, with some of those workers and many of their children swelling Medicaid’s rolls.

“[Y]our budget relies on over $750 million in reductions to Medicaid over the course of the biennium,” Perdue wrote. “When the loss of Medicaid matching funds are accounted for, your cut is actually $2 billion in real money taken out of the North Carolina economy….

“It is anticipated that over $200 million of these reductions will not be achievable due to technical mistakes and overestimating of savings.”

But any references to departmental attempts to warn others outside DHHS of issues were edited out by Steckel. She also removed references to the fact that federal rules prohibit states from changing their Medicaid programs unilaterally; any rule changes require federal approval, which can take months, and those delays mean a state ends up spending at a higher rate than desired in the meantime.

Later, in sections of the audit that fault the Division of Medical Assistance for poor forecasting of expenditures, Steckel edited out the following: “The Department disagrees that actions were not taken to reduce expenditures to stay within budget. Despite the actions taken by the Department, estimates were exceeded largely due to factors outside the Department’s control. Medicaid is an entitlement program and changes require approval outside of the Division and the Department.”

Again, these explanations of budgeting procedure and warnings by DHHS to other branches of government were edited out by Steckel, adding to an overall impression of a rogue department that was spending out of control.

“North Carolina Medicaid is not broken,” argued John Oberlander, professor of social medicine at the UNC School of Medicine. “This is a contrived crisis.”

“They had a solution and they were looking for a problem. And they were looking to portray Medicaid in as negative a light as possible in order to justify what they wanted to do, which is privatize.”

But DHHS spokesman Diaz said administration officials “stand by our final responses to the audit.”

“We continue to update and improve the Department’s forecasting practices as we reform our state’s broken Medicaid system,” he said.

Part 2 (tomorrow) – Casting doubt on a national model

Steckel track changes edit, Jan 22, 2013