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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.”

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Republican Gov. Pat McCrory issued a memorandum this afternoon to state agencies directing them to stop salary increases and send extra dollars to the state Medicaid office to offset an anticipated budget shortfall.

McCrory’s memorandum came with a critical reference to his predecessor, former Democratic Gov. Beverly Perdue, and how her office dealt with Medicaid shortfall issues by adjusting the budget.

McCrory with lawmakers signing the No Medicaid Expansion law

McCrory with lawmakers signing the No Medicaid Expansion law

“It is time to solve the mess, not kick the can down the road and manipulate the budget as was done in the past,” McCrory said, according to a written statement. “It stops now.”

The state is anticipating $70 million to $130 million more in expenses for Medicaid in the current fiscal year, which ends June 30, than the $13 billion budgeted by the state legislature.

McCrory also indicated in the memorandum that state revenue was up by $100 million, removing most of the sting out of the anticipated shortfall.

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Today’s headlines highlight a audit of the state Medicaid program that shows an over $1 billion shortfall.  “Shocked, shocked, I tell you!” are Republican Governor Pat McCrory and DHHS Secretary Aldona Wos that the Medicaid agency did not meet its budget:

Dr. Aldona Wos, secretary of the state Department of Health and Human Services, said at the news conference that the agency will change the way it operates. “Cost overruns will not be tolerated and will not be acceptable,” she said. “There’s a budget for a reason.”

But the major finding in the audit, the one that has gotten all the headlines, that NC’s Medicaid program wasn’t able to meet the budget set for it by the Republican majority in the General Assembly (and passed over former Democratic Governor Perdue’s veto) shouldn’t be a surprise to anyone.  As former DHHS Secretary Lanier Cansler said on August 4, 2011:

“It’s just really going to be next to impossible to achieve this budget, and I’m not sure where the legislature will go with that,” Cansler said. “The fact that this budget plays into next year (means next year) is going to be a difficult budget year as well.”

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