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DHHS to repay federal Medicaid funds

The Department of Health and Human Services will pay back over the next year more than $300 million to the U.S. Centers for Medicare and Medicaid.

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RALEIGH, N.C. — The state Department of Health and Human Services said Friday that it will pay back more than $300 million to the federal Medicaid program that was mistakenly paid out because of accounting and billing errors.

DHHS will return approximately $200 million to the U.S. Centers for Medicare and Medicaid by July 31 and will pay the rest over the course of the next fiscal year.

DHHS received more than $7.5 billion this past year from CMS to assist in funding the state’s Medicaid program.

Medicaid funds began to be overdrawn in early November, when accounting changes were made to a database to reflect the federal Medicaid matching rate changes for North Carolina, DHHS said.

Public hospital payments were incorrectly charged to a federal account instead of a state account, which resulted in federal funds being overdrawn.

“This mistake should not have been made. Originating almost eight months ago, it should have been identified and reported earlier," DHHS Secretary Lanier Cansler said in a statement.

“The safeguards that were in place to prevent this type of error were inadequate. There were breakdowns in communication and oversight, and corrective actions will be taken quickly.”

The error was reported to Cansler on July 15 and will not affect assistance to Medicaid recipients, DHHS said.

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