The problem with the truth at DHHS

by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, October 8, 2013.

The biggest story this week about the troubled state Department of Health and Human Services has nothing to do with the testimony of embattled DHHS Secretary Aldona Wos before a legislative oversight committee.

The most troubling news about Wos, the department she leads, and the way the McCrory Administration operates comes from an investigative report from N.C. Health News that reveals that top McCrory officials twisted and distorted their response to an audit of Medicaid to fit their political agenda and continue to mislead the public about Medicaid even today.

The story by Rose Hoban relies on documents and emails from DHHS obtained through public records requests and paints a clear picture of an administration going to great lengths to make sure the audit supported their assertion that Medicaid in North Carolina was broken.

That’s the foundation of McCrory’s call to privatize the program and it is also the excuse he gives for every criticism of the budget the General Assembly passed and that he signed. Problems and alleged cost overruns with Medicaid are cited the as the reason teachers did not receive raises and cuts were made to public schools.

Hoban’s reporting tells a much different story. Emails show that former Medicaid Chief Carol Steckel repeatedly edited the department’s response to an audit earlier this year to remove or change the department’s responses that don’t agree with the audit findings, even when the evidence clearly shows the audit was off base.

The most glaring example was the audit’s finding that administrative costs in North Carolina’s Medicaid program are 38 percent higher than the nine states with programs of the same size.

That is actually not true. DHHS officials correctly pointed out in a initial response to the audit that the administrative costs of other states are hidden in their managed care contracts and that when you calculate the costs accurately, North Carolina’s spending on administration is actually the second lowest of the nine states with similarly sized programs.

That would never do. The McCrory Administration needed people to think that Medicaid was wasting money on overhead, so Steckel deleted that information from the audit response.

And as Hoban points out in her story, McCrory is still quoting the 30 percent figure for administrative costs to reinforce his Medicaid is broken mantra. He cited the figure just a couple of weeks ago in an interview on NC Spin.

Hoban’s piece also raises serious questions about the widely reported “massive cost overruns” in the Medicaid program. The original response by DHHS to the audit’s claims of budget problems included the evidence that department warned the General Assembly that the cost savings built into the budget were not possible, but lawmakers included them anyway and then complained of cost overruns when the savings weren’t realized.

There’s plenty more in Hoban’s story and though at first glance it may not seem as compelling as doctors being denied payments or former campaign staffers receiving huge salaries in jobs they are not qualified for, what Hoban has found is far more disturbing.

The McCrory Administration is intentionally misleading the public about one of the most important programs administered by state government that affects millions of people’s lives to build support for an unpopular political agenda of privatizing Medicaid and slashing the budgets of public schools.

McCrory knows that administrative costs of the Medicaid program are not 30 percent higher than other states, but he keeps saying it anyway. His own department knows too.

It is no longer a matter of the problems with medical payments and processing food stamps, or even paying political cronies high salaries.

The question now, in light of Hoban’s story, is more fundamental. Can we trust the folks running DHHS to tell us the truth?