Audit finds 7 problem areas at DHHS

by Lynn Bonner, News and Observer, March 24, 2014.

The state department of Health and Human Services overpaid Medicaid health care providers and set up a food stamp approval system that allows county workers to override benefit time limits.

The Medicaid and food stamp issues were among seven problem areas highlighted in a annual state audit released Friday of federally funded DHHS programs for the budget year that ended in June 2013.

The state overpaid Medicaid providers $440,000, of which the federal government paid nearly $290,000. The state has a $13 billion Medicaid program where the federal government pays about two-thirds of the costs.

In a sample of 280 Medicaid claims, the audit found 65 that were paid in error or were not properly documented.

Problems with Medicaid payments included improper billing for services and the state’s failure to recoup payments when rates were reduced retroactively.

DHHS said it would investigate the 65 claims to determine which payments were made in error and which can be resolved by gathering more documents.

The questionable payments were made when the state was still using its decades-old computer system and before it activated the bug-plagued new bill-paying system called NC Tracks, which was a headache for health care providers who had trouble getting paid. NC Tracks began operation on July 1, 2013.

The audit found that the new food stamp software, NC FAST, allowed county workers to override set time limits for recipients. More than 1,600 cases had errors in benefit time periods. Food stamp recipients are usually approved for six months of benefits before they must reapply, the audit said. The benefit periods in the problem cases ranged from one to three years, the audit said.

In its response, DHHS said that as of Dec. 6, 2013, the problems were corrected and recipients mailed forms to reapply. NC FAST was changed to prevent county workers from extending the benefit period beyond a year for regular food stamp service, DHHS said.

The audit also reported problems with vocational rehabilitation payments, claims payments in the Children’s Health Insurance Program, and monitoring of adoption assistance funds and grant payments to local mental health offices for substance abuse treatment.

DHHS said it has corrected or has plans to correct all cases.