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 Thursday.

The suit alleges the state Department of Health and Human Services and some of its computer services providers were negligent in developing and implementing a new Medicaid claims billing system, known as 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.”

The suit names DHHS, Computer Sciences Corp., Maximus Consulting Services and SLI Global Solutions as defendants.

The 48-page document outlines many struggles that medical providers encountered:

• rejected claims
• delayed or wrong payment amounts
• non-compliance with federal law
• simple system downtime

For example, NCTracks wasn't programmed to handle certain type of pregnancy claims, so one ob-gyn clinic hasn't been reimbursed since July 1, said Camden Webb, an attorney for the doctors

"The compensation to those doctors' practices is due, but also the system needs to be fixed," Webb said. "One aspect of the lawsuit that we point out is the software system has caused the state of North Carolina to be out of compliance with Medicaid reimbursement rules."

Knicole Emanuel, another attorney representing the doctors, said providers are supposed to be paid within 90 days of billing.

When providers began complaining about NCTracks last summer, CSC changed how calls were handled, according to the lawsuit. Initially, people were left on hold for hours, but to improve response time measures, the vendor then had operators obtain numbers and simply not call people back, the suit states.

Joe Cooper, chief information officer for DHHS, declined to comment on the lawsuit, but he said NCTracks has processed more than $5.5 billion in claims in the last six months, outperforming the system it replaced.

"As with any implementation of an IT system of this size and complexity, the transition has not been without challenges," Cooper said in a statement. "DHHS continues to address provider issues as they arise and will not rest until every provider is fully transitioned to the new system."

Webb disputes DHHS claims that most of the defects in the NCTracks system have been fixed.

"A lot of problems are recurring, and we're finding new problems with the software, and that's a genuine concern," he said.

Sen. Floyd McKissick, D-Durham, said DHHS is taking care of providers on a case-by-case basis, but that's not a long-term solution.

"The problem is there's so many providers that have not been paid that that approach just can't work in an effective way," McKissick said.

The Medicaid process, when it works, provides health insurance to low-income people and some with disabilities. They go to a certified medical provider who then bills the government and gets reimbursed. Doctors across the state have complained since the NCTracks rollout that delays or denials of expected reimbursements have put them behind, forcing some clinics to stop accepting Medicaid patients and even to close their doors.

"Prior to July 1, 2013, Medicaid providers routinely submitted bills and received weekly electronic payments for services rendered, and payments were made in accordance with Medicaid reimbursement rules," the lawsuit states.

In the complaint, the doctors lay out the timeline of a project that took a decade to build and came in more than $200 million over budget.

The three vendors named in the suit contracted to deliver different elements of the project:

• CSC was to provide a claims system for health care providers, train them to use it and and offer phone support.
• SLI was to test the system for usability.
• Maximus was to provide a second layer of testing and verification for the software.

The suit details alleged wrongdoing by each vendor, claiming each "failed to exercise a reasonable degree of care."

“You could see this coming. You could see the harm coming, and yet the decision was made to do it anyway," Webb said.

"The problems were absolutely preventable, and they know they should not have gone forward,” Emanuel said.

The North Carolina Medical Society issued a statement in support of the doctors.

"NCTracks has inflicted real damage on Medicaid patients and providers across the state for the last seven months. We understand, from our own tireless efforts to help our members overcome the system defects, that legal action may be the only remaining option to remedy the harm to the Medicaid system and get NCTracks to function as advertised," the statement said.

Senate Minority Leader Martin Nesbitt said the lawsuit reinforces the case he and other Democrats have made for Gov. Pat McCrory to replace DHHS Secretary Aldona Wos.

“We’ve said from the beginning, the challenges facing DHHS are not about politics, they’re about people, and thanks to the continued failures of the McCrory administration, people have been hurt," Nesbitt said in a statement. "In this case, doctors were being put of business. They’ve been shouting for help, but Gov. McCrory refuses to demand a plan from his appointees to solve these problems, and so now doctors are forced to sue."

McKissick added, "Either we change leadership at the top, change the staff underneath or we change both, but the status quo is unacceptable."