Millions of dollars given to non-qualified Medicaid providers, NC state audit says

RALEIGH, N.C. (WNCN)– Scores of Medicaid patients are at risk and millions of dollars were given to non-qualified providers– that’s the conclusion of a scathing report by the state auditor. 

The state of North Carolina spends $14 billion a year on Medicaid services to provide over 2 million people with care they couldn’t normally afford. It’s all overseen by the NC Department of Health and Human Services. 

An audit from State Auditor Beth Wood’s office says NCDHHS failed to properly check qualifications of providers and sent $15 million in payments to providers who shouldn’t have gotten the money.  

Auditor Beth Wood said providers are supposed to be monitored by DHHS.

“There are disciplinary checks looking to see if your license was suspended, or did you lose your accreditation,” she said. 

DHHS was supposed to do that checking electronically using two so-called “web crawlers” which would search for red flags about license issues, but she said both programs failed to operate correctly and agency never knew it. 

“They didn’t test their system to find out it wasn’t working,” she said. 

Over 27,000 providers needed to be recertified and Wood’s audit pulled just a tiny sample of 191 to see what was happening with them. The results were stunning. 

“Of the 191 we checked, 185 had not been recertified,” she said. 

She said one provider alone in that group which hadn’t been recertified was paid $11.2 million by the state. 

Wood said what really worries her is that there are scores of other providers in the larger group of 27,000 needing reverification that are in the same position as the 185 in the sample.  

“You haven’t identified all the individuals,” she said. “That is where the problem lies, all those who didn’t get caught but are still practicing. 

In its response to the audit, which was included in Wood’s report,  DHHS said it said it “agreed with the findings” and is going to find ways to remedy the problem. 

Consumer investigator Steve Sbraccia asked Wood what happens with the money wrongly paid out. 

“For the $15 million we’ve identified, the DHHS can go back and claim the money,” she said. 

CBS 17 had questions for DHHS about the problems presented in the audit. 

Sbraccia sent an email wanting to know if their agency will seek return of the funds as well as whether the agency will seek criminal charges be brought against those who were identified in the audit.  

DHHS responded  saying it would be seeking reimbursement of the $15 million and will ask the state attorney general to seek criminal complaints against individuals who have credible evidence of fraud.

In the meantime,  the auditor says this isn’t over. She says her people are going back in a year to see if the problems were corrected. 

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