Posted on 04/20/2004 6:17:30 AM PDT by TaxRelief
RALEIGH - Expect to hear a lot over the next weeks and months about a state "Medicaid scandal"- and expect not to be able to follow all of the ins and outs of this mind- boggling story.
State Auditor Ralph Campbell has just served up what was widely termed a "stinging" audit of North Carolina's Medicaid program. Campbell, a Democrat serving his third, said that it was the "most damaging audit" he had released during his tenure. Specifically, the audit dealt with the state's administration of the Disproportionate Share Hospital (DSH) program, which for years has directed federal funds to hospitals that serve a particularly large proportion of Medicaid-eligible patients.
In the mid-1990s, a group of hospitals led by Carolinas Medical Center in Charlotte approached the state with the idea of being more aggressive in drawing down DSH funds. It's important to remember that this was a period in which many other states were already being much more "aggressive" - that is, they had figured out ways to scam the federal government out of billions of dollars and then use the proceeds for whatever state politicians wanted.
The question was: Why should North Carolina leave their share of this loot on the table? Of course, they didn't use those words, but the idea was that our state was being a sucker (and that the money would come in handy).
State officials apparently agreed but said they couldn't do the work in-house, so the hospitals and their private attorney basically took over the process. Campbell and others, including federal officials, now view this arrangement as illegal and thus the state's ensuing administration of $1.2 billion in DSH funds questionable. Campbell's office estimated that North Carolina might have to repay more than $400 million in DSH funds to Washington.
On these points, Gov. Mike Easley and his Health and Human Services Secretary, Carmen Hooker Odom, have complained about a bum rap. To some extent, I think they are right, though Odom's caustic language was unfortunate. For one thing, this deal between HHS and the hospitals began during the Jim Hunt administration (and let's face it, what didn't?). It had already been exposed and ended by state and federal officials and the news media a year ago.
Odom also strongly disagrees with Campbell's estimate of the potential refund; because North Carolina could have been even more aggressive in drawing down DSH funds, the administration argues, the net refund due to the federal government should be around $12 million, in relative terms a trivial sum.
There were other problems outlined in the Campbell audit, however, and many date from the start of the Easley administration. They include what auditors said was the inappropriate payment of $240 million in "super DSH funds" to ineligible hospitals and about half a billion dollars in overpayments to state hospitals for inpatient and outpatient services, in part reflecting outdated data and poor record-keeping. Again, Odom and her department dispute many of these allegations, arguing that the state auditor Eis misinterpreting the relevant statutes and guidelines.
Here's what I think is going on behind this jarring war of words: 1) there was a preexisting animus between Campbell and the Easley administration, dating back to a previous critical audit of preschool programs; 2) Odom was in the midst of haggling over the DSH refund with the feds, and viewed Campbell's audit as hurting the state's negotiating position; and 3) this is an election year in which allegations of mismanagement of tax funds on such a grand scale - from a fellow Democrat, no less - are seen by EEasley's political operatives as unfair and potentially damaging.
Indeed, Republicans have jumped on the issue. Gubernatorial candidate Bill Cobey fired off a release linking Easley to the scandal, while the GOP candidate for state auditor, Les Merritt, actually echoed Odom's critical comments of Campbell by arguing that some of the fault lay with him for failing to uncover Medicaid problems years before.
If I haven't already lost you with all of these names and claims, let me leave you with this: there is enough blame to go around here. North Carolina's Medicaid program has been one of the most expensive in our region, and these disclosures help to explain why. Previous administrators seemed to have been in way over their heads, and it will take some time to straighten things out - and to enact some needed, fundamental reforms so that staggering growth in Medicaid spending doesn't continue to eat up available revenues and give politicians a pretext for raising your taxes.
In short, this story is complex and politicized - but it matters, a lot.
John Hood is president of the John Locke Foundation, publisher of Carolina Journal.com, and host of the statewide program "Carolina Journal Radio."
Perhaps we need to demand that a "Medicaid Commission" hold hearings over this matter in North Carolina?
Auditor taking the heat
Sometimes it’s tough being the bearer of bad news.
Sometimes, our reaction is to blame the messenger, the person who tells us that something is amiss rather than point our fingers at the person responsible for the problem in the first place.
State Auditor Ralph Campbell is sure getting a dose of the blame the messenger syndrome. It seems as though people are firing their political guns at him from all sides. Both Republicans and Democrats are criticizing Campbell for a recent auditor’s report that found pretty severe problems in the state’s Medicaid program.
The ink was barely dry on the report when Les Merritt, a Republican candidate for state auditor, criticized Campbell, a Democrat.
Merritt called the audit “too little, too late” and asked, “What took the state auditor so long to uncover these longstanding problems?”
Merritt’s statement echoed that of the Democratic administration of Gov. Mike Easley. Carmen Hooker Odom, secretary of Health and Human Services, questioned why Campbell’s office hadn’t found the problems earlier.
The auditor’s office, in defending the report, responded by saying that it is the Health and Human Services Department’s responsibility to oversee the Medicaid program, not the auditor’s.
The audit questioned $1.2 billion in Medicaid payments over a six- year period and found that $414 million in federal money had been used improperly.
Campbell said the Medicaid audit was the most damaging one during his nearly 12-year tenure as state auditor and proclaimed that managers, beginning with the top ranks of the Department of Health and Human Services, should be held responsible.
For his part, Easley used an opportunity with the press the other day to express his confidence in Hooker Odom in working to deal with the problems brought out in the audit.
He said that Hooker Odom inherited a department that had problems and noted that many of the problems date back to the Hunt administration.
It’s somewhat unusual to see discord among high-ranking North Carolina Democrats, particularly during an election year. The auditor is elected statewide, separately from the governor, making the auditor’s office independent from the governor.
The criticism that Campbell received from Merritt was to be expected. Merritt has also been critical of Campbell in some other audits and has likewise questioned why the auditor’s office hadn’t discovered accounting problems earlier.
Only time will tell if the apparent tension between the Easley administration and Campbell will fester or will subside as we get further into the election year.
Write to Barry Smith at bsmith@link.freedom.comTimes-News Online
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.