Apr 17

Apr 17 Sen. Jim Perry: State audit reveals $800 million in overpayments

A recent audit of how the how the state of North Carolina managed Medicaid payments over the last three years has left me shaking my head in disbelief.

The audit, conducted by Democratic state auditor Beth Wood and the subject of a recent presentation to stakeholders, concludes that the state Department of Health and Human Services massively overpaid providers, failed to monitor whether Medicaid beneficiaries were even eligible for the program, and missed hundreds of thousands of dollars of Medicaid funds spent on luxury resorts and lobbyists.

Forget, for one moment, the idea about placing blame, or criticizing DHHS. Let’s focus on understanding the issue.

I take pride in balancing my feelings and response, but I am angry about these results. While thousands of people with intellectual and developmental disabilities sit on a Medicaid wait list, unable to get funding for proper care, state regulators overpaid Local Management Entities/Managed Care Organizations (LME/CMOs) by $800 million.

Beth Wood, the auditor, said that of “the $800 million [the companies] are sitting on, there hasn’t been any — very little I’ll say — reinvestment or help to those sitting on a wait list.”

To put it another way, our tax dollars were given to LME/MCOs to pay for medical services, but the money wasn’t spent on medical services at all. It’s just sitting idly in the LME/MCO accounts.

Those funds should instead be spent on the people of North Carolina who need services. The legislature has taken action to try to fix this problem by reducing state funding to these organizations while requiring the same level of care, but clearly other options need to be considered.

We also learned the taxpayer funding spent on Medicaid may not even be going to eligible Medicaid beneficiaries. A 2017 state audit found eligibility error rates of up to 23.2 percent in some counties, despite the fact that state regulators are responsible for ensuring funds go only to eligible recipients.

Again, let’s skip blame, and focus on understanding.

We know we have an opioid abuse issue, and I have groups trying to make a difference, but they can't get funding. Meanwhile, this money intended to help provide care is sitting in CMO bank accounts. We have volunteers paying for Narcan or Naloxone out of their own pockets. N.C. House Majority Leader Rep. John Bell and I have spent significant time fighting to obtain funding for an opioid crisis center for our people, and then we read stuff like this? This is absolutely crazy.

According to Wood, Medicaid spending is projected to grow by 6 percent per year for the next 10 years, making it unsustainable because revenues will lag behind spending. When we add a dose of poor oversight to this equation, the problem will only get worse.

Friends, Beth Wood is a registered Democrat. I am a registered Republican. Regardless of what we may read, everything is not a partisan issue. This is a people issue, and this is about right and wrong. The concerns about Medicaid expansion are not political concerns, they are real world concerns about real world problems.

The state audit turned up troubling management concerns, and there are some calling to add another 600,000 people to the Medicaid program. They make this recommendation because it feels good and it’s the political topic du jour. But it’s a recipe for chaos and financial disaster based upon the issues we know exist. These thoughts do not make me a bad person, they make me a fiscally responsible adult.

I am tired of hearing my fellow citizens tell me about millions of dollars of needs in my district, then reading stuff like we see in this audit. I serve on several health committees in the Senate and we are going to have to address this major problem. It is wasting our money and depriving people of the care we have already paid for them to receive.

Sen. Jim Perry
North Carolina Senate, District 7
311 Legislative Office Building
300 N. Salisbury Street
Raleigh, NC 27603
Phone: (919) 733-5621