Medicaid Administrator To Face Performance Review | Eastern North Carolina Now

    Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.

Study led by Auditor Wood will examine CCNC's costs and patient outcomes

    RALEIGH  -  As Department of Health and Human Services Secretary Aldona Wos places a top deputy temporarily in charge of the state's beleaguered Medicaid system, state Auditor Beth Wood has launched a cost and performance study of the nonprofit entity overseeing much of Medicaid, the joint federal/state health insurance program for the poor and disabled.

    Until Gov. Pat McCrory appoints a permanent Medicaid director, Deputy DHHS Secretary Robin Cummings will head the Division of Medical Assistance, in addition to his current duties. He now is acting state health director, along with supervising the state's public health, Medicaid, state hospitals, and mental health divisions, in addition to the office of rural health.

    In his new role, Cummings will lead a team exploring ways to transform a beleaguered Medicaid division that has drawn characterizations from the governor, Wos, and others as a "broken system." He is being tasked with delivering more efficient, effective operations, and ensuring greater precision in budgeting.

    "The historical challenges facing Medicaid have been well documented, and these challenges are now being compounded by unprecedented change in the health care industry," Cummings said in a prepared release. "To preserve Medicaid for future generations, we must improve and strengthen the operations."

    "I applaud the governor for considering all options to try to drive out costs, drive out waste, drive out abuse, and drive up the most important thing, and that's the quality of care to people on Medicaid who need it," said House Speaker Thom Tillis, R-Mecklenburg.

    Legislative leaders are in "active discussions" and meetings with McCrory on the Medicaid front, and "looking forward to his continued proposals so we can consider [potential reforms] in the short session," Tillis said.

    Soon after taking office last year, McCrory and Wos proposed market-based, managed care reforms involving private "comprehensive care entities" rather than allowing the nonprofit Community Care of North Carolina to be the sole Medicaid administrator.

    Wos conducted a statewide tour pushing the managed care concept and gathering feedback, while overseeing national solicitations for three or four firms to receive contracts as the comprehensive care entities. But the administration scrapped that idea, leaving CCNC in place.

    "CCNC has been a great program. It has been a key part of helping us to drive out some inefficiencies" in Medicaid delivery, Tillis said Monday at an event that unveiled a proposal from McCrory, Lt. Gov. Dan Forest, and legislative leaders increasing base pay for early-career public school teachers.

    However, Tillis said, "there are clearly some performance issues around Medicaid that we have to get our hands around." At the top of the list are constant cost overruns that have reached hundreds of millions of dollars annually.

    "One of the reasons why we've had to wait a year" to propose the pay raise "is the half-billion-dollar surprise [in Medicaid overruns] we got in June of last year, three weeks before the new fiscal year started," Tillis said.

    "We're waiting, working with the folks in the study committee, and we look forward to them reporting back," Tillis said.

Wood: Six-month study

    "That study is on its way," Auditor Beth Wood said. Work began about two weeks ago.

    "Our performance audits are normally allowed 90 days," Wood said. "Because of the massive amount of information that's involved, this one could be as much as six months."

    A private vendor with expertise in the complex and specialized medical analysis field was awarded a contract to collect 10 years' worth of data from DHHS and analyze it.

    "You've got to make sure there's integrity in the numbers, that the numbers you're using are comparing apples to apples. I do not have the expertise on my staff to pull together a study as huge and complicated as this one," Wood said.

    The General Assembly requested the study after Wood's office released a January 2013 audit harshly criticizing the Medicaid program for contract mismanagement, three straight years of $400 million cost overruns, key employees unprepared or unqualified for their jobs, and sloppy, sometimes improper, bookkeeping and budgeting.

    That audit was done before the budget-buster Tillis referenced.

    "Over the years, CCNC has said, 'We have been saving the state of North Carolina X million dollars,'" but using numbers from hand-picked contractors to stake the claims, Wood said. "And they're doing that based on actuarial numbers and estimates based on actuarial numbers."

    So the study "will look at the actual numbers of taking care of Medicaid patients, and compare those to the estimated numbers based on actuarial numbers," she said.

    "Obviously, being $400 million over budget, fiscally we probably haven't done a great job. Then CCNC says they're saving us all this money, but are they really?" Wood said.

    "The other side that you need to look at is how healthy are the participants. You've got to have both, the cost, plus how healthy are the people in each program. So it's time now ... to look at CCNC" in terms of healthy patient outcomes for the money being spent, she said.

    CCNC representatives did not respond to requests for comment. In the past, they have attacked critics and criticized reporters for questioning their oversight of Medicaid and savings claims.

    CCNC points to actuarial studies it has commissioned showing huge savings, along with an Innovations in American Government Award its health care model received in 2007 from Harvard University.

    "That reward they received was all about managing the care of participants, but it didn't say a dang thing about the cost of what they were doing, and how they were doing it," Wood said.

    "It's been 10 years. We shouldn't have to depend on actuarial assumptions and estimates any more," Wood said. "Let's go see what the real data says."

    Wood said she has no preference who administers the Medicaid program. But as a taxpayer and steward of taxpayer dollars, she said she wants to see the least expensive system with the highest patient success rates.

    "There's going to be audit objectives for me whether it's a managed care or it's the state of North Carolina doing it," Wood said. "Either way I'm going to be auditing their performance."