Raleigh, N.C. — A few months shy of its two-year anniversary, the state's upgraded Medicaid payment system earned a federal seal of approval this month that will mean millions in additional funding.
The federal Centers for Medicare and Medicaid Services in April certified NCTracks, launched in July 2013 to simplify the Medicaid billing process for providers such as doctors' offices and hospitals. The federal government will now pay 75 percent of the program's operating costs, with the state picking up the remainder.
Prior to federal certification, the state split the operating costs with CMS 50-50. But officials with the state Department of Health and Human Services say that, since the certification is retroactive to the program's launch date, the state will be due about $19 million to cover the difference.
"It's real dollars for the citizens of North Carolina," Joe Cooper, chief information officer for DHHS, said.
The announcement comes nearly nine months after a 2014 state audit criticized DHHS officials' progress toward federal certification. Auditors said the department had missed an initial July target and failed to provide details on how it would meet a new certification target date of October.
But Cooper said it wasn't accurate to categorize the revised timeline as "delays." DHHS officials, he said, informed CMS before July 2014 they would be ready for a certification review in the fall.
"In talking to CMS, they said they don't know of any state that's achieved certification in 12 months," Cooper said.
He said the state also helped federal officials by participating in a new certification program that took a little longer. Because the federal funding would be retroactive, Cooper said, the department's focus was getting certified before the next two-year budget cycle begins in July.
"We were never concerned about the timing on this as long we got it done this biennium," Cooper said.
Designed to streamline the process of reimbursing medical providers for services to patients with Medicaid, the insurance program for the poor and disabled, NCTracks faced a rocky start after its launch on July 1, 2013. Some providers eventually sued the state over problems getting paid.
Cooper said the new system, which replaced one that had been in operation for nearly 35 years, was a big change for providers, and he acknowledged that providers did have issues that DHHS worked with them to correct.
But the system has continued to improve, so far processing more than 360 million claims and paying out more than $19 billion to providers, according to DHHS figures.
Cooper said that has meant better fraud protection and cost-saving efficiencies for taxpayers as well as better access to claims information for providers.
"We continue to outperform the old legacy system by almost every measure," he said.