Local News
9:39 am
Fri February 1, 2013

Audit Finds N.C. Medicaid Program Is Wasting Money

An independent audit found North Carolina's Medicaid program has been horribly managed in terms of administrative costs and budgeting.  State Auditor Beth Wood released the report Thursday, which examined how the Department of Health and Human Services has overseen Medicaid the last three years.

Let's start with some perspective on just how big the state's Medicaid program is. More than 1.5 million North Carolinians use it, and it costs the state about $36 million a day.

"With a budget of that size, this department really has huge responsibilities to the taxpayer of the state," said new Secretary of Health and Human Services Aldona Wos. "Previously, we have not been very accountable for the money that we spent."

The more than 70-page audit has all the gory details. The General Assembly asked State Auditor Beth Wood last year to conduct the audit. Here's what she found:

"The administrative spending for the state's Medicaid program is 38 percent higher than average of 9 states with similarly sized Medicaid programs," Wood said. "In real dollars, that means that the state is spending $180 million more than average of peer states."

Wood said those administrative costs are coming from more than 10 divisions within the Department of Health and Human Services, even though only one is supposed to be in charge – the Division of Medical Assistance.

The audit also found that budgeting for the program is so flawed that it may break state law.

"In at least one case, Medicaid program officials told us that they didn't really know what the spending was going to be in that particular area, and so they budgeted zero dollars," Wood said.

Governor Pat McCrory thanked her for uncovering the issues.

"Every dollar that is mismanaged at the (DHHS) for Medicaid is one dollar less that is available for medical services, education or things like road and bridge repair," McCrory said.

He said Secretary Wos is already addressing some of the problems, and he pledged to fix what he called a broken government system.