DHHS Secretary Wos and a $60 million budget hole

June 5, 2014 

The following editorial appeared in The Charlotte Observer:

In case you haven’t heard, Aldona Wos is brilliant. That’s what Gov. Pat McCrory says about North Carolina’s Health and Human Services secretary, and he has been stubbornly praiseful despite a startling run of DHHS gaffes and mismanagement.

Well, now we apparently know why. It’s because of the brilliance of a DHHS plan – championed by Wos – that would use some clever taxation and maneuvering around federal rules to bring $60 million of extra Medicaid money into the N.C. budget. As it turns out, federal regulators have decided they don’t want to be tricked out of their Medicaid money. But let’s get back to the brilliance.

Here’s how the plan would work: North Carolina would tax 10 managed-care organizations that provide behavioral health services to mentally ill or developmentally disabled Medicaid recipients. Those “assessments” would bring in $90 million for the state and allow it to draw down an additional $60 million in matching federal funds. The state would then give the $90 million back to the managed-care organizations and pocket the $60 million from the feds. Budget woes, solved.

But if all of that sounds a little like money laundering, well, yes. So DHHS officials shouldn’t have been surprised when their creative accounting – along with a similar gimmick from Pennsylvania – was rejected by the feds last week.

And yet, they were surprised. Sen. Ralph Hise of Spruce Pine says DHHS officials told him last week that the feds would approve the plan, which is why state senators accounted for the $60 million in their new state budget proposal. Even worse: While the concept behind the tax ploy had been floating around DHHS for a couple years – predating even Wos – the secretary forgot to ask federal regulators what they thought of it until the last minute.

Needless to say, lawmakers are angry. State Budget Director Art Pope seemed annoyed, too, saying he “was relying on DHHS officials” and their consultants when counting on the $60 million.

All of which is decidedly not surprising to anyone who has observed DHHS since Wos was appointed secretary in late 2012. From grossly overpaying personnel to stumbling through a food stamp backlog to being the only state in the country to halt food and formula to pregnant women and new moms (at least until someone noticed), Wos has displayed a historic and almost comic incompetence.

Still, she remains employed at her now infamous $1 per year salary. We can only hope that state lawmakers have come around to seeing how that’s not a bargain at all for North Carolina. Maybe they can persuade the governor to give this most critical N.C. department the new leader it deserves. That wouldn’t be a brilliant move, but at this point, we’ll settle for belated.

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