Legislators wanted answers. What they got was more questions.
And backers of Medicaid expansion may have found a new opportunity.
An October report revealed state Department of Health and Human Services Secretary Aldona Wos and then-state Medicaid Director Carol Steckel deleted relevant portions of a department assessment of state Auditor Beth Wood’s report on the state’s administration of Medicaid, leading legislators to ask their own staff for clarity.
The assessment was completed before Gov. Pat McCrory and his staff assumed their positions, and, in total, didn’t fit with the policy leanings of the new guard.
At a meeting Nov. 19 of the Joint Legislative Oversight Committee on Health and Human Services, members of the General Assembly’s Fiscal Research Division delivered their report, which runs counter to statements by Wos and Gov. Pat McCrory since January.
McCrory, Wood and Wos – armed with the edited report – held a news conference Jan. 31 touting the findings and that a fix needed to be made to control administrative spending in Medicaid, which McCrory calls “broken.”
The fiscal research staff determined Wood and Wos presented the data in a poor fashion that didn’t accurately show what was going on in North Carolina, nor in comparisons with other states.
“The report really captures total cost – it’s really not a report intended for apples-to-apples comparisons for each category within that report,” FRD member Steve Owen said to the committee. “Specifically, as managed care has grown across the nation and states, this report has become less comparable….”
Wood told the oversight committee that managed care wasn’t the focus of her audit.
Instead of administrative spending at an inordinately higher rate than similar states, the FRD analysis pegged state costs as 6.4 percent of total costs – less than Tennessee, Georgia, Arizona, New Jersey, Michigan and Massachusetts. Illinois and Missouri came in at 6.07 percent and 5.36 percent, respectively.
Administrative costs are defined as “traditional costs for provider enrollment, contracting, claims adjudication and appeals,” along with a certain amount for profit.
Don Taylor, an associate professor of public policy at Duke, wrote on his blog Monday the Wood/Wos report contained a significant error as to assumptions for where money went.
“The source of the earlier error was that amounts being paid to managed care companies were being to assumed to go 100 percent toward patient care, when in fact managed care companies used some of that for administrative costs (as they reasonably could be expected to do), and a portion of the money would go to profit (as is reasonable to expect; why else would they being doing it),” Taylor wrote.
McCrory’s press staff has commented that the numbers dispute is more of a po-tay-to, pah-tah-to argument, and the governor’s earlier position on Medicaid reform remains intact. McCrory said Monday on WFAE in Charlotte that he wants to take money saved from Medicaid reform and use it to give teachers a pay raise.
Sen. Louis Pate, R-Wayne, who is a member of the oversight committee and the governor’s Medicaid reform panel, said teacher pay was negatively affected by problems with Medicaid earlier this year.
“We had to make up a lot of money last year to fill the void, and that’s why we were not able to make any pay raises for teachers and state employees because there was a shortfall of about a billion dollars that we had to come up with,” Pate said.
He added that he agreed the state’s Medicaid program is still in trouble.
But, arguments about high costs were also used earlier this year by McCrory and legislators not to expand Medicaid as part of the Affordable Care Act, commonly known as Obamacare.
The FRD’s Susan Jacobs told the oversight committee that after their analysis, there appeared to be “a significant amount of funds available for growth.”
Taylor wrote the new numbers invalidate the earlier argument against expanding Medicaid.
“North Carolina doesn’t have higher than expected administrative costs; they are actually lower than those used for comparison last January,” Taylor wrote. “This is not a reason to not expand Medicaid in North Carolina.”
Wes Wolfe can be reached at 252-559-1075 and Wes.Wolfe@Kinston.com. Follow him on Twitter @WolfeReports.