DHHS, Medicaid fixes start at the top

Editorial by Charlotte Observer, July 7, 2014.

The sad thing in reading the (Raleigh) News & Observer’s important two-part series on the state’s Medicaid woes and the dysfunctional management of the Department of Health and Human Services is that the revelations no longer have the power to amaze. Problems beset DHHS and Medicaid long before Pat McCrory was elected governor nearly two years ago. But McCrory and the current legislature haven’t made things any better, and in one key way they seem to have made things worse.

McCrory’s hiring of Aldona Wos as secretary of health and human services was a huge blunder, one that he refuses to rectify by letting her go. Wos has made a series of poor decisions that have resulted in a place even consultants the department hired to address its Medicaid troubles said “lacks leadership and talent,” “an environment which fosters poor results and execution.” The atmosphere under Wos has sent many veteran staffers fleeing, often replaced with political hires or acquaintances who lacked pertinent experience.

DHHS chief financial officer Rod Davis said in November that the Medicaid office “does not have adequate staff with the necessary experience and skills to properly manage the … program.”

Feedback from staffersis damning: “Leadership is non-communicative, secretive.”

The incompetence and poor management of Wos and others was publicly showcased in May. Part of the governor’s budget included a plan to manage Medicaid costs that relied on an illegal taxation maneuver that would funnel $60 million in federal dollars to the state – a gimmick the feds had rejected in Pennsylvania.

Frank Thompson, a Medicaid expert at Rutgers University, told the N&O he was shocked that such a proposal made it into the budget. He called it “government by amateurs.”

As troubling, the consultant DHHS hired under a no-bid contract to reach $3.25 million yearly, Alvarez & Marsal, came up with that budget gimmick. The consultants were also involved in a $200 million mistake in projecting the Medicaid budget deficit.

This is a dismaying backdrop to the legislature’s budget wrangle over a Medicaid plan that is both cost efficient and provides good patient outcomes. McCrory and House leaders offer a sound proposal that’s backed by health leaders. It builds on an existing nonprofit network of care but makes providers responsible for overruns. The Senate is pushing a managed care system that has had troubles or failed elsewhere.

McCrory is headed in the right direction with his proposed Medicaid changes. He needs to get on the right path in fixing the department, DHHS, that oversees it. He needs to fire Wos and recruit and keep experienced and talented staff. He also needs to end the practice of no-bid contracts that Wos has made a staple of DHHS and has led to wasted dollars on incompetent hires.