Aldona Wos, the secretary of the state Department of Health and Human Services, is resigning after a tenure that moved the agency to financial stability but which was marked by persistent questions from lawmakers about its operations.
Rick Brajer of Raleigh, a former business executive with no government experience, will take the job running the 17,000-employee agency.
Gov. Pat McCrory choked up as he made the announcement at a Wednesday news conference at the Executive Mansion. Wos at one point handed him a tissue. Soon, both were in tears as the governor presented her with the Order of the Long Leaf Pine.
McCrory said Wos had told him about a month ago of her plans. She will remain in the position until Aug. 14.
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Brajer will start Aug. 17 and will be paid $140,000 a year.
McCrory said Wos exceeded his expectations in overseeing the largest state agency and said she brought “incredible passion” to the job.
Wos, a physician, former U.S. ambassador and wealthy political fundraiser from Greensboro, has had a rocky tenure at the sprawling agency that spends billions on health care and other health services for North Carolinians.
The department that Wos used to call “broken” now claims to have controlled the state’s Medicaid budget. The announcement of Wos’ resignation comes a day after DHHS announced the Medicaid budget ended the year with nearly $131 million in cash on hand. In some years, the agency’s cash shortages added pressure to lawmakers’ decisions on the state budget.
Brajer said he looked forward to becoming part of McCrory’s Cabinet and executive staff “to create a results-oriented and citizen-centered government.”
“By faith I believe it will be demonstrating God’s love in action as we continue to improve the health of our most vulnerable citizens,” he said.
Wos described nearly three years of working away from her family and said that now “it’s simply time to go home.”
Wos earned a reputation as a hardworking, exacting boss in a department that has seen significant turnover of high-ranking staff. For example, the office is on its third Medicaid director in three years. A former chief of staff who worked for Wos for one month in 2013 took a $37,000 severance payment upon leaving.
Wos was the target of early criticism for hiring decisions that included paying $85,000 and $87,000 to then 24-year-olds who took positions on her leadership team after working for McCrory.
She also paid an executive on leave from her husband’s company $310,000 for 11 months of work as her senior adviser.
Wos defended that decision in an email to legislators, and she said in a television interview that the 24-year-olds were worth more than they were earning.
DHHS also signed a no-bid contract with a company that essentially took over managing Medicaid finances. Alvarez & Marsal’s contract grew from an initial $3.2 million to more than $9 million, and the company’s duties expanded.
Legislative Democrats called for her resignation several times since she was appointed, including when the department sent 50,000 children’s insurance cards to incorrect addresses.
Problems with new public benefits software, called NC FAST, neared a crisis in 2014 because thousands of households that qualified for food stamps were not receiving them. The software problems put pressure on food banks and brought threatened sanctions from the federal government.
Wos decided to push ahead with turning on a separate Medicaid claims payment system, known as NCTracks, which in the first year drew complaints from hospitals, doctors, and medical equipment companies that had problems getting paid. The system earned federal certification earlier this year.
Early in her tenure, Wos took on the task of making major changes in how doctors and hospitals care for people using Medicaid and how the state pays for those medical services. Her position shifted over time from promoting Medicaid managed care, which could include contracts with commercial insurance companies, to a system that would have hospitals and doctors responsible for controlling costs while improving patient health.
While the state House has largely agreed with that approach, Senate Republicans want to open the state Medicaid program to privatization.
At Wednesday’s news conference, Wos talked of arriving at her office on the Dorothea Dix campus before others as the sun was rising and working with her staff late into the night. She praised their work. Speaking to DHHS staffers, she urged them to “not give up” and continue the agency’s work to improve lives.
“The improvement process at times has been truly painful and has been much slower than I would have desired,” Wos said. But the department has made significant progress in improving operations with McCrory's support, she said.
As he has since he appointed her, McCrory defended Wos and praised her intellect and dedication.
“When I called her at 10 in the evening, she was at work,” McCrory said. He praised her for strengthening the Medicaid program and for being “the leading voice for Medicaid reform that puts patients first.”
Wos shouldered blame for problems that weren’t hers, McCrory said, referring to NCTracks and NC FAST.
Wos told reporters after the official speeches that she would not have done anything differently.
Wos had a difficult relationship with leading Senate Republicans who frequently challenged her in public meetings. Sen. Tommy Tucker, a Waxhaw Republican who frequently questioned Wos’ decisions and requests – including her employee salary and contract decsions – was in the audience with other legislators at the Executive Mansion.
At one point, Wos stepped away from the lectern to hug Tucker.
Her departure comes at a time when the Medicaid program, the government health insurance program for the poor, elderly and disabled, may be facing major changes.
Senate leaders want a restructuring that would take Medicaid away from DHHS and give oversight to an appointed board.
Sen. Ralph Hise, a Republican from Spruce Pines and critic of the Medicaid office, said, “Secretary Wos has the most difficult job in all of state government.”
“The Department of Health and Human Services has been a huge mess for a long time,” he said. “There’s some positives that have been made over the last two and a half years, but I guarantee you there’s as long way we’ve got left to go.”
Brajer was until January CEO of ProNerve in Denver. A Tennessee company announced in February it had acquired ProNerve, a few days after the Denver company started bankruptcy proceedings.
Brajer was president and CEO of the diagnostic company LipoScience in the Triangle, having previously worked for the medical device and technology company Becton Dickinson. He is a graduate of the Stanford University School of Business.
Staff writer Craig Jarvis contributed.
Meet Rick Brajer
CEO of Pro-Nerve LLC – 2014-2015. The company provides monitoring services to health systems, hospitals and ambulatory surgical centers, along with equipment and disposable supplies. It is based in Colorado. In February, a Tennessee company announced it had acquired ProNerve after it started bankruptcy proceedings. Brajer said he left in January.
President and CEO of LipoScience Inc. – February 2003-August 2013. The Raleigh company offers personalized diagnostic tests. It was acquired by LabCorp in November.
President, BD Diagnostics and other roles at Becton Dickinson – 1990-2002. The company includes diabetes medical devices and diagnostic systems.
Management consultant with McKinsey & Company – 1987-1990. Dallas.
Product development engineer with Procter & Gamble – 1983-1985. Cincinnati.
Education: Bachelor’s degree in chemical engineering from Purdue University. MBS degree from the Stanford Graduate School of Business.
Personal: He and his wife have three sons. He is an avid runner. He has been chairman of Habitat for Humanity of Wake County, a member of the Ravenscroft Board of Trustees, and board of directors of Communities in Schools of Wake County.