Dome: Legislators want strict review of health contracts

From staff reportsAugust 15, 2012 

Legislators want a new look at how the state reviews and approves contracts after a state audit of four Health and Human Services contracts found problems with three of them.

Contracts with IBM, SAS and Public Consulting Group, which provide computer software or services to identify Medicaid provider fraud, recipient fraud, or provider overpayments, had problems, the audit found.

Legislators said Wednesday they didn’t like the terms of the initial contract with IBM, which paid the company based on a percentage of Medicaid payments that the software indicated were improper and should be recovered.

“I’m astonished that we would contract with any vendor in any department to pay that vendor a contingency fee based upon the results of work other than the vendor’s product,” said Sen. Dan Clodfelter, a Charlotte Democrat. “I’ve never heard of such a thing.”

Michael Watson, state Medicaid director, defended the IBM and SAS contracts, saying they would yield great future benefits.

“I think part of what we’re learning here is that there is often a very significant lag between your initial investment in this extraordinary high-tech technology and getting the outcomes that you’re looking for,” he said.

The SAS program was not in place during the audit period but has since provided the state with some leads on potential fraud, state officials said.

State Auditor Beth Wood said her office decided to check the contracts after receiving calls from providers about Public Consulting Group. Providers were telling her office that PCG was finding problems with overpayments where there weren’t any. She gave an example of a provider told of an overpayment of $1.34 million. On review, the amount dropped to $22,093.

Watson said the department is stepping up its oversight of PCG.

The PCG contract is also based on contingency fees.

The fees are different depending on the task. One of PCG’s jobs is to act as the state’s Recovery Audit Contractor.

The Recovery Audit Contractor program is required by federal law, and the feds require contingency-based payments, said Chrissy Pearson, senior adviser to DHHS Acting Secretary Al Delia.

McCrory will skip convention

GOP gubernatorial candidate Pat McCrory will skip the Republican convention this month in Tampa, Fla.

Spokesman Brian Nick said McCrory wanted to drop in on the convention for a day but had too many commitments in the western part of the state and couldn’t make it work.

Candidates face off in forum

The candidates in the Secretary of State race will face off in a forum next week in Raleigh.

The Aug. 23 event is hosted by the N.C. Center for Voter Education and the League of Women Voters. The audience can ask questions, and others will come through Facebook and email. It will take place at the Unitarian Universalist church on Wade Avenue.

Democratic incumbent Elaine Marshall faces Republican newcomer Ed Goodwin in the campaign.

Romney names farm advisers

State GOP Chairman Robin Hayes, former U.S. Sen. Lauch Faircloth, whose career included hog farming in Sampson County before he entered politics, and state Agriculture Commissioner Steve Troxler are the North Carolinians who have been named by Republican presidential candidate Mitt Romney to his advisory board of Farmers and Ranchers for Romney.

Staff writers Lynn Bonner, John Frank and Rob Christensen

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