With $2 billion in cost overruns the past four years, Medicaid continues to be North Carolina’s most volatile political conundrum, and now unanswered questions about its spending and growth threaten to delay passage of 2014-15 state budget adjustments before next Monday’s deadline.
Things got nasty in a Senate Appropriations Committee meeting last week, and one is left to wonder whether Gov. Pat McCrory and the state Department of Health and Human Services squandered political capital by snubbing budget writers struggling with alarming lapses in vital Medicaid data.
Medicaid “is the linchpin” to writing the 2014-15 budget, said an irritated Sen. Bob Rucho, R-Mecklenburg. “Would someone explain to me why we don’t have [Office of State Budget and Management] or staff people from DHHS here to help us get to an answer so that we can move this budget forward?”
If not a prairie fire, the meeting at least exposed the slow burn of senators handcuffed by a dearth of crucial budget numbers from DHHS. Capital press corps reporters instinctively asked one of their most oft-repeated questions: Is DHHS Secretary Aldona Wos to blame for yet another major Medicaid predicament?
Due to significant backlogs, DHHS cannot provide accurate Medicaid enrollment numbers, valid claims data, and categories into which new enrollees are entered. Without precise, up-to-date information for this fiscal year, drafting an accurate budget for 2014-15 is impossible.
That’s a tough corner to be backed into for McCrory and Wos, who have made Medicaid budget predictability a holy grail.
The exasperation of Sen. Tom Apodaca, R-Henderson, typified the level of lawmaker frustration.
“If push comes to shove,” he said, “we can always issue subpoenas and have the numbers come to us. So let’s not take that off the table.”
The irritability in Senate Appropriations was bipartisan.
“Will we ever know what we need to know?” Sen. Angela Bryant, D-Nash, asked incredulously. “Do we have to be completely at the mercy of executive branch agencies on an issue like this that is so critical to what we do?”
Senate leader Phil Berger, R-Rockingham, explained, in measured but heart-attack serious tones, why there is an elevated sense of urgency, and why he had wanted someone from the budget office at the Appropriations Committee meeting to explain Medicaid numbers that have swung from wildly varying to unaccounted for.
“Our feeling is we need to reach some understanding on the Medicaid number before we can realistically start talking about most of the other things,” including teacher pay raises and pay hikes for state workers, Berger said.
And then there was this jaw-dropping exchange between Sen. Joel Ford, D-Mecklenburg, and Susan Jacobs of the legislative Fiscal Research Division.
“Based upon the uncertainty and the lack of data, how can we say for certain that people are not being overpaid or underpaid?” Ford asked.
“We probably can’t say that,” responded Jacobs. She also dropped a bombshell that it could be “probably late next year” before all necessary numbers are completely and accurately obtained.
“To me that is a very disturbing scenario where we are taking taxpayer money with good intentions, but with no verification that we’re doing the right thing because of a broken system,” Ford said.
Whether he realized it, Ford’s characterization of Medicaid as a broken system oozed irony.
In one of their first official acts upon assuming office in January 2013, McCrory and Health and Human Services Secretary Aldona Wos lambasted the state’s Medicaid program as a chaotic, broken system. Eighteen months later and holding Swiss-cheese Medicaid reports, state senators are grumbling that the agency’s disarray persists.
Pressed by reporters, Berger stopped short of saying he has lost confidence in Wos’ leadership.
“I’ll leave it to others as to why they’re not able to provide that information,” he said, but he insisted this budgeting fiasco shows the need to remove Medicaid from Wos’ control and make it a standalone agency.
The Senate budget calls for $88 million more in Medicaid spending in 2014-15 than the House version. Berger said the Senate used higher, worst-case-scenario numbers.
Berger and his counterparts rightly expressed no appetite for once again using rosy projections only to find out halfway through the budget year that there is a whopping shortfall.
To make matters worse, Senate Majority Leader Harry Brown, R-Onslow, said Fiscal Research staff isn’t even confident the worst-case numbers are sufficiently high. “I think that’s important to make sure everyone understands it.”
Sen. Louis Pate, R-Wayne, co-chairman of the Senate Health and Human Services Appropriations Subcommittee, agreed with frustrated Fiscal Research staff that much of the problem with missing data stems from NC Tracks, the new but deeply flawed Medicaid billing system.
But he was quick to note that Republicans inherited the woefully underperforming computer system that was in development for years under Democratic administrations.
“I don’t know if they made up-to-date adjustments as they went along, and we don’t know if it was tested properly before it went live,” Pate said. Others, including State Auditor Beth Wood, warned last year that the nearly half-billion-dollar system was not ready to launch.
Wos lost control and never regained the upper hand in messaging after she defiantly promised she was going to drag the long-beleaguered NC Tracks over the July 1 finish line, and declared it sound when she did.
The bravado and exuberant can-do proclamations might have seemed politically appropriate for a new administration seeking to position itself as an intrepid change agent.
But Wos would have been wise to have tempered her rookie remarks with caveats about the huge challenges left behind by previous Democratic administrations, downplayed expectations, and more candidly acknowledged what IT skeptics already knew — the system was going to encounter plenty of rollout problems that would require a long time to correct.
Pate was among those declaring that the current Medicaid budgeting calamity further demonstrates the “critical necessity for reorganization” of the agency. But restructuring has been hampered by the unsteadiness of tectonic policy shifts.
Pate is among senators who continue to oppose the latest reform plan favored by McCrory and Wos, and now in bill form in the House. He said the proposal only tinkers around the edges of budget predictability and restraint.
This latest iteration is an accountable care model comprising networks of doctors and hospitals. It was rolled out after the administration’s stunning U-turn from months of championing full-risk managed care, and scoring a coup in recruiting Carol Steckel, a highly sought, nationally renowned expert on Medicaid managed care.
Steckel, former head of the National Association of State Medicaid Directors, left her $210,000-a-year job in North Carolina last September after only eight months working for Wos.
Whether there was a back-story to the swift departure of a highly heralded Medicaid reformer, much like what this year’s Medicaid numbers are, remains a guessing game.
Dan Way (@danway_carolina) is an associate editor of Carolina Journal.