News: Quick Takes

Audit faults DHHS for lack of oversight involving Medicaid money

N.C. Health and Human Services Secretary Mandy Cohen, during a May 2020 COVID-19 briefing. (Pool photo)
N.C. Health and Human Services Secretary Mandy Cohen, during a May 2020 COVID-19 briefing. (Pool photo)

The N.C. Department of Health and Human Services failed to adequately monitor Medicaid money payouts, potentially putting some $12.1 billion at risk, according to an audit report released Monday.

State Auditor Beth Wood also found a lack of oversight of several other federal programs administered by DHHS, even as Gov. Roy Cooper lobbies for the department to take on billions more in spending through Medicaid expansion.

The audit blames Secretary Dr. Mandy Cohen’s department for a lack of oversight, identifying “significant deficiencies in internal control over compliance,” according to the report. 

DHHS failed to screen recipients of Medicaid and Children’s Health Insurance Program money to determine if they were licensed or credentialed. It also failed to properly run background checks on recipients, according to the report. In nearly 20% of cases, auditors found no record of any credential check. In both cases, federal guidelines required them to do so.

The department also overpaid Medicaid providers due to “clerical errors and inadequate documentation,” the audit states.

The state health department blamed a computer system it implemented in 2017 for the failure to check credentials.

The state manages $12.1 billion in Medicaid dollars and about $632 million in children’s health insurance money.

Cooper and Cohen, both Democrats, have pushed the General Assembly to approve a federal plan to expand the Medicaid program, which would send some $4 billion more per year through DHHS. Expansion would also cost the state roughly $6 billion over the next decade, though other states that expanded Medicaid have seen expenses balloon well over projections.

Among other findings in the audit:

  • DHHS failed to check whether counties receiving money to reunify families through the federal MaryLee Allen Promoting Safe and Stable Families Program, meaning roughly $3.4 million in money may not have gone to its intended use, the audit states.
  • The department improperly distributed thousands of dollars in adoption assistance money to ineligible families. 
  • DHHS does not have monitoring policies for several of its contractors overseeing Medicaid procedures, meaning the state can’t determine whether requests are properly approved or denied.