More Democratic mismanagement costing taxpayers hundreds of millions of dollars

Lynn Bonner of the News & Observer reports that because of accounting errors at DHHS the state now owes the federal government $300 million for taking too much in public hospital services.

Senate Republican Leader Phil Berger responds to Bonner about the mistake:

Senate Minority Leader Phil Berger, an Eden Republican, said the state should have been taking such care with its accounts all along.

“You would think there would be internal audit procedures and internal review procedures,” he said. “This is just one more indication that our state is not being run very well.”

State owes $300 million to feds

By Lynn Bonner

News & Observer

It took the state months to notice that one of its Medicaid funds was flush with money, but employees couldn’t figure out why.Now, because of a huge accounting error, North Carolina must repay the federal government about $300 million for taking too much for public hospital services. The state will pay back $200 million by the end of this month, and will repay the rest during the next 11 months, according to the state Department of Health and Human Services.

Medicaid is the federal government’s health insurance program for the poor and disabled. The state received about $7.5 billion in federal Medicaid money last year. Though the federal government pays most of the costs, the state picks up about one-third of the expenses.

The mistake was triggered in November, when a state worker sent the department’s controller’s office incorrect information on how much money hospitals should take from the federal government and how much they should take from the state account, said Lanier Cansler, DHHS secretary.

State workers noticed the Medicaid account was out of whack about March, but couldn’t find the source of the problem, Cansler said. The state discovered the mistake at the end of June as it prepared to make more changes to Medicaid billing formulas, and told the federal government about it.

The $200 million can be repaid almost immediately because the state has unspent money in the account hospitals were supposed to be tapping, Cansler said.

The $300 million mistake comes at a sensitive time for Gov. Beverly Perdue, as she pushes for tax increases to cover a budget that is nearly a month overdue. Earlier this week, the governor upended budget negotiations, saying she could not support a budget with an income tax surcharge and a drop in per pupil education spending.

In a statement, Perdue said she told Cansler and the state’s new Medicaid director, Craigan L. Gray, to make correcting the problem a top priority. She said she wants a report on disciplinary actions.

“While this problem may have originated prior to my term as Governor, the circumstances under which it was made and perpetuated are simply unacceptable,” she said.

Perdue said Friday she ordered DHHS to tell the state budget office if its Medicaid accounts are more than 2 percent off projections and submit a report explaining the cause.

This isn’t the first time the state has lost the handle on Medicaid payments. DHHS was criticized in a recent legislative report for losing track of how much Medicaid money it was spending on a community mental health program that peaked at more than $100 million a month soon after it started. …

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