Hospitals overbilled state plan, audit finds

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Hospitals owe state $2.5 million for overcharges

Six hospitals owe the state more than $2.5 million as the result of overcharges to the State Health Plan, according to preliminary audit results that the plan released today.

The six hospitals include Johnston Memorial Hospital, which owes $229,675, a health plan release said. Wayne Memorial Hospital in Goldsboro owes the most, at just over $1 million.

The audit may find more overcharges at other hospitals. Health plan officials say that 55 hospitals remain under review for possible overcharges, including the state's psychiatric hospitals in Raleigh, Butner, Morganton and Goldsboro. Thirty hospitals have been found to have properly charged the health plan, which serves roughly 670,000 state employees, teachers and retirees.

Health plan examines payments

State Health Plan officials are auditing payments to 15 North Carolina hospitals after learning they had not notified the plan of rate changes going as far back as 2003.

The audit is to determine whether the hospitals overcharged for out- patient medical services. The plan had negotiated contracts with the hospitals that set rates for those services, and it required the hospitals to tell the plan if rates changed. If those rates had increased beyond the contract terms, the health plan, which is supported by taxpayers, may have overpaid hospitals for their services

"The really important matter," said Lacey Barnes, the State Health Plan's deputy executive administrator, "is if they didn't tell us and it resulted in an overpayment. And that's what we don't know."

DHHS lax on oversight, auditor finds

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CORRECTION

A July 17 article about a state audit of the Department of Health and Human Services' monitoring of key contractors incorrectly said that the state ordered ValueOptions Inc., a private contractor, to remove fiscal controls from a computer program intended to prevent Medicaid fraud. The audit actually referred to EDS, another state contractor.

Health Plan's trouble long kept quiet

Administrators of the struggling State Health Plan did not inform legislators for at least four months last year about multimillion-dollar financial problems, the state auditor's office reported Thursday.

Administrators of the plan -- which insures 667,000 teachers, state employees and retirees -- underestimated both revenues and claim expenses, creating a nearly $80 million loss last year, the audit said.

Auditors criticized the plan's leaders, who have been replaced, for agreeing to a contract with Blue Cross Blue Shield of North Carolina that gave the insurance company no incentive to contain costs and that was not reviewed by a contract lawyer or contract professional.

Patient buried before Cherry filed report to pathologist

Administrators at a troubled state mental hospital in Goldsboro failed to provide their report of a recent patient death to a pathologist, as required.

A law enacted in July, as well as administrative rules approved in March, mandate that all state institution deaths be reported to a local medical examiner for review. The body is not to be moved without the approval of a pathologist, and the hospital is supposed to share its written report within three days.

It took nearly three months for Cherry Hospital to send its report on the Oct. 27 death of Kenneth Gore, 43.