Medicaid program shortfall, consulting fees rankle lawmakers

North Carolina's Medicaid program will likely be $140 million over-budget DHHS officials told a key oversight committee Thursday. Some lawmakers expressed skepticism about a new consultant hired to help streamline DHHS operations.

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Mark Binker
RALEIGH, N.C. — 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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