DHHS faces string of problems, PR missteps
Posted January 17, 2014
Updated March 26, 2014
Raleigh, N.C. — Since Gov. Pat McCrory has taken office, no agency he directly controls has been in the news more than the Department of Health and Human Services.
State taxpayers spend nearly $5 billion a year on the agency, which handles another $12 billion in federal funding. The bulk of those federal funds go toward Medicaid, the health insurance program for the poor and disabled, although federal tax dollars also support food stamps, heating assistance and other programs for the state's most vulnerable citizens.
DHHS Secretary Aldona Wos has faced calls to resign over her handling of the agency. McCrory has stood by his appointee, saying anyone would struggle to handle the sprawling agency and its many foibles inherited from prior administrations. Among the stories that have arisen over DHHS since the governor took office in January of 2013 are the following:
January 2013: Personal Care Services cuts
Group home funding slow to emerge Before he even took office, McCrory was faced with the prospect that vulnerable residents of group homes would lose their places to live because of changes in who was eligible for help with eating, bathing and other daily tasks. Two different budgetary and bureaucratic snafus endangered funding for those in long-term care homes for Alzheimer's patients as well as group homes for those with other mental health issues. The problems came to a head in January and February, with lawmakers passing what they thought were legislative fixes to keep residents in treatment facilities. However, group home residents faced crises again in May and then again in September. Although money set aside to patch the problem appears to have made its way to providers now, lawmakers have still not settled on a long-term fix for the issue.
February 2013: New state pre-K director dislikes pre-K program
McCrory: 'Mistakes were made' on Lightfoot Barely a month into his administration, McCrory faced criticism for Wos' hiring of Dianna Lightfoot as the state's director of Child Development and Early Education. Before taking office, Lightfoot had written extensively about her opposition to the kind of public pre-K programs she was set to administer. Lightfoot resigned amid the furor over her appointment, but questions about the move dogged McCrory for weeks.
March 2013: Personal data breach - round 1
Medicaid contractor loses provider's personal information The contractor building the state's troubled Medicaid billing system lost a thumb drive with the personal information of thousands of medical providers. Officials with the DHHS and Computer Sciences Corp. announced the data breach on March 8. According to DHHS, 1,182 North Carolina medical providers were affected, but information regarding more than 50,000 providers nationwide was compromised. "The only providers involved are those prohibited by the federal government from participating in the Medicare, Medicaid and all other federal health care programs," the company said in a statement.
April-June 2013: Legislature ignores McCrory's plans to reform Medicaid
Lawmakers skeptical on Medicaid reform McCrory announced a Medicaid reform plan that would, in essence, push the state toward a managed care system in which insurance companies would assume the risk for rising Medicaid costs and so have incentives to limit the amount of treatment any one patient received. Lawmakers were skeptical of the plan from the start and ultimately passed a budget provision to limit McCrory's ability to pursue reform without legislative oversight.
May: Wos says the decision not to expand Medicaid was up to Insurance Commissioner Wayne Goodwin
In a May appearance in Reidsville, Wos told an audience of health providers and others that it was Insurance Commissioner Wayne Goodwin's decision not to expand the state's Medicaid program. “In reference to your roundabout way of commenting about Medicaid expansion … in North Carolina, based on our constitution, the issue of Medicaid expansion or not, actually, was the commissioner of insurance’s,” Wos said, according to a report from N.C. Health News. As other outlets who picked up the story noted, that claim is false. The Medicaid expansion decision was initially in the governor's hands, and then the General Assembly passed a law prohibiting the governor from exercising that authority. Goodwin has since called for an apology, but none has been forthcoming.
June 2013: Big raise for budget director
McCrory was forced to defend giving the DHHS budget director a $30,000 raiseshortly after telling state agencies to reduce their spending. DHHS budget director Jim Slate's annual salary rose to $144,000.
July 2013: State health director abruptly resigns
Little notice given in high-level departures under McCrory In late July, Laura Gerald resigned as the state's health director after 18 months on the job. Gerald, a long-time state employee, cited differences with the McCrory administration in her resignation letter. "Although I have demonstrated the ability to produce accomplishments that require work and collaboration with diverse groups and across political aisles, I acknowledge that I have significant differences and disagreements with many of the policy and administrative directions that I see unfolding in North Carolina and in the Department of Health and Human Services," she wrote. "These differences are making it increasingly impossible to continue to be effective in my current role."
July 2013: New NCTracks Medicaid system fails to pay providers
Providers complain about new Medicaid claims system Soon after the state turned it on, the NCTracks computer system designed to pay doctors and other health care providers in the Medicaid system encountered problems. Hundreds of providers reported problems getting paid for basic services and said that the program was the problem. DHHS officials blamed the bulk of the problems on lack of training, but an earlier report from the State Auditor's Office warned that the system was not ready to handle its workload. Providers were forced to seek emergency payments from the state until billing issues could be resolved.
August 2013: Young staffers get big salaries
Hefty raises at DHHS raise question of qualifications As McCrory told state agencies to freeze salaries of their workers to help cover a growing Medicaid shortfall, the department that managed Medicaid gave hefty pay bumps to former McCrory campaign aides now working for the agency. Among the most notable salaries in that group were Ricky Diaz, a 24-year-old public relations officer at DHHS who got a $23,000 raise in April and made $85,000 a year until he resigned in January 2014. Matthew McKillip, also 24 at the time of his hire, made $87,500 a year as a senior policy planner at DHHS. Another former McCrory campaign staffer, McKillip had no educational background or experience in health policy on his resume, although he did work briefly at a conservative think tank.
Feb.-Aug. 2013: Problems delay food stamps for needy families
Food stamps glitch sends more hungry to soup kitchen New software delays food stamps for some Throughout the year, families who are supposed to get food stamps benefits reported delays and other problems with the system. DHHS officials blamed the problems on the roll out of the new NC FAST computer system, which was supposed to make processing requests for public assistance faster and more efficient. Complaints about the system continued throughout the year, despite assurances that the state's backlog was shrinking. Food bank and soup kitchen directors said they noticed an uptick in pressure on their nonprofit agencies due to glitches with the system.
September 2013: Politically connected executives land big contracts
Statement by DHHS regarding contract employee State health agency gave big contract to Wos acquaintance Wos faced questions late in the summer about a contract she gave to a staffer who worked for her husband's company. State records show the health agency paid Joe Hauck more than $228,000 for work done from late January through August to advise the secretary on "strategic planning, reorganization and policy issues." Hauck is on leave as the vice president of sales and marketing for New Breed Logistics, a High Point company for which Wos' husband, Louis DeJoy, is the chief executive officer. The agency also had to answer questions about hefty contracts given to other politically connected figures, such as former state Auditor Les Merritt.
September 2013: Head of the state's Oral Health Services dismissed
Ex-DHHS staffer calls advisers' salaries shocking Rebecca King, a longtime chief of the state's Oral Health Services division, was fired. According to a dismissal letter, DHHS officials accused here of exercising poor judgment. However, King said she was fired after refusing to sanction workers who took vacation time to lobby lawmakers to reverse budget cuts.
September 2013: Merritt resigns ethics post over potential conflicts with DHHS contract
Merritt roles on ethics commission, work for DHHS conflict Merritt stepped down from his role as an appointed member of the state Ethics Commission after questions were raised about whether his service as a DHHS contractor created a conflict with his duties as a government watchdog. Merritt took his seat as an Ethics Commission member on Jan. 1, 2013. He signed a contract five months later to serve as as chief financial officer for the state Division of Mental Health, Developmental Disabilities and Substance Abuse Services. That contract sets his pay at $312,000 through May 12, 2014, and includes two one-year renewal options.
September 2013: Chief of staff paid $37,000 'severance'
DHHS paid chief of staff $37,000 'severance' after month of work DHHS paid Thomas L. Adams $37,227.25 as "severance" after he served just one month as chief of staff at the department. Adams' severance payment stood out because he occupied an exempt position, meaning he could be hired and fired at will with little notice and no need for the state to give cause and no appeal rights. The settlement was in addition to $14,000 in salary he earned over a short tenure.
September 2013: Medicaid's chief doctor moves to another role
Chief Medicaid doctor leaving for Butner post The top doctor for the state's Medicaid program stepped down for another job within DHHS. Dr. Randall Best had been medical director for the Division of Medical Assistance since October 2010. He was hired by then-DHHS Secretary Lanier Cansler under Gov. Bev Perdue. Best took a lower-profile job as the director of physician services at the 500-bed Murdoch Developmental Center in Butner. DHHS officials never explained the move.
September 2013: McCrory donor hired to advise DHHS director
McCrory donor, former ECU lecturer to advise DHHS leader Margaret "Mardy" Peal, a donor to McCrory and a former East Carolina University lecturer, joined Wos' senior advising staff, with a $95,000 salary. Before coming to DHHS, Peal was on the board of the anti-abortion Carolina Pregnancy Center, which provides "abortion alternatives, post-abortion support and abstinence education with the hope of transforming lives through Jesus Christ," according to its Facebook page. The hire came as the agency prepares to rewrite state rules governing access to abortion and grapples with massive Medicaid shortfalls.
September 2013: Medicaid director resigns
North Carolina's Medicaid director leaving post Carol Steckel, who was hired with great fanfare to repair and reform the state's Medicaid system, left her post to take a job as an executive with a Florida-based managed care company. McCrory hired Steckel, who had the same job in Louisiana, and before that Alabama, to run what he has consistently described as a "broken" Medicaid program. In addition to leaving as the chronically troubled Medicaid system is still fighting through a particularly troubled patch, Steckel's departure came as McCrory talked up a sweeping reform of the joint federal-state health insurance program for the poor and disabled.
October 2013: N.C. only state to stop WIC benefits during federal shutdown
Questions remain on WIC closure Dysfunction in Washington, D.C., came to North Carolina as the partial federal government shutdown stemmed the flow of tax dollars to North Carolina. The Women, Infants and Children nutrition program, or WIC, was one of the hardest hit by the shutdown. North Carolina announced it would stop processing applications due to the shutdown, but the federal government raised questions about that response, saying that the state should have had a reserve to allow it to carry on work through the shutdown period. Question intensified because WIC programs in other states continued operating.
October 2013: Wos and other DHHS officials face legislative questions about NCTracks
DHHS faces skeptical questions on Medicaid payment system The legislature's Health and Human Services Oversight Committee peppered Wos and other key staffers with questions about the Medicaid billing system, NCTracks. The hearing began with lawmakers hearing from Medicaid providers who said the system was killing their businesses and not delivering promised payments. "Do we have have a $800 million pig here we're trying to put lipstick on?" Sen. Tommy Tucker, R-Union, asked the committee.
October 2013: Report raises questions about McCrory's administration's rationale for Medicaid reform
The same day Wos and other DHHS officials faced skeptical questions from lawmakers, the N.C. Health News website published a report suggesting that the McCrory administration suppressed evidence that the state's current Medicaid program was working well. The changes in a response to a state audit report helped McCrory build the foundation for the case that a switch to a managed care system was needed.
October 2013: Auditor raises questions about Wos' answers to the DHHS oversight committee
Auditor raises questions about DHHS answers on Medicaid IT Two days after Wos appeared before the legislative oversight committee, State Auditor Beth Wood raised questions about the answers DHHS gave to lawmakers. Wos told committee members they had no warning that the NCTracks Medicaid billing system would not work as planned. Wood said she communicated specific concerns to DHHS in the months before the launch. Wood also said she had been told the state could delay the launch if need be.
November 2013: Personal data breach – round 2
Patient info removed from public NC database McCrory administration officials announce that personal information related to some patients had been posted online for years. In 2009, Perdue's administration created NCOpenBook to better disclose how government money was being spent on contracts. However, the system had swept up information related to payments made from state hospital accounts. The information listed included the person's name, address, date of payment, dollar amount paid and the name of the facility that made the payment.
November 2013: IT Manager who was 'point person' for NCTracks moves to company building the system
Former DHHS staffer takes job with Medicaid contractor An IT manager who the state auditor described as a "point person" for the troubled NCTracks Medicaid billing system left the state to work for Computer Sciences Corp., the company responsible for building the system. Watchdogs said the move raises questions about whether Paul Guthery's work overseeing the system was influenced by the potential for him to land a job at the company. "If I’m a skeptical, cynical citizen, the question is, did he (Guthery) give them a pass and then they gave him a job?" said Jane Pinsky, director of the North Carolina Coalition for Lobbying and Government Reform.
November 2013: DHHS rolls out mental health, substance abuse crisis plan
DHHS rolls out mental health, substance abuse crisis plan The state rolled out a new crisis intervention effort to keep people with mental health or substance abuse problems out of jails and emergency rooms. The Crisis Solutions Initiative involves health care, law enforcement and community groups identifying help for people with mental health and substance abuse issues so they can receive the most effective care. However, there was no new funding behind the program.
December 2013: Twitter Town Hall nets skeptical feedback
DHHS holds a Twitter Town Hall, but gets blasted by critics over the social media platform.
December 2013: Records show DHHS downplayed food stamps issues
Records: DHHS downplayed food stamp issues For months, DHHS officials told lawmakers that NC FAST, the computer system to process applications for food stamps and other public benefits, had been working relatively well. However, a WRAL News review of thousands of pages of emails and other public records shows that, for more than a month starting July 15, counties across the state struggled with a buggy, sluggish system that frequently froze up and prevented workers from keying in cases. By the time the NC FAST team identified the problem as a simple browser compatibility issue in late August, almost 70,000 food stamps customers statewide – many of them families with children – were waiting on overdue benefits, according to statistics from the U.S. Department of Agriculture.
January 2014: Thousands of Medicaid cards sent to the wrong families, violating federal health privacy laws
DHHS: Medicaid card error was privacy breach In early January, the department sent almost 49,000 Medicaid cards to the wrong families, causing confusion and worries about fraud. Although the cards simply went to the wrong Medicaid recipient and patients were still able to get care, the incident was violation of federal HIPAA laws meant to protect patient privacy. In initially reporting the incident, Diaz initially told reporters that the agency found out the problem on Jan. 2, but records show top agency leaders notified counties of the problem on New Year's Eve. Agency leaders eventually revealed that the problems was caused by a programming error.
At the same time as the Medicaid card error, the public also learned of another problem related to the state's Medicaid program. More than 36,700 Medicaid recipients in Orange, Johnston, Chatham and Carteret counties received debit cards for food stamps in the mail, whether they were on the rolls for food stamps or not. DHHS spokeswoman Julie Henry said the cards had no value, and no personal information was compromised by the mistake.
January 2014: Controversial DHHS spokesman lands DC PR job
Controversial DHHS spokesman lands DC PR job The federal government threatened to pull administrative funding for the food stamps program from North Carolina because the state failed to make promised improvements to the NC FAST computer program. The letters contradicted testimony DHHS officials gave to state lawmakers in October and November that indicated the food stamps enrollment system had initially experienced problems this summer but was working mostly as it should by the fall.
January 2014: Doctors sue over Medicaid billing problems
Doctors file suit against NC, call Medicaid billing system 'disaster' North Carolina’s Medicaid billing system has been so dysfunctional that it costs doctors time, money and patients, according to a class-action lawsuit filed by a group of medical providers in early January 2014. The suit alleges DHHS and some of its computer services providers were negligent in developing and implementing NCTracks. Doctors from Cumberland, Nash, New Hanover, Robeson and Wake counties are part of the suit and claim "NCTracks has been a disaster, inflicting millions of dollars in damages upon North Carolina’s Medicaid providers."
February 2014: Records request shows little work by highly paid contractor
A government contractor credited with saving North Carolina taxpayers millions left behind little documentary evidence of that work. Joe Hauck was paid $310,000 in less than 11 months as a consultant to state Health and Human Services Secretary Aldona Wos before returning in December to his job as an executive at a private company run by Wos' husband.