NC Medicaid audit allegedly distorted for Governor McCrory's benefit

Officials in North Carolina denied accusations on Wednesday that they tampered with their response to an audit of the state's Medicaid system, which has been targeted by Gov. Pat McCrory (R).

North Carolina Health News, (NCHN) a non-profit news site, reported on Tuesday that then-incoming state Health and Human Services secretary Aldona Wos and Medicaid program head Carol Steckel failed to include questions regarding the audit's findings. Both Wos and Steckel were hired by McCrory's administration, and Steckel was charged with overseeing the final version of the response.

In one instance, Steckel did not include a response to auditor Beth Wood's assessment that the program suffered from an "apparent lack of oversight," resulting in a three-year budget overrun of $375 million. Documents obtained by NCHN revealed that officials challenged Wood, citing "consumption and price" as factors contributing to the overrun.

"Since Medicaid is an entitlement program, the Division has little control over consumption," they wrote to Wood. But according to a draft of the response, Steckel said referring to the program as an entitlement constituted "speaking out of school" to Wood.

NCHN also reported that Steckel also failed to include health officials' mentions that attempts to change a state Medicaid program requires federal approval, which can take months and is often costly to the program.

The version of the audit approved by Steckel, which was released in January 2013, has since been cited by McCrory's administration to justify his drive to privatize the program, which he has called "broken."

The Associated Press reported on Wednesday that Steckel resigned in October 2013 and took a position at WellCare Health Plans, a for-profit company that could bid on the rights to run the program.

According to the AP, Wos told state lawmakers on Tuesday that she did not see a conflict of interest in Steckel's new position, and stood by the results of the audit.

"The audits are very helpful for us; they're insightful, they're helpful, they're instructive," Wos was quoted as saying. "We came in January and looked at all our tasks with a new pair of eyes."

However, John Oberlander, a professor of social medicine at the University of North Carolina, told NCHN that McCrory's administration had devised "a contrived crisis" to justify its bid for privatization.

"They had a solution and they were looking for a problem," Oberlander said to NCHN. "And they were looking to portray Medicaid in as negative a light as possible in order to justify what they wanted to do, which is privatize."