McCrory's 13 billion dollar defining moment

by Tom Campbell, Executive producer and moderator, NC SPIN, February 21, 2014.

Politicians don’t get to choose the crises they face while in office but they can choose how they will react to them. Their responses often determine both their tenure in office and how history judges them. Thirteen months into his administration Pat McCrory has had his share of crises, including unemployment, coal ash spills, snowstorms, protestors, unhappy teachers and lawsuits at every turn. But the crisis that should keep McCrory awake at night is Medicaid.

It would be easy to blame the Medicaid crisis on McCrory, DHHS Secretary Aldona Wos and the Republican legislature but that is too simplistic and not accurate. North Carolina’s Medicaid program has a long record of cost overruns, mismanagement and personnel problems. So while current leadership didn’t cause the crisis, neither have they fixed it and there is evidence problems are worse.

In July, DHHS implemented two new IT programs, neither of which should have gone live. NC Fast, the program designed to receive and process food stamps worked so poorly that the federal government threatened to withhold state funding. NC Tracks, years in design and millions over budget, launched with such horrendous consequences that doctors and hospitals went months without payment for Medicaid services, prompting a lawsuit over lack of payment. Making matters worse, in four months lawmakers must revise the state budget for the new fiscal year, but since NC Tracks is performing so poorly lawmakers have little accurate information on which to base budget decisions. We don’t know if Medicaid spending is tracking above, below or on budget? Teacher and state employee compensation, education funding and even next year’s Medicaid budgets are in limbo without this important information.

A large number of the most experienced people at DHHS have departed, partially due to at least three DHHS secretaries in the last five years and several Medicaid directors. Implementation of the Affordable Care Act (Obamacare) is creating problems and McCrory’s Medicaid reform program pleased few and is now back in design-phase.

But the strongest evidence of the Medicaid chaos was the revelation that DHHS has entered into a 3 million dollar sole-source consulting contract with a company to essentially turn over the management of Medicaid. A DHHS memo requesting “emergency staffing” says, “ (DHHS) does not have adequate staff with the necessary experience and skills to properly manage the state’s 13 billion dollar a year Medicaid program. The current staff that is qualified is consumed with daily problem solving related to the implementation of its Medicaid computer system, NC Tracks, and the Affordable Care Act. The department has not been successful in recruiting experienced and qualified staff to alleviate this problem.”

It is problematic that state contract bidding procedures were overlooked and even more disconcerting the administration wasn’t transparent in announcing this contract, it was queries from the News and Observer that forced acknowledgement of the no-bid contract. But what is really scary is that DHHS is essentially throwing up their hands and admitting they are unable to manage Medicaid and must have outsiders provide contracting, setting Medicaid rates, auditing, budgeting, managing information technology and privacy concerns…virtually all the management functions of Medicaid.

The 13 billion dollar Medicaid crisis may well be Pat McCrory’s defining moment. His response and leadership might determine his chances for re-election but, more importantly, could significantly impact North Carolina’s future.