DHHS faces string of problems, PR missteps

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: 

Group home funding slow to emerge

McCrory: 'Mistakes were made' on Lightfoot

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.

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.

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."

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. 

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.

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. 

Statement by DHHS regarding contract employee

State health agency gave big contract to Wos acquaintance

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.  

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.

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.

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.

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.

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.

Questions remain on WIC closure

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.

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. 

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.

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.

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.

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.

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.

{{embed a href="blogpost-13282246"}Diaz leaves his job for a position with a D.C.-based political media firm. Diaz, who had been a lightening rod for criticism, left his post effective Jan. 24 to become vice president of FP1 Strategies LLC, a public affairs, advertising, grassroots and media relations firm headed by Republican operatives.

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.

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."

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.