NC Auditor’s report: NCTracks delays could cost state millions
A state audit of the troubled NCTracks program, which manages Medicaid payments, says its failure to be federally certified could cost the state millions of dollars.
The Office of the State Auditor reported that NCTracks, which is managed by the N.C. Department of Health and Human Services, also has unresolved risks that could prevent it from becoming certified in the near future.
Certification would increase federal funding of the program to 75 percent and decrease the state’s share of the bill, which could save North Carolina $9.6 million a year, according to the audit.
During the auditing process, DHHS updated its internal target date for certification from July 1 to October, but the project schedule was not changed to reflect the new time frame. The audit concluded that “better management of the certification process is needed.”
Joe Cooper, the chief information office for DHHS, said in a phone interview Thursday that the July 1 deadline was an internal target that the department had set for itself, knowing it was aggressive.
In its written response to the audit, DHHS said that significant progress had been made toward obtaining certification since the audit fieldwork had been completed. It added, “The Department has appropriately managed the certification process.”
The department attributed the delay in requesting certification review from the Centers for Medicare and Medicaid Services (CMS) to DHHS’s conscientiousness in making sure NCTracks was ready before submitting a request.
NCTracks, which processes Medicaid claims, has been plagued with difficulties since it went live July 1, 2013, two months after another audit warned that the program had issues that put it at risk for major errors. As soon as NCTracks launched, hospitals and doctors who provide care for Medicaid patients complained that they were not being paid.
At the time, State Auditor Beth Wood expressed concern that an error-ridden NCTracks could delay CMS certification of the program.
Since its launch, the federal government has paid half of the program’s operational costs, with the state providing the rest of the funding. Certification would increase federal support to 75 percent.
According to Computer Sciences Corp., which designed and developed NCTracks and operates it, “The impact of not obtaining certification could be costs exceeding 25 percent of the operating costs for the period that certification is not granted.”
Cooper says taxpayers will be protected from the costs because the department budgeted for the 50 percent share of the cost. He also said that it is possible to obtain funding retroactively to July 1, 2013.
The report by the State Auditor’s Office noted that full reimbursement is not guaranteed.
According to CMS, certification is dependent on the system demonstrating its competency by the deadline determined. DHHS now says the target date for beginning the process is October.
The audit also reported that risks, defects and data problems in the NCTracks program exist that could prevent the department from obtaining certification as soon as possible. It listed 79 defects identified during the audit that could impact the process.
The audit recommended that the department provide the General Assembly with a detailed follow-up plan to ensure that the project is completed smoothly and on time. “This is especially important since the NCTracks certification process failed to meet its original schedule,” it said.
But a DHHS spokesman reiterated Thursday that it was important to remember that time had passed since the field work on the audit had been done and that progress had been made.
The department told the legislative oversight committe that could have certification by the end of 2014, but that the exact date depended on CMS. Cooper reiterated that on Thursday.
He said he was confident that NCTracks will be granted full funding.
“There isn’t anything I see that’s going to prevent us from being successful in obtaining certification,” he said.