Medicaid Malpractice - The Mess at DHHS

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The News and Observer has an in depth investigative report out detailing the many issues that have plagued the Department of Health and Human Services under Governor McCrory's administration.

The article touches on the many no bid contracts, totaling millions of dollars per year that have been awarded and how it has degraded morale of the professional staff. Here's an excerpt from the piece,

Medicaid is a $13 billion-a-year enterprise in North Carolina that cares for 1.7 million people, from newborns to the most frail and poor seniors. As of June 1, a quarter of the division’s 332 jobs were vacant; the average unfilled job had been open for 347 days, or nearly a year.

In November, DHHS’ chief financial officer sent out a cry for help. The Medicaid office “does not have adequate staff with the necessary experience and skills to properly manage the … program,” Rod Davis wrote to the state budget office.

Frank Thompson, a Medicaid expert at Rutgers University, said he was shocked that such a proposal made it into the budget.

The federal government started tightening regulations on schemes such as provider taxes in the early 1990s, he said. Such policies are allowed but require careful drafting and negotiation with regulators.

“There should be all sorts of Medicaid officials in North Carolina who would tell the governor, ‘Dude, this is not going to fly,’ ” Thompson said. “This sounds like government by amateurs.”

Don Taylor, a Duke health care expert, was more succinct.

“Malpractice,” he said. 

The rise of these consultants with little to no experience has led to more experienced staff leaving the agency. The article quotes from the resignation letter of then Chief Financial Officer, Rick Brennan,

“Now, in the last two months, as is evidenced in no small part by sole source contracts and reliance upon individuals with no practical experience, it appears that the Department has opted to go in a totally different direction,” Brennan wrote in May when he resigned. “Over the last couple of months, it has become increasingly apparent that there is no more that I will be allowed to do. Our hands have been tied and those with prerequisite experience and capabilities are unable to address the most elementary, substantial risks to the Agency.”

On June 27, in response to a public records request for all written work delivered to the department by Alvarez & Marsal, DHHS released 28 pages. The bulk was an assessment of Medicaid’s Information Technology operations. The report listed feedback from staffers:

• “There is no support, morale is bad, and we are set up to fail.”

• “Managers will make promises and not keep them, very little feedback.”

• “Why am I staying when everyone else in the organization is leaving?”

• “Leadership is non-communicative, secretive, and do not know their staff.”


  1. Alyson Callaway's avatar
    Alyson Callaway
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    The governor's plan to defund and disorganize DHHS is working.
  2. barbara balmer's avatar
    barbara balmer
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    Another example of the powers that be giving jobs to their buddies' and it doesn't matter that they are not qualified. As always the neediest of our people are sacrified for the greedy!!!! November is not coming fast enough.
  3. LEE & SANDRA HEBERT's avatar
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