Friday, February 8, 2013

North Carolina to Address Medicaid Mismanagement

Five GOP governors have decided to shake hands with the devil and accept the suspect promises of the Obama administration.  They decided to accept “free money” for Medicaid expansion.  Under the proposed model, the federal government will cover 100% of the cost for three years, eventually reducing its share to 90%.  Of course, nothing is free.   That money has to come from somewhere, usually through taxation, borrowing, or more likely printing which in itself is a tax by devaluation of the dollar.   And as for that promise of paying 90% indefinitely, does anyone truly believe that?

The problem with Medicaid expansion is that it creates a permanent underclass.  Will those individuals forgo “free healthcare” in lieu of a job?  Will they try to better themselves at the risk of being nudged off the government teat?  In North Carolina, the proposed expansion would enroll 648,000 more dependents.  This doesn’t help the economy or the citizens of the Old North State.  Carolina Journal wrote the following:

Shifting to Medicaid, Riley details existing problems linked to that joint federal-state program. The federal health care law does nothing to fix those problems, he said. "Rather than leave states to reform their Medicaid programs to meet new economic challenges, the federal government simply shifted more money into a system that was unsustainable," he said. "The 2010 federal law essentially doubles down on Medicaid by expanding eligibility."

Medicaid expansion would place additional burdens on North Carolina to maintain its current eligibility standards, while opening the door to a total enrollment of more than 2.2 million people, or more than 20 percent of the state's population. Federal budget concerns also raise questions about the total bill for state taxpayers in future years, Riley said.

Existing problems are mismanagement and fraud. 

RALEIGH — North Carolina’s Medicaid program is in a major state of disarray, costing taxpayers “hundreds of millions of dollars” in mismanagement, a blistering state audit revealed.

The Medicaid program deliberately violates General Assembly directives and potentially state statutes, the audit said. The program has a talent deficit in personnel capable of preparing accurate budgets or understanding the data with which they must work to administer $36 million in services daily to 1.5 million participants, according to the audit.

Gov. Pat McCrory, a Republican, said the fiscal, accounting, contractual, and operational tentacles of the Medicaid calamity reinforces his belief that its rolls should not be expanded under Obamacare, although the issue is still being explored for a later decision.

Here are some of the numbers as explained by State Auditor Beth Wood and Secretary Aldona Wos:

“The potential savings through improved administration and better management of the program could be enormous for our citizens, perhaps reaching hundreds of millions of dollars,” Wood said.

“For the last three fiscal years, the state of North Carolina has exceeded the certified budget in the Medicaid spending area of over $1.4 billion in each year,” Wood said. Of that, she said, $375 million each year is state dollars; the balance is federal funds.

The Division of Medical Assistance, which is responsible for Medicaid, is incapable of forecasting multi-year budgets or providing accurate information on the current budget year, according to audit findings.

As an example, Wood said, the division provided forecasts for only five of the 14 categories in which Medicaid money is spent.

Two categories had more than $190 million in shortfalls combined due to poor budgeting, Wood said. Another had an unanticipated $127 million surplus.

“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.

“Cost overruns will not be tolerated and will not be acceptable. There’s a budget for a reason,” Wos said, “and we must adhere to this budget.”

The Medicaid budget is about $13 billion annually, of which $3 billion is state funding. By contrast, Wood said, the rest of the state's General Fund budget is $18 billion.

A major reason for the shoddy Medicaid budget projections is personnel-related.

“We don’t have the talent in order to provide the right data in our forecasting in order to create proper budgets,” Wos said.

If North Carolina is having these kinds of problems with Medicaid, it makes you wonder about the other states, and are they addressing fraud, waste and abuse.  Something tells me they’re not.

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