N.C. Medicaid Audit
February 1, 2013 4 Comments
The North Carolina State Auditor released a report yesterday showing cost overruns and mismanagement in the state’s Medicaid program. Interestingly, I found that none of the media outlets writing about the story linked to a copy of the actual audit.
The bottom line is that N.C. Medicaid spent ~6.3% of its total cost on administrative costs; a range of states with similar (in terms of total dollars) spent between 1.73%-5.44%, with the average of the 10 comparison states being 4.56% of the total spent on Administration (see table on page 18 of report if you want more details).
The report notes that there are tremendous differences in how states organize and manage their Medicaid administrative functions (like eligibility determination, benefit design and coverage, appeals, contracting, etc.) with obvious differences in cost. This is not the sort of list you want to be at the top of, so there is obviously room to improve things.
I will read this more fully, but the central issue looks to me to be that the Division of Medicaid Assistance (Medicaid) was only responsible for ~one-third of the administrative charges/costs that accrued to the State’s Medicaid program, meaning that other portions of the state HHS were (rightly in concept) incurring Medicaid-related administrative charges, but that the amounts are too high and need to be better controlled and coordinated so as not to waste money.
Medicaid has new leadership in Carol Steckel. Here is an interview with her in 2009 talking about the role of Medicaid when she was the Medicaid director in Alabama and more recently she had the same job in Louisiana. She has a great deal of Medicaid experience at both the state and federal level (she used to work for the federal office of Medicare and Medicaid, now called CMS) and her arrival should hopefully bring some insights into improving the efficiency of North Carolina’s program. Update: here is a slide deck authored by Carol Steckel I found on the web on Louisiana’s recent Medicaid reforms.
A last plea on Medicaid. It is not one program, but at least 3. It provides health insurance for:
- low income persons, now predominantly children, pregnant women and parents due to current eligibility rules. This is the part of the program that could be expanded by the ACA by moving toward a simple standard of everyone with income below 133% of poverty level. Most of the these folks are relatively well and young.
- dual eligible persons who have Medicare because they are old, and Medicaid because they are disabled and/or because they have spent down and become poor by paying for nursing home care (your responsibility until you eradicate all your expenses, then Medicaid will pay until you die). Most of these folks are incredibly sick and costly.
- Long term disabled. These are among the most vulnerable members in our society and could range from people with spinal cord injuries to spina bifida, to mental disabilities.