The state Medicaid office owes medical providers nearly two years worth of back payments for poor, elderly patients, an expense that will increase past and future costs, according to the state budget office.
The state has not been properly paying providers for patients who use both Medicare, the federal government health insurance for the elderly, and Medicaid, the government health insurance for the poor. Providers have been complaining since the state first started using a new Medicaid payment system called NCTracks in July 2013 that they were being underpaid, but the state did not start making those payments until March of this year. For people who use both forms of insurance, Medicaid pays deductibles and copayments. Both the state and federal governments pay Medicaid bills.
State budget director Lee Roberts said the state does not know how much it will cost to make all the overdue payments or how much future expenses will rise.
“I don’t anticipate that we’ll need additional appropriations this fiscal year,” Roberts said. “Beyond that, I am wary of making predictions on Medicaid without really good data.”
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Legislators were warned about additional costs, but the information came with no details, said Sen. Ralph Hise, a Spruce Pine Republican who co-authors the state health and human services budget.
“This is beyond frustrating,” he said. Legislators were told that they would be given best-case and worst-case scenarios, Hise said, but as of last week, no specific figures were attached.
The need to catch up with nearly two years worth of Medicaid expenses runs counter to the state Health and Human Services department’s narrative that it has cleaned up longstanding problems in Medicaid.
Hise said Senate Republicans were always skeptical of DHHS’s public pronouncements about its Medicaid operations. This newest problem illustrates the need for structural changes at the agency, he said.
Senate Republicans want to disconnect the state Medicaid office from direct DHHS oversight. The Senate pushed last year to have an independent board run Medicaid and is likely to renew that call this year.
DHHS was contacted last week for this report but left all explanations to Roberts.
This year’s state budget includes a $186 million contingency fund for Medicaid, but DHHS cannot spend it without the legislature’s permission.
Roberts said the federal government issued the state instructions in late September or early October of last year on how Medicaid payments should be made for health care provided to poor, elderly people. The state told the company running the computerized bill-payment system, Computer Sciences Corp., to program the payments into the system, and the changes kicked in in March, Roberts said.
“It’s standard for a change to take a while to be implemented,” he said.
The state is analyzing the March payment to project past and future expenses, Roberts said.