Medicaid program shortfall, consulting fees rankle lawmakers

Posted April 17, 2014

— North Carolina's Medicaid shortfall will be between $120 million and $140 million this year, a big number but smaller than cost overruns from the past five years. 

"We're much more on target now than we have been in years past," said Rod Davis, the Department of Health and Human Services' chief financial officer. 

Medicaid is the joint federal and state program that provides health insurance to the poor and disabled. The $13.8 billion program is a perennial thorn in the side of lawmakers, who have frequently been surprised by requests for more funding in the latter part of the state's fiscal year. 

"I applaud Mr. Davis in terms of having $140 million (shortfall) rather than $500 million," said Sen. Tommy Tucker, R-Union. "I don't know if it's time to break out the champagne." 

The projected shortfall is roughly the same as an estimate given during Health and Human Services Oversight meeting in March. 

Other lawmakers were more charitable in their assessment, saying that any program as large as Medicaid will have cost overruns that are large in dollar terms, even if they are a small percent of the overall budget.

"The progress that has been made to be within 1 percent or 1.5 percent ... is tremendous progress," said Rep. Nelson Dollar, R-Wake.

A precise handle on the Medicaid budget has eluded DHHS and lawmakers alike because new computer systems designed to process claims have not been able to produce promised data.

Davis told lawmakers that several items were creating uncertainty in the Medicaid budget, including an unknown amount of claims that haven't been submitted by health care providers and the potential for an influx of new Medicaid beneficiaries that have signed up through the Affordable Care Act. 

Davis and DHHS Secretary Aldona Wos told lawmakers they have hired a consultant to help streamline the agency and help make budget forecasts more reliable.

"We've got here another single-bid $3 million contract," Tucker said, expressing frustration that a large agency with thousands of staffers could not have found workers to do such a review.

Wos said that DHHS' staff has shrunk and doesn't have the ability to handle both day-to-day tasks as well as plan for the future. 

"This was an example of success. If this was able to be done by the employees of DHHS over the past 14 years, it would have done," Wos said. "We would love to be at our desks working, but we are here to provide you with the information you requested."


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  • teleman60 Apr 18, 2014

    The Medicaid ACA funding is 100% for the first 3 years then 90%.

    By denying the Medicaid funding the gop made 400,000 NC poor have no healthcare - WHICH MEANS THEY WILL GO TO THE ER ANYWAY!!! Only the hospital will have to absorb the costs! That's why hospitals WANT STATES to expand Medicaid to rescue them financially, otherwise the hospitals will go bankrupt being forced to provide care to the poor by law for FREE!!

    Only fools insist hospitals provide care and yet say NO when they want to be paid.
    Republicans are real good at forcing govt to make choices in other peoples lives. But NOT When it comes to them.

  • 50s Child Apr 18, 2014

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    You do know how the Fed was going to raise those billions of dollars, don't you?

  • 50s Child Apr 18, 2014

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    That may be true, but don't discount the old-timers who don't want newcomers to show them up, especially if they're "girls" (yes, they actually call women "girls" there), roll their eyes and make complaints of "incompetence" against one who does ask questions in order to shut her up, and spend their days not "at their desks working" but in other people's offices, spreading lies and gossiping. You should know you're paying one guy over $78,000 a year, and like a naughty child, he has been written up literally for not "being at his desk working". But he's protected by one of the old-timers who makes over $82,000 a year. And this was way before Wos ever set foot in the building.

    Doubt this will pass the mods, but this should have been addressed at least twenty years ago if not longer. No one's going to address it now unless they want to be shown the door. I don't know what the answer is, but firing Wos won't fix much.

  • teleman60 Apr 18, 2014

    What about Wos's husband's buddie that charged NC $300,000+ for 9 months work and left NOT ONE PIECE OF PAPER in his wake?? What about the governors two college campaign workers, could they do something for their $80,000+ salaries?

  • Smilester Apr 17, 2014

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    So instead our Federal tax dollars go to other states while we get nothing in return except the highest insurance premiums in the southeast. That makes sense.

  • rduwxboy Apr 17, 2014

    I'd be curious who the consultant was, Duke Energy?

  • Apr 17, 2014

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    No you didn't.

  • dennis8 Apr 17, 2014

    So getting rid of staff and freezing or cutting pay has led to a situation where the state must contract with a for profit company to do IT work. Yet the GOP insists those contracts, that they are now complaining about, save the state money.

  • lucasd06 Apr 17, 2014

    What's with all the complaints? Cost overruns have been SIGNIFICANTLY reduced, thereby being that much more effective with our taxpayer money. McCrory and NC lawmakers have done some shady things this term.... but this should be something that both liberals and conservatives should applaud.

  • Olenc Native Apr 17, 2014
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    THANK YOU!!!! Obamacare doesn't go far enough!! America needs a single payer system now!!!