1. 1 North Carolina Office of the State Auditor Excellence, Responsibility, Can-Do Attitude, & Teamwork

2. 2 PERFORMANCE AUDIT Department of Correction Inmate Medicaid Eligibility Presented by Beth A. Wood, CPA, State Auditor North Carolina Office of the State Auditor

3. 3 DOC Wasting Money on Medical Care http://abclocal.go.com/wtvd/video?id=7627758

4. 4 Where Did the Idea Come From? State Auditor Directive to Find Cost SavingsState Auditor Directive to Find Cost Savings Iowa Efficiency ReviewIowa Efficiency Review –Public Works December 2009 –Claim federal reimbursement for eligible inmate hospital care

5. 5 Where Did the Idea Come From?

6. 6 What Was Happening in North Carolina? A 2010 North Carolina Office of the State Auditor Fiscal Control Audit revealed:A 2010 North Carolina Office of the State Auditor Fiscal Control Audit revealed: –Hospitals were billing the Department of Correction: On average 467% of Medicare/Medicaid ratesOn average 467% of Medicare/Medicaid rates Ranging between 198% to 879% of Medicare/Medicaid ratesRanging between 198% to 879% of Medicare/Medicaid rates Q: Can Inmates Participate in Medicaid?Q: Can Inmates Participate in Medicaid? A: Inmates Are Not Eligible for MedicaidA: Inmates Are Not Eligible for Medicaid

7. 7 North Carolina Medicaid Plan Source: http://www.ncdhhs.gov/dma/plan/m.pdfhttp://www.ncdhhs.gov/dma/plan/m.pdf

8. 8 Federal Guidance Source: http://www.ncauditor.net/EPSWeb/Reports/Performance/PER-2010-7260.pdfhttp://www.ncauditor.net/EPSWeb/Reports/Performance/PER-2010-7260.pdf

9. 9 Audit Objective ToTo determine if the Department could reduce inmate health care cost, ByBy requiring hospitals and other medical service providers to bill Medicaid for eligible inmate inpatient hospital and professional services.

10. 10 Audit Scope The audit scope included:The audit scope included: – the Departments inmate medical costs, and – inmate medical information for calendar years 2008 and 2009. We conducted the fieldwork from March to June 2010.We conducted the fieldwork from March to June 2010.

11. 11 What Did We Do? Obtained a Letter from the Centers for Medicare & Medicaid Services to Clarify Federal Regulations Concerning Inmate Medicaid EligibilityObtained a Letter from the Centers for Medicare & Medicaid Services to Clarify Federal Regulations Concerning Inmate Medicaid Eligibility Interviewed Department of Health and Human Services, Division of Medical Assistance StaffInterviewed Department of Health and Human Services, Division of Medical Assistance Staff Interviewed Personnel from States That Charge Medicaid for Inmate Health Care CostsInterviewed Personnel from States That Charge Medicaid for Inmate Health Care Costs

12. 12 What Did We Do?

13. 13 What Did We Do?

14. 14 What Did We Do? Obtained the Services of Specialists to:Obtained the Services of Specialists to: –Identify inmates receiving inpatient medical care for 2008 & 2009 –Identify doctor fees related to inpatient stays –Review inmates demographics and medical records –Identify inmates who were likely Medicaid eligible –Compared what was paid vs. what should have been paid under Medicaid rates –Removed FFP to get the state portion –Calculate potential savings

15. 15 What Did We Find?

16. 16 What Did We Find? Inmate Health Care Cost Savings of $11.5 Million a Year.Inmate Health Care Cost Savings of $11.5 Million a Year. Amount Is Equal to the Office of the State Auditors Annual Appropriation.Amount Is Equal to the Office of the State Auditors Annual Appropriation.

17. 17 Recommendations Bill Eligible Inmate Inpatient Health Care Costs to MedicaidBill Eligible Inmate Inpatient Health Care Costs to Medicaid Determine Inmate Medicaid Eligibility and Prevent Eligibility TerminationDetermine Inmate Medicaid Eligibility and Prevent Eligibility Termination Savings Possible for Local GovernmentsSavings Possible for Local Governments

18. 18 New Legislation Requires Department to Use Medicaid For Eligible InmatesRequires Department to Use Medicaid For Eligible Inmates

19. 19 Update The audit that KEEPS ON GIVING!!!! 1 ST Nine months of implementation 997 Medicaid Cards Illegal??

20. 20 Performance Audit Audit of the States Performance Management Program (PMP) Department of Transportation Department of HHS (2 Divisions) Department of Public Instruction Represents 48% of 98,000 State Employees

21. 21 Where Did the Idea Come From? Experience with Office of State Treasurer, Office of State Auditor Office of State Personnel Report

22. 22 Audit Objectives Whether the performance management system is adequately monitored, and Whether selected state agencies effectively administer the performance management system.

23. 23 Audit Scope Administration of Program During FY 2008 We conducted the fieldwork from April 2009 to February 2010.

24. 24 What Did We Do? To Determine if Program Adequately Monitored OSA Interviewed Personnel at: The Office of State Personnel, The Department of Correction, The Department of Health and Human Services, The Department of Transportation, and Members of the General Assembly

25. 25 What Did We Do? To Determine Whether Agencies Effectively Adminstered the Program OSA : Selected Sample of Performance Appraisals Selected Tested All Appraisals with BG or Unsatisfactory Ratings

26. 26 Results 1.Monitoring Not Adequately Done By Agencies Performance Management Coordinators Did Not Review a Sample Appraisals DOT Did Not Have Written Policies Agencies Did Not Evaluate PMP State Personnel Did Not Monitor Agencies General Assembly Did Not Monitor

27. 27 Results Costs DHHS – 94,000 hours; $2.5 M DOT - 50,000 hours; $1.3 M DOC - 82,000; $1.5 M Employees Underperforming Still Working Employees Underperforming - Raises

28. 28 Recommendations 1.Agencies Should Have Policies and Procedures for Reviewing 2.Agencies Should Be Monitoring Their System 3.OSP Should Be Monitoring Agencies 4.General Assembly Should Look at Revising the System 5.General Assembly Should Assess Oversight Committees

29. 29 Results 2. Agencies Did Not Effectively Administer PMP Did Not Provide Measureable Performance Expectations Did Not Provide Written Development Plans Did Not Adequately Documented Corrective Action Plans

30. 30 Recommendations Agencies Should Ensure That Staff are Provided with Measureable Performance Expectations OSP Should Require Written Development Plans Agencies Should Ensure Documentation of Corrective Action Plans Happens

31. 31 OSA Strategy Ensure General Assembly Irrefutable Findings Presentations Made to General Assembly Supervisors and Managers Attend Presentations

32. 32 Questions?

33. 33 North Carolina Office of the State Auditor Public Website: www.ncauditor.net www.ncauditor.net or by contacting: Bill Styres Bill Styres Performance Audit Manager Performance Audit Manager919-807-7500Kenneth_Barnette@ncauditor.net

34. 34 North Carolina Office of the State Auditor Bill Styres, CPM Performance Audit Supervisor 919-807-7580Bill_Styres@ncauditor.net