Little Oversight and a lot of Overspending on Medicaid

North Carolina overspent on Medicaid services by as much as $226 million in a single year, according to a report released yesterday from the Legislature’s Program Evaluation Division.

$2.4 billion was spent on Medicaid “enhanced services” from 2006-2009, of which $827.2 million was paid by the state. However, the program had no oversight mechanism until February 2007. During this first year, Individual Community Support services constituted 97 percent of funds, most of which included non-medical care for mental health patients and other services which were later deemed unnecessary and overpriced. An article in the News and Observer states that auditors found providers billed Medicaid for questionable expenses such as taking student groups to the movies and clients to the gym, which accounted for up to 36 percent of total spending.

These expenditures continued to grow by 235 percent in less than a year. While all other 18 services in the program, including new treatment options, accounted for the rest of the 3 percent in spending. The $226 million in money that could have been saved by the state was calculated by the Program Evaluation Division by comparing spending in the first year with expenditures after September 2008 when program oversight was established.