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State audit: NC Medicaid paid health care providers with suspended, restricted licenses

The state Medicaid program paid millions of dollars to health care providers with suspended, revoked, or restricted licenses, the NC Auditor’s office found.

The audit identified weaknesses in tracking professional boards’ disciplinary actions and in the recertification process required of providers and companies that treat patient who use Medicaid.

“Because the Division allowed all providers who had professional license limitations to remain enrolled, there was an increased risk that providers whose actions posed a threat to patient safety were enrolled in Medicaid,” the audit said.

In its written response, the state Department of Health and Human Services said it had begun to make the recommended improvements. Dr. Mandy Cohen, DHHS secretary, said in the response that the state is trying to get $13.4 million back from unqualified providers.

Medicaid is government health insurance for low-income children and parents, elderly people, and people with disabilities. About 2.2 million people were enrolled in Medicaid or the Health Choice insurance program for children last year, according to a state report on the programs. The two programs cost about $16.8 billion last year, according to the report. The federal government paid $13 billion and the state $3.8 billion, the report said.

State auditors checked 66 providers who took Medicaid money and had been disciplined by their licensing boards. Of the 66, 26 had had their licenses suspended or revoked. Eighteen of the 26 had not been removed from the Medicaid program. Eight had licenses suspected or revoked for substance abuse, two for sexual misconduct/inappropriate behavior with women, and one had a felony conviction related to health care fraud, the audit said.

Thirty-six of the 66 had license limitations. One oral surgeon’s dental license was revoked after the death of a patient following surgery and after the NC Board of Dental Examiners found a “deliberate, dishonest plan or scheme to routinely and systematically defraud the Medicaid program and to enrich himself for his own personal gain,” the audit said.

The oral surgeon kept his medical license and was allowed provide services that required a dental license. The provider billed $1.5 million for 1,460 Medicaid patients from July 2016 through June 30, 2020, the audit said.

DHHS said it did not know when the audit started that it could remove from the Medicaid program providers who had limitations on their licenses. While the audit was ongoing, DHHS asked the federal agency that oversees Medicaid if those providers could be removed, and learned that it was up to the state to determine whether it was comfortable having them in the program.

DHHS said it established a policy for reviewing providers with license limitations in August 2020. The policy describes when providers should be disqualified from taking Medicaid money and when they should be monitored.

Since a committee was established, 52 providers have been reviewed for license limitations. Six providers were cut off from the Medicaid program, a dozen were monitored, and 34 were determined to be low risk, DHHS wrote.

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