The Trump administration says North Carolina owes it $41 million. The state disagrees.

A series of Medicaid errors that went on for years led to North Carolina wrongfully taking millions of dollars from the federal government, according to a new report.

And now the feds want that money back.

The Trump administration’s Department of Health and Human Services released the report Thursday afternoon. It detailed how under the watch of both Democratic Gov. Bev Perdue and Republican Gov. Pat McCrory, an error by state workers in charge of processing Medicaid claims led to an estimated $63 million in improper Medicaid payments.

The federal government picked up most of the tab for those payments, pitching in $41.2 million that has been identified to date.

The state examined a random sampling of 200 cases in 2011, 2012 and 2013 and concluded all of them were initially paid incorrectly. Just 16 were later fixed. The report recommended that North Carolina pay back the $41.2 million and also ensure that the state system complies with the law in the future.

But the state is fighting back and doesn’t appear to intend to pay what the feds say they’re owed.

“North Carolina disagreed with our findings and recommendations,” the report says – although it notes that the federal government doesn’t plan to back down, either.

“After reviewing North Carolina’s comments, we maintain that the evidence supports our findings and recommendations.”

A spokesman for the North Carolina Department of Health and Human Services declined to comment other than to point to past remarks from N.C. DHHS Secretary Mandy Cohen that were included in the audit. Cohen has experience with the agencies on both sides of this exchange; she also was a high-ranking administrator in the federal DHHS under the Obama administration.

In her North Carolina role, she wrote in an August letter to the Trump DHHS that North Carolina’s processes are “routinely vetted ... to ensure compliance with federal requirements.”

Despite their differences of opinion, both the federal government and state government agree that the state doesn’t appear to be making any improper payments now that could cost taxpayers in the future.

Cohen’s letter said the state changed its system to get into compliance on July 1, 2013.

At the time the problem was fixed, the head of the state’s DHHS was Aldona Wos, appointed by McCrory.

Wos has said that when she left DHHS in 2015, the state’s Medicaid fund had gone from being in the red to having $131 million on-hand. But her time at DHHS also included a state audit that found $1.6 million improperly spent on things like nepotism hires and excessive overtime pay for Medicaid workers, and another $1 million spent on an improper IT contract.

This story was originally published November 17, 2017 at 6:26 PM with the headline "The Trump administration says North Carolina owes it $41 million. The state disagrees.."