Audit Rips DHHS Delays on NCTracks Medicaid Program | Eastern North Carolina Now

    Publisher's note: The author of this post is Barry Smith, who an associate editor for the Carolina Journal, John Hood Publisher.

Failure to get federal certification could cost state $9.6 million

    RALEIGH — State Auditor Beth Wood has chided the Department of Health and Human Services for dragging its feet in gaining federal certification for its NCTracks Medicaid information system, an omission that could cost the state $9.6 million a year.

    "What we're pointing out to the General Assembly is that they missed their first deadline," Wood said Thursday. The original deadline was July 1, one year after the system went operational July 1, 2013.

    Now, the department says it's aiming for federal certification by October. But Wood says the department doesn't have a plan to achieve that goal.

    "DHHS [officials are] saying, 'We don't think we owe the General Assembly a schedule of how we get there,'" Wood said.

    During the development phase for NCTracks, the federal government funded up to 90 percent of the costs, the audit report says. Since going live July 1, 2013, the feds have paid 50 percent of its operations with the state paying the other half.

    The federal government share will increase to 75 percent once the system is certified by the federal Centers for Medicare and Medicaid Services, saving the state budget $9.5 million a year.

    In addition to finding that NCTracks was not certified by July 1, 2014, the audit also found that that DHHS did not achieve detailed milestones set in the plan, that the certification project schedule has not been updated to reflect the failure to reach those milestones, and that unresolved risks exist that could delay federal certification further.

    The report urges DHHS to develop an updated certification schedule, provide the General Assembly with a follow-up certification plan and updated schedule, and create a plan to determine damages and how to hold its vendor, Computer Sciences Corp., accountable in case CSC fails to meet contract terms regarding certification.

    In its response, the department said that although the federal government had not certified NCTracks by the target July 1, 2014, date, funds are likely to be awarded retroactively once certification is received.

    Wood said the department can't count on that. "There have been some states that did not get reimbursed all the way back to their go-live date," Wood said.

    The department's response, authored by Mark Payne, DHHS chief of staff, said determining the damages to be paid by CSC is no simple matter.

    Wood also said that it was "totally abnormal" for an audit response letter to come from a chief of staff, and not the department's secretary. Wood said that on Wednesday, when the letter was due, DHHS Secretary Aldona Wos was not available to sign the response.

    Wood said Payne assured her that Wos was aware of the contents of the response letter.