State fires Medicaid chief

Posted June 19, 2012

N.C. Department of Health and Human Services

— Department of Health and Human Services Secretary Al Delia has fired Craigan L. Gray, the head of the state's troubled Medicaid program. 

"I was dismissed because the Medicaid program had a budget shortfall," Gray said during a brief phone interview Tuesday. He was about to go into a meeting to wrap up work as director of the Division of Medical Assistance. 

Gray was appointed April 27, 2009 and his last day is today. He holds both law and medical degrees and earned $270,000 per year.

His replacement will be Michael Watson, who is currently DHHS chief deputy secretary. According to a news release, that position will be elevated to serve on the Secretary’s executive leadership team. Watson's salary will remain $160,000.

“After nearly six months in this role, my first priority for strengthening our management team is to elevate the state Medicaid office to play a more prominent role in the Department’s decision-making process,” Delia said in a news release. “Medicaid is not a stand-alone division. It touches not only multiple DHHS divisions but also plays a huge part in shaping the state budget. We need better communications and stronger oversight of this $12 billion program. I believe these changes will accomplish that.”

The state's Medicaid program will cost about $13 billion in state and federal funds this year. Cost overruns have been a near-annual event in the health insurance program for the poor and disabled. However, tensions over the shortfalls became more intense as Republicans took over the legislature in 2011 and the state's fiscal woes worsened.

The gap in the current year's budget is expected to be at least $205 million. Lawmakers passed a patch for the shortfall earlier this year. The Associate Press has reported that current year gap may be $75 million more than that and a document obtained by WRAL shows that the total Medicaid budget shortfall for the year might total as much as $414.7 million. 

Lawmakers knowledgeable about Gray's firing said it was this growing shortfall that prompted his firing. Chrissy Pearson, a spokeswoman for the Department of Health and Human Services, pointed to Delia's statement and added that Gray's departure was part of a larger overhaul of the department. 

"He was replaced because the secretary reorganized management of that division and wanted to bring in someone with a different perspective and experience," Pearson said. "As you can see, this was much bigger than simply saying goodbye to a single employee."

But in a second interview, Gray insisted he was fired because of the shortfall.

Gray said that he would "leave well" and didn't express any hard feelings. However, he noted that lawmakers set the Medicaid budget and did not heed warnings from staff members. He described administration officials as "tangential" to the process that created last year's budget.

Word of Gray's dismissal had begun filtering to lawmakers involved with health policy Tuesday.

"Medicaid is the biggest problem we have," said Sen. Stan Bingham, R-Davidson. Bingham said he did not know the specific reasons for Gray's firing but said communication between the agency and lawmakers had been difficult. 

"We have asked for answers and had difficulty getting them," Bingham said. That's been particularly true, he said, of establishing the reasons for cost overruns in the program. 

"Change is going to be inevitable because we cannot continue to go the route we're going," Bingham said.

Rep. Nelson Dollar, R-Wake, said the Medicaid director's job was one of the hardest positions in state government. That said, Dollar said that Gray had not worked well with lawmakers. 

"I am disappointed in him, frankly," Dollar said. "We simply did not get the dialog or the relationship we wanted...He did not embrace the approach we were looking for."

Since taking office, Dollar said, Republican lawmakers have wanted to "streamline" and make changes that would save money in the Medicaid program. 

Dollar said he hoped the next Medicaid director would be someone looking to make those changes as well as someone who would be more inclined to work with lawmakers. 

Gray said that he was limited in his communications with lawmakers by department policy. Although he could respond when invited to speak before legislative committees, other communications were sent through the Department of Health and Human Services central staff. 


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  • justtoponder Jun 22, 2012

    Dr Gray was the wrong one to be "let go" if stopping the escalating cost is the issue. This problem began before 2007 and is anybody really investigating the cause? More and more services are being provided for folks under 21, including baby sitting while the programs for the elderly are being decreased or done away with. The focus seems to be "let them eat cake" until their 21rst birthday then who cares if they can't afford healthcare.

  • ladyblue Jun 21, 2012

    Blaming illegals is just convenient; they do not have the means to fight back.

    they have Pew and plenty of organizations that stand up for them, the blacks have the NAACP and other organizations, but the white citizens in this country have no where to get help when denied medicaid or anything ele.

  • ladyblue Jun 21, 2012

    Medicaid benefits are not assigned given until all Federal requirements are met. The state is getting mugged by Big Pharma, not illegals. Blaming illegals is just convenient; they do not have the means to fight back.

    that is farther from the truth that i ever heard and i worked for social services. For example i'll give youone of my cases to ponder. take a lady coming from Jamaca and while visiting here on visa she had a stroke totally crippling her even could not speak. ended up in wake med and because she didn't qualify for medicaid and couldn't go to the rest home she was in the hospital for over a year (i left agency)) she was still there. But her son and his wife who had a nice home and well educated good jobs, would not take the responsibility..so the bill was costing nc taxpayers in another branch of medicaid ...NC has contracts with the drug companies to get the drugs on discount prices same with medicare drug program.. so as i said you were wron

  • loprestw Jun 21, 2012

    Wrong Scottie, first thing illegals do is to have a kid in the U.S. which gives them all the rights and they immediatly go on medicaid, now thanks to Obama 800,000 once illegal children will be getting Medicaid. I see it all the time in the ER, illegals with false names and numbers producing medicaid cards!

  • Scottie Jun 20, 2012

    "Scottie, not entirely true. The illegals are given the benes and then they sort out the legality later. I'm sure there's never any problem with false docs or disappearing/failure to appear with these fine folk who just want a better life for their kids."

    Medicaid benefits are not assigned given until all Federal requirements are met. The state is getting mugged by Big Pharma, not illegals. Blaming illegals is just convenient; they do not have the means to fight back.

  • muggs Jun 20, 2012

    Seems that no matter what these people get paid,failure or success,makes no difference,most people could go for sometime without working if the had just received this guys package,paying for failure even though it is not entirely his fault should limit his pay package,they keep hiring and firing but also keep paying,that alone is costly.

  • muggs Jun 20, 2012

    Although this subject matter pertains only to medicaid it reflects the conditions of many of our social systems,we are so overwhelmed by the numbers of non deserving recipients and the lack of thorough investigation as to who is qualified to receive them and a time frame for termination,it seems once these people get on the system it turns into a lifetime of entitlement,this is wrong,you can only do so much for people,their failures should not be our burden.

  • muggs Jun 20, 2012

    We have let this government make this country a breeding ground and haven for illegals and their families to raid our social systems and are by law exspected to allow it to go on,if we take the number of those who have come here under questionable means out of our system there would probably be a surplus of funds,to deny they are not a major problem is a just that,denial.

  • truth-hurts Jun 20, 2012

    Illegal immigrants DO receive Medicaid benefits. They can receive "emergency medical services" when they are brought to an emergency room with a life threatening condition. These services also include labor and delivery...

  • tjones261 Jun 20, 2012

    @muggs@taxman:It is the ELEPHANT in the room T. LARSON and company