Doctors file class-action against DHHS, computer company for troubled Medicaid billing system

nctracksSeven doctors’ offices filed a class-action lawsuit against the state’s health agency today, seeking relief for the bungled N.C. Tracks Medicaid billing system that has delayed payments to doctor’s offices and hospitals around the state.

The 48-page lawsuit (click here or scroll down to read) filed this morning in Wake County Superior Court is looking for damages from Computer Sciences Corporation (CSC), the company contracted to build the billing system;  the N.C. Department of Health and Human Services and two companies hired to test the system before its launch.

“The Defendants’ wrongful conduct caused massive delays in payment of reimbursements that were due and owing but simple were not paid due to errors in NCTracks,” the lawsuit states. “By one estimate, the State failed to pay nearly $700 million in the first 90 days of NC Tracks’ operation alone.”

In some instances, patients cancelled payments and doctors’ practices went months without payments, leaving medical practitioners in financial straits, the suit alleges.

Joe Cooper, the chief information officer at DHHS, released a statement Thursday saying the agency doesn’t comment on litigation but is working to make sure the doctors and medical offices get paid.

“As with any implementation of an IT system of this size and complexity, the transition has not been without challenges,” Cooper said in a written statement. “To date, the new system has processed more than 104 million claims and paid more than $5.5 billion to North Carolina healthcare providers, out-performing the 35-year old system it replaced.”

The lawsuit’s filing comes as DHHS deals with fallout from problems with another new integrated computer system, NC Fast, where problems prevented thousands from receiving food stamps. The U.S. Department of Agriculture threatened in December to revoke administrative funding for continuing backlogs of people needing food stamps which the federal agency saw as a “serious failure on the part of North Carolina.”

Several Democratic lawmakers have called for the resignation of DHHS Secretary Aldona Wos, a Greensboro physician and prominent Republican fundraiser appointed by Gov. Pat McCrory to run the massive state agency last year. McCrory has remained supportive of Wos, telling reporters that Wos was left with a state agency in disarray from previous administrations and is contending with increased workloads from the Affordable Care Act implementation.

A judge will need to rule whether or not a class-action standing will apply in the lawsuit, which could open it up to the estimated 70,000 providers who bill the state for Medicaid services.

North Carolina’s Medicaid program spends $13 billion in federal and state money each year, for 1.5 million low-income children, parents, seniors and disabled North Carolinians. Before N.C. Tracks went live on July 1, providers would bill the state and receive payment on weekly schedules, according to the lawsuit. But since then,

After the state parted ways with another company that had been hired to develop the system,  CSC received a $287 million contract in 2006 to create the billing system by 2011, but the project  ran two years late and more than $207 million over budget, according to the lawsuit filed Thursday.

Despite warnings from the state auditor that the billing system was flawed, it went live this past summer, and immediately experienced problems, according to the lawsuit. But there was no back-up system to process claims while the numerous kinks were worked out.

“NCTracks was a disaster, and the State was beyond the point of no return,” the lawsuit alleges.

Robert Seligson, the CEO of the N.C. Medical Society, said legal action appeared to be the only way to fix the issues, in a press release issued in support of the litigation.

“NCTracks has inflicted real damage on Medicaid patients and providers across the state for the last seven months,” Seligson said in a written statement.

The problems with NCTracks have also given a great deal of uncertainly to the state budget. The state fiscal research division on Wednesday told lawmakers that they were unable to see how much the state has spent this year on Medicaid because the problems with NCTracks are so vast.

“We are pretty much in the dark with trying to figure out where we are in the current year,” said Susan Jacobs, a fiscal analyst for the legislature on Tuesday.

Nc Tracks by NC Policy Watch

 

One Comment

  1. Skeptic

    January 16, 2014 at 2:00 pm

    The lawsuits just keep piling up. Keep ‘em coming….