February 12, 2014

DHHS Secretary Wos hears criticism from lawmakers over Medicaid waiver

A Republican lawmaker slams the Department of Health and Human Services as “totally incompetent” for hiding a Medicaid waiver that cost the state millions of dollars.

Secretary of Health and Human Services Aldona Wos received harsh words Tuesday from fellow Republicans angered that the department failed to ask legislative permission before requesting an expensive Medicaid waiver.

The General Assembly had passed a law in July requiring legislative approval before the department asked the federal government for a significant change in Medicaid policy, known as a waiver.

Two weeks later, the department requested a waiver without informing the General Assembly as required by law, the News & Observer first reported Tuesday.

DHHS said the cost could be $2.8 million to state taxpayers.

But Rep. Nelson Dollar, a Cary Republican, and a chief budget writer, expressed his concern that the department’s $2.8 million estimate could grow to as much as $45 million. He said the legislature’s budget committees should have been informed that DHHS was going to seek the waiver.

“We don’t have that kind of money,” Dollar said. “My question is, where are you going to get the money?”

Rep. Marilyn Avila, a Raleigh Republican, had even stronger words. She reminded Wos that her staff had been considering the waiver for two months but never told the General Assembly, which could have included the money in the budget.

“We could have found a way to solve this problem and not make this government look like it’s totally incompetent,” Avila said. “We could have handled this in a much more adult way and not put the question to the citizens of this state that we don’t know what we are doing.”

While apologizing to the lawmakers, Wos said the decision was the right one in retrospect. She said she was not kept in the loop about the waiver.

“I am deeply disappointed that our proper process was not followed,” Wos said. “It was not shared with the CFO for Medicaid, the CFO for DHHS, or the front office. We apologize to the committee for being in this situation.”

When the General Assembly passed the budget in July, it included a provision requiring legislative approval for future waivers.

Former Medicaid director Carol Steckel requested the waiver in August. The waiver requested that North Carolina delay the use of federal income standards that calculate whether Medicaid recipients can renew their coverage.

Steckel, who resigned in September, has not responded to requests for comment.

The waiver boils down to this: Medicaid recipients who don’t qualify for renewed coverage in the first quarter of the year will receive an extra three months of coverage. And those renewing after the first quarter will receive an extra six months of coverage.

The department first informed legislative staff about the waiver in January.

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