North Carolina health officials used false information to secure federal funding for a delayed state Medicaid technology overhaul, according to unsealed allegations in a federal lawsuit reported by wral.com. State lawmakers responded Friday by looking into the project, which has faced years of delays and hundreds of millions in contractor costs.
State Lawmakers Demand Answers on the Delayed Medicaid Overhaul
The meetings aim to address the unsealed allegations and investigate the nearly decade-old technology project. Sawrey serves as the co-chiar of legislative committees on healthcare and Medicaid oversight.
“A lot changed over the past several years and just need to get to the bottom of it,” Sawrey told wral.com on Friday. “It’s hugely important. It’s imperative that we do that.”
House Speaker Destin Hall is also looking into the situation, according to his spokesperson, Demi Dowdy. The joint legislative oversight committee holds the power to obtain documents and compel state officials or employees to appear before it.
Federal Whistleblower Lawsuit Unseals Allegations of False Funding Claims
The renewed scrutiny follows recently unsealed allegations from a worker tied to the project within a now-dismissed federal lawsuit. Former state government workers alleged that top health officials provided false information to secure federal funding for the modernization effort. Whistleblowers also claimed federal regulators continued approving funds despite missing key project details.
North Carolina began planning its Medicaid system modernization in 2017 to comply with U.S. Centers for Medicare & Medicaid Services mandates. The federal MES framework aims to accelerate provider payments and improve fraud detection. However, a draft 2022 state audit revealed that a dozen planned upgrades were already behind schedule after the state received $120 million in federal planning funds.
Contractor Costs Surge as Completion Deadline Pushed to 2029
The modernization project was originally scheduled for full installation by the end of June 2024. State officials now project that the remaining work will stretch until the end of 2029. To maintain operations during the delays, North Carolina is paying a contractor at least $600 million to keep its existing legacy system running.
Project Timeline Reality Check: While NCDHHS maintains that the department has made consistent progress through a phased approach approved by federal regulators, internal documents obtained by wral.com show that project concerns surfaced years before the initial 2024 deadline expired.
DHHS leaders have repeatedly requested increased state funding to support rising Medicaid enrollment and healthcare costs. Lawmakers subsequently approved an additional $600 million in recurring funding for 2025-27, alongside $319 million from the state’s Medicaid reserve.
State Auditor Revives Investigation Into Medicaid Technology Spending
State Auditor Dave Boliek’s office is actively pursuing a renewed investigation into the technology initiative. Randy Brechbiel, a spokesperson for the auditor’s office, confirmed Friday that investigators are currently gathering and analyzing program data.
The audit team is also evaluating how system delays affect Medicaid operations, provider access, and fraud prevention efforts.
Frequently Asked Questions About the North Carolina Medicaid Modernization
What is the Medicaid Enterprise System and why is North Carolina adopting it?
The Medicaid Enterprise System is a federally mandated computer framework designed by CMS to replace outdated legacy systems. It helps states pay healthcare providers faster and provides advanced tools to detect waste, fraud, and abuse.
How much extra money is North Carolina spending due to project delays?
Because the completion deadline was pushed from June 2024 to the end of 2029, North Carolina is paying a contractor at least $600 million to keep the existing system running in the interim.
Who is leading the renewed state investigation into the project?
State Auditor Dave Boliek’s office is conducting the renewed investigation, while legislative leaders including Sen. Benton Sawrey and House Speaker Destin Hall are looking into the situation through oversight committees.