Fingerpointing, but no solutions for Medicaid shortfall

Posted December 13, 2011

State lawmakers overseeing Health and Human Services met all day Tuesday in Raleigh. But the $139 million Medicaid cash shortfall didn't even make their agenda.

State Health and Human Services Secretary Lanier Cansler says the program, which serves more than a million people in North Carolina, will not be able to achieve more than $350 million in cuts mandated by the state budget under its current operations.  

Cansler says the budget offers him only one option to accomplish the required savings: deep cuts to optional services and to the reimbursement rates the state pays Medicaid providers.

Republican leaders say those cuts won't happen.

Even if the state were to try to make those cuts, budget co-chairman Rep. Nelson Dollar (R-Wake) said Tuesday, the federal government would not approve them. "It's a practical impossibility," he said. "I think that maybe some people who've been worried about that should not be."   

When committee Democrats asked why the shortfall wasn't on the agenda, Dollar said it's up to Governor Bev Perdue and Secretary Cansler to find the money to cover the problem. 

"We've extended a hand to the governor's office to work with her, and have gotten a lot of politics in return," Dollar said.

Advocates say they're less interested in the politics of the battle than its potential casualties: Medicaid enrollees worried about losing vital services. DHHS Secretary Lanier Cansler Lawmakers disagree on fix for Medicaid budget shortfall

"This is one of the most critical issues facing our state right now, and it's not on the agenda," said Mary Bethel with AARP North Carolina. She waited hours for the chance to deliver a three-minute statement on behalf of two dozen groups representing Medicaid recipients and providers.

Bethel says the state's most vulnerable people are waiting for a solution. "Folks right now are being caught in the middle between divergent views on how to handle this," she said. "It’s time that we bite that bullet and come together and do the right thing."

Bethel says Dollar's statements on service cuts made her hopeful. "But we've been hopeful before," she added. 

Cansler was similarly wary. "Medicaid bills have got to be paid," he said, "and sooner or later, someone's gonna have to figure out where the dollars are gonna come from to pay those bills."

Cansler said it's unlikely that he and Perdue can find the money to cover the cuts elsewhere.  "With all the cuts over the last few years, we don't have that much money to move around," he said. "Which means the money's going to have to come from somewhere outside of Health and Human Services. Which is going to take some legislative assistance." 

That seemed less likely after lawmakers were told about problems with the state's contract to rebuild its Medicaid billing system. The 2008 contract with contractor CSC has ballooned from $287 million in 2008 to $495 million today, in large part because it's running almost two years behind schedule. All but about 10% of the total is paid with federal dollars.    

According to legislative staff, a soon-to-be-released audit will show slow response times and poor oversight by HHS is partly to blame for the delay.

House Speaker Thom Tillis said the report raises "serious concerns about fiscal management" in HHS. 

"I believe it is important that the legislature be very cautious when considering providing more funds to a department that has problems managing the resources they already have," Tillis said in a written statement. "Every dollar that is wasted through mismanagement is a dollar less that can be spent on critical services provided to the citizens of North Carolina."

But Cansler said reports of mismanagement are overstated. He says delays in the project are mostly due to changes in federal rules, particularly those related to healthcare reform.

The Medicaid program handles 8 million claims a month from some 70,000 providers. Changing it, Cansler says, is like "trying to build an airplane in mid-air."

"To say it’s management or to say it’s the vendor or to say it’s the state – you know, everybody could be improved, there’s no question about it. But the fact of the matter is – and I think this is one of the issues the legislature doesn’t understand – this is the most complex system we’ve ever tried to build, and its just not gonna happen easy," Cansler said.  

DHHS spokeswoman Renee McCoy was more blunt: "The Republican-controlled General Assembly is trying to divert attention away from the Medicaid budget and the potential of slashing funding for children, seniors and the disability community,” she said.

Perdue's office took the same approach, noting that except in budget emergencies, the governor doesn't have the power to take money lawmakers haven't appropriated.

"The Governor appreciates Rep. Dollar attempting to give her new authority, but the budget he helped write doesn't do that," said Perdue press secretary Chris Mackey. "What Rep. Dollar failed to say is that he and the rest of the Republican leadership passed an extreme budget that shortchanged children and seniors, and now the Republicans are asking the Governor to bail them out."  

It'll likely be 2012 before any solution is found. The final HHS budget oversight meeting of the year, scheduled for next week, has been cancelled. 


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  • henrymiller Dec 14, 2011

    The solution is simple: abolish Medicaid. It should never have been established in the first place.

  • Mark Hayes Dec 14, 2011

    You cannot revamp the system without doing the same to those that are presently running it,a change of faces would have to be made and they are not going to turn on one another when the money is not coming out of their own pockets.

  • storchheim Dec 14, 2011

    Story: "Cansler says the budget offers him only one option to accomplish the required savings: deep cuts to optional services and to the reimbursement rates the state pays Medicaid providers."

    First, Lanier, that's TWO options. No wonder the costs are out of control.

    Second, optional is just that: OPTIONAL. Get rid of those services.

    "The final HHS budget oversight meeting of the year, scheduled for next week, has been cancelled."

    Yes, they have to go do their Christmas shopping while their calendars say they're in "off-site meetings."

  • not my real name Dec 14, 2011

    apparently the solution is to terminate benefits for KIDS! I just got the letter yesterday and I'm not happy about it at all. After 10 years of receiving benefits suddenly he's not eligible anymore even though his autism is still the same.

  • whatelseisnew Dec 14, 2011

    Just another reason why Medicaid should not exist. Also the States were just dumb to ever except any responsibility for getting involved with Medicaid. It was a foolish harmful Federal Program and should have remained their sole responsibility. Perhaps one day we will see the end of this foolish program. In the meantime it will just continue to have cost shifting to the backs of people that pay for it through taxes and once again with higher private insurance premiums and higher costs for medical treatment. And yet most people think the problem is the private insurance companies. It is not, it is Government Government Government.

  • Mark Hayes Dec 14, 2011

    For years I have listened to how if we do not pay our state employees a above average salary for their efforts then we will lose this great work force who get very lucrative benefits and retirements,well most of our state ran programs are in shambles with corruption running rampid in our social systems yet the same faces turn up in different state ran departments as they move from one job to another,in the private sector many of these same people would have long been dismissed for lack of performance but government employees have a fraternity type enviroment they work in and even though many see the problems they are committed to the code of silence brought on by fear of job loss or alienation from fellow employees.

  • Mark Hayes Dec 14, 2011

    nanasix,"Well said and to the point,but when those that are advocating for some of the recipients you mention and our politicians pay more attention to their concerns than our own we will always be the host of the bottom feeders who are draining the well dry and even now they are going to use billboards on our roadways to invite more to take part in the feast of entitlements that they have no rights to,we are the forgotten ones.

  • kota29473 Dec 14, 2011

    I've also said time and time again Get rid of the BUMS,You dont work you get nutting.Check the work history of welfare apps,if you havent worked,when you ask for help you get nutting.Ifen you get shot in a driveby and its work related(drug deal)you get nutting.WHY ARE WE AFRAID TO SAY NO.

  • Mark Hayes Dec 14, 2011

    When our system is allowing illegals to have access to medicaid and others who have made a career out of using or I should say abusing the system yet they go unchecked with no one really investigating into their undetermined stay on the system I feel that the management of these programs and staff are to blame,many deserving are turned away as the undeserving continue to reap the entitlements of others,you can't continue to support illegals and lifelong abusers and exspect to have enough funds,yet instead of removing those who are guilty of abuse the individuals running these programs are finding their job easier to just let things as they are rather than fight with some advocates who respond if they feel their chosen few are denied benefits,when you post billboards that welcome immigrants with no means of self support this state must realize where that support will come from.

  • pat7 Dec 14, 2011

    But wait there is more money to take away from the people, Lets take they are all fools ,SHHHHH they voted us in office ,What carps / sucker fish people