Medicaid system broken? Report finds McCrory admin downplayed explanations for problems

The state Medicaid system, and its very troubled billing system called N.C. Tracks, is the topic of a much anticipated legislative oversight committee hearing happening this morning. You can watch here, through a live stream offered by Raleigh TV station WRAL.

Also check out this story today from. N.C. Health News that found McCrory administration appointees at the N.C. Department of Health and Human Services removed explanations behind cost overruns in the state’s Medicaid system and other findings from a critical audit released in late January

That audit has been held up by Gov. Pat McCrory and DHHS Sec. Aldona Wos as a reason to open up the state’s $13 billion Medicaid program to private managed care companies.  Staff in place during the end of former Gov. Bev Perdue’s administration had responded to draft versions of the audit with explanations that many of the cost overruns were due to impractical funding levels set by the state legislature, and that the overhead cost comparisons to

From the N.C. Health News article:

Soon after taking control in Raleigh in early 2013, people hired by Gov. Pat McCrory to run the Department of Health and Human Services made strategic edits to the departmental response to State Auditor Beth Wood’s audit of the North Carolina Medicaid program.

Documents obtained by North Carolina Health News through a public records request show that in January, incoming Sec. Aldona Wos and Medicaid head Carol Steckel eliminated detailed explanations of alleged high administrative costs, management problems and budget overruns in past years.

The resulting document accepts the criticism in Wood’s assessment wholesale and paints the health care program that covers 1.6 million North Carolinians as “broken.”

The criticisms contained in the audit have yielded talking points used by Wos, Steckel and McCrory for the past eight months as justification for turning down a federal expansion of the program under the Affordable Care Act and proposing to privatize the program.

The original response to the audit created in December 2012 by outgoing officials from Gov. Bev Perdue’s administration was revised in successive editions of the document throughout January, with a decisive, near-final edit by Steckel.

In a document that displays “track changes” that include Steckel’s electronic signature, whole paragraphs were deleted, with evidence that, for example, North Carolina’s administrative costs are lower than most states rather than 30 percent higher, as maintained by McCrory administration officials.

Incoming administration officials also deleted whole sections explaining that budget overruns were in large part a function of under-budgeting by the General Assembly.

And in her first week in her new office, Steckel struck through paragraphs explaining that Community Care of North Carolina had been studied by two national groups that found cost savings. Instead, she inserted language casting doubt on the efficacy of CCNC and suggesting further study of the statewide program that’s been lauded nationally and that is being replicated in several states.

You can read the entire article here.


  1. love my state

    October 8, 2013 at 11:12 am

    this administration is a disgrace! i’d say they should be ashamed of themselves, but they have no shame. may karma reward them tenfold.

  2. Alex

    October 8, 2013 at 1:40 pm

    I agree the Obama administration is a disgrace to this country !

  3. Alan

    October 8, 2013 at 4:47 pm


    I think you meant to say ‘the Cheney administration is a discrace to this country’.

    I guess you were unable to come up with some spin around this article…

  4. LayintheSmakDown

    October 8, 2013 at 5:54 pm

    Alex +1!

  5. Alan

    October 8, 2013 at 9:07 pm

    Alex -10, and still no spin!

  6. GOP Rules

    October 9, 2013 at 11:19 am

    I read the whole article. The arguments do not really make much sense, especially the “hidden in managed care contracts” issue. The DHHS management does not have direct control over the admin costs in those contracts and the portion of the audit being referenced seems to be comparing administrative expenses that are outside that realm.

    Now when you include the information on contracts, that could be an instance where they are doing a good job managing those contracts and negotiations. Which is at least one good thing that could be going on in the broken NC DHHS system. I tell you Wos has a lot to overcome in cleaning up that mess.

  7. Doug Gibson

    October 9, 2013 at 2:26 pm

    Sarah, a couple of questions: was the DHHS response part of the audit process—something that the state auditor would be obliged to consider before releasing a final report? Could the auditor have acted on the information she received to amend her report?

  8. LayintheSmakDown

    October 10, 2013 at 7:19 pm

    Typically an audit response, at least in a business setting would outline the actions that were going to be done to remedy the problems; As close as the transition was to the issuance, you would expect that the incoming management would have a new response (especially considering the mess they were picking up and the bogus responses of the prior regime) to give. It typically would not involve the change in opinion for that audit, but typically a follow up would be scheduled to judge progress. The essence is the audit is to report on the situation as they saw it regardless of management’s response.

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