Feds Order North Carolina DHHS To Repay $300 Mill For Overbilling Medicaid...HC Reform Can't Wait!

Charlotte Observer, MSNBC-----

RALEIGH - North Carolina will repay about $300 million to the Federal government because of a Medicaid billing error, but it will affect neither the state budget nor patient treatment, NC Health and Human Services Secretary Lanier Cansler said Friday.

The accounting mistake began last November when annual changes were made to the share the federal government pays for Medicaid, Cansler said. The error caused more public hospital payments to be billed to the Centers for Medicare and Medicaid Services and less to the state's account.

Most of the money will be paid back by the end of the month.

"The safeguards that were in place to prevent this type of error were inadequate," Cansler said in a prepared statement. "There were breakdowns in communication and oversight, and corrective actions will be taken quickly."

Gov. Beverly Perdue said late Friday she had told the department to alert the state budget office in the future when federal- or state-funded payments exceed 2 percent of projections and to submit a report giving a reason. Such a process would have caught the problem sooner, she said.

"The circumstances under which it was made and perpetuated are simply unacceptable," Perdue said. "I am moving quickly to get to the bottom of this situation and am taking steps to fix it."

Cansler said he was alerted to the mistake last week and worked out an agreement Wednesday with Centers for Medicare and Medicaid Services to pay back $200 million by July 31 and the rest in payments through the fiscal year.

Most of the state money was available immediately, so it won't worsen the state's already weak fiscal situation, Cansler said.

"We were unknowingly borrowing the money from the federal government," Cansler said in an interview.

Medicaid, the government health insurance program for low-income children, older adults and the disabled, received $7.5 billion from the federal government this past year for Medicaid. The state is slated to spend more than $2 billion this year on the agency that operated Medicaid.

When asked if remedial actions would include personnel changes, Cansler said any changes would be decided upon in the next few days.

The overpayment is the latest in a series of fiscal errors or overspending Medicaid in North Carolina this decade.

In 2006, the state agreed to reimburse the Federal government $151 million for Medicaid over payments made in error to hospitals as part of a program for poor and uninsured patients.

Earlier this month, a legislative watchdog agency determined North Carolina could have saved itself up to $226 million — up to $635 million when the federal portion is counted — by containing costs sooner in a Medicaid program that provides non-medical care for mental health patients living at home.



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Sources: Charlotte Observer, MSNBC, Google Maps