Auditors scrutinize NC Medicaid contract
Posted December 13, 2011
RALEIGH, N.C. — State auditors are questioning how a contract to overhaul and operate the claims processing system for North Carolina's Medicaid program became bogged down with cost overruns and a nearly two-year delay.
State Auditor Beth Wood's office is examining the state's Medicaid Management Information System office and a $265 million contract awarded to Computer Sciences Corp. The project was supposed to operational this year. A draft of Wood's report says the project now will be 22 months late and exceed initial cost estimates by $320 million.
The audit draft report says the Medicaid office did not appear to use controls to be reasonably assured the project would be on time and on budget.
State officials overseeing the project spoke Tuesday to a legislative committee.
The North Carolina Department of Health and Human Services released a statement Tuesday, calling the development "old news."
"The fact of the matter is the Republican Controlled General Assembly has known about delays in the system for months. The General Assembly has been aware that the additional costs are a result of policy changes at the Federal and State level requiring changes in the system, as well as an acknowledgment from the contractor that mistakes were made, and DHHS has required the contractor to pay the penalties for those mistakes."