As NC Dems Continue Call for Medicaid Expansion, Audit Finds DHHS Medicaid Program Improperly Paid Tens of Millions to Unlicensed Providers, Fraudsters

RALEIGH – $13.4 million.

That’s the amount of improper payments the N.C. State Auditor says they found in a “tiny sample” of records of payments from the state Medicaid program, program health providers, often blatantly illegitimate or disqualified ones. They insisted far more, millions more, in improper payments are likely gushing through the the notoriously volatile and dysfunctional healthcare entitlement.

The key findings in the report explicate blatant bureaucratic failings that led directly to tens of millions in wrongful payments, while also failing to remove clearly disqualified providers from the government healthcare payment program. According to the auditor, the Division of Health Benefits:

  • Did not identify and remove enrolled providers from the Medicaid program who had their professional license suspended or terminated.
  • Allowed all providers who had professional license limitations to remain enrolled in the Medicaid program.
  • Did not ensure that its contractor verified all professional credentials during the Medicaid provider enrollment re-verification process.
  • Did not require its contractor to verify provider ownership information during the Medicaid provider enrollment re-verification process.

Providers whose licenses were yanked — by healthcare licensing boards in this state — for things like using the same syringes on multiple patients were allowed to remain in the program, treat patients, bill Medicaid, and get paid.

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In some cases, provider owners who were literally being investigated and charged for Medicaid fraud, or convicted identity theft felons, were still ‘A Okay’ as far as this entitlement bureaucracy were concerns.

To be clear, this is the Medicaid program that Democrats want to expand, adding over half a million people too. It’s a perhaps the most consistent policy plank of the North Carolina Left in the last decade, starting with Obamacare’s passage and serving as a default rallying call for Democrats in the Old North State til this day.

One example of how dysfunctional this particular government healthcare programs is — not that dysfunction is a unique quality of government entitlement programs — is the years long shortcomings of credentialing and payment systems that have struggled to consistently, properly code and classify providers.

The audit says this resulted failing to verify credentials for possibly thousands of Medicaid providers, some for as long as five years. FIVE YEARS of operating without a license and still billing and receiving Medicaid payments. Notably, this includes nursing homes that were carrying on, billing Medicaid and receiving taxpayers’ money while not having the proper licenses.

Let that soak in; during a pandemic that preys on the old and infirm, we realize our government healthcare programs were essentially financing unlicensed nursing home operators.

What’s more, these dysfunctional systems, have been dysfunctional for years, transcending administrations.  This author blew the whistle on such failings in these Medicaid credentialing programs (NCTRACKS) 2013 from within state government and only now are there plans to replace them — but not until 2023.

Beyond improper payments, the program failings also include mis-classifying legitimate, qualified providers. Coding an obstetrician as a podiatrist in their system, for instance; so that provider’s legitimate billing for delivering babies get repeatedly rejected by the bureaucracy.  ‘Why would a foot doctor be delivering babies?’ might be a question a normal person would ask.

In the webbing of NCDHHS, however, these obvious mistakes often take weeks to resolve, threatening the very viability of providers serving under-served, low-income Medicaid patients.

Add that to the tens of millions of dollars improperly paid out because of these same fundamental and administrative failings, and we can see how growing this leviathan is exactly the wrong thing to do.

Read the full audit here.

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