Cautiously holding their fingers to the wind most politicians avoid controversies like the plague – but State Auditor Beth Wood, a farm girl who put herself through East Carolina University, has a trait that’s all but extinct in politics: Grit.
Last year, after Wood audited the state’s new Medicaid Processing Computer System, she blistered fellow Democrat Beverly Perdue, saying Perdue had turned a $250 million project into a $500 million boondoggle that was two years behind schedule and hadn’t processed a single Medicaid claim.
Last week, she held a press conference with Governor McCrory, reporting her latest audit: This time she’d found the State Medicaid Department had spent $1.4 billion more than its budget over the last three years and has overhead costs that are $180,000 higher than the same costs in other states our size.
A long trail of wreckage (beginning with the benign neglect of Governor Mike Easley and compounded by Governor Perdue’s decision to appoint a lobbyist head of the Department of Health and Human Services) winds back across a decade to those two audits.
Lanier Cansler, the lobbyist, served as a Republican legislator from Asheville in the 1990’s, then, in 2001, Governor Easley appointed him Deputy Secretary of the DHHS; a couple of years later Cansler left government to become a lobbyist and one of his first clients was a company bidding for the biggest contract in state government – the State Medicaid Claims Processing Contract.
Cansler’s client won the contract but the new computer system never got off the drawing board – two years later (and twenty million dollars poorer) the state cancelled it. Then Cansler began to lobby for another company that was bidding to get the next version of the same contract and succeeded again. The state awarded his client the $250 million contract.
Then Governor Perdue appointed Cansler head of the DHHS and three years later, when Wood did her first audit, Cansler’s former client was two years behind schedule and $200 million over budget – which Cansler explained to legislators by saying, Yes, there was a problem – but on the other hand the federal government was paying 90% of the costs so the problem wasn’t as bad as it seems.
For years, Cansler had also praised another DHHS project, Community Care of North Carolina, calling it a paradigm of efficiency and a money saver. But, according to Wood’s latest audit, that was another illusion: She reported, “North Carolina’s Medicaid cost per eligible (person) is higher than any other state in Region IV and is higher than the national average. The question should arise, if Community Care of North Carolina saves significantly on Medicaid expenditures, why does North Carolina spend so much more on Medicaid than comparable states?”
Now Governor Pat McCrory has to figure out how to plug a $1.4 billion three-year old hole in the Medicaid budget, and figure out how to do the impossible: Turn a brother-in-law contract into an overnight success.