Audit: DHHS ill-equipped to handle troubles with Medicaid billing system

The NCTracks system has been under fire since it was launched in July. Health care providers have complained about difficulties submitting claims and tardy payments that some say have endangered the future of their businesses. Lawmakers have twice called DHHS Secretary Aldona Wos and other department officials to testify in recent months about what is being done to fix the problems.

State auditors documented more than 3,200 defects in the $484 million system and said the department "has an inadequate framework for the timely resolution" of the defects. Also, the state has no comprehensive plan to address the various issues providers and others have brought up.

The audit calls for establishing guidelines and a methodology for tracking the timely resolution of defects – 637 remain unresolved, almost three-fourths of which are labeled as "high" importance – and says DHHS officials should monitor vendor Computer Sciences Corp.'s performance against those metrics.

"Auditors found that NCTracks defects are being resolved, however, lack of formal goals to resolve defects in a timely manner indicates that the department and CSC may not be managing all NCTracks defects efficiently," the audit states.

For example, auditors found that DHHS managers gave conflicting answers when asked what was meant by the department establishing a "target response time frame" to handle defects within a certain time.

Fixing the defects has pushed all other upgrades to the back burner, auditors said, so 12 of 14 changes mandated by lawmakers or government regulations haven't been implemented. DHHS doesn't have a schedule for putting these upgrades in place or a cost estimate for making them, the audit notes.

DHHS should have an update to lawmakers by March 1, Wos said in her response to the audit.

She also said the rate of defects in NCTracks is much lower than the average software program, given the size and complexity of the system.

"Although NCTracks has fewer defects per function point than industry average for a comparable software system, we understand that some providers have not received payment for their claims for services. We have and will continue to work diligently to ensure that every provider is paid timely and accurately for covered services rendered," she wrote.

Wos disputed that DHHS has no plan for tracking problems with NCTracks and their resolution. "The department has been managing NCTracks defects efficiently since go-live. Formal target response times are in place and defect metrics have been tracked," she wrote.

Auditors said, however, that her response is "misleading," noting that DHHS has no documentation of how it has handled defects.

Bob Seligson, executive vice president and chief executive officer of the North Carolina Medical Society, said the audit "confirms our worst fears about NCTracks."

"This flawed system has been hurting patients and hurting doctors throughout the state since it went live on July 1," Seligson said in a statement. "We heard about the problems from our members then, and we continue to hear about them to this day. We hope definitive action will be taken now to fix NCTracks once and for all."

Wos didn't respond to the final finding in the audit, which recommends that lawmakers consider legislation addressing state employees who go to work for companies with state contracts that the employees helped manage.

Paul Guthery left DHHS in August and went to work for CSC. Guthery was considered a main point of contact with CSC while working for DHHS, as he was responsible for certifying NCTracks' testing process.

"The state government ‘revolving door’ creates a perception of bias or conflict of interest," the audit states.