Tuesday, February 1, 2011

Half-million dollar mistake

Paperwork problems in North Carolina's Medicaid program from 2004 and 2007 will cost the state $541,000 in lower federal reimbursements in the coming years. The News & Observer reports
The state owes the federal government more than $541,000 for improperly reporting how much it paid for birth control drugs under the Medicaid program.

According to a federal audit of the Medicaid family planning program, the state underreported how much it had received in drug company rebates. The federal government pays most of the state's Medicaid costs, and because the rebates were reported inaccurately, the federal government paid too much.

The state Department of Health and Human Services acknowledged that it made mistakes. In a December letter, DHHS secretary Lanier Cansler agreed to the repayment and said the problem uncovered in the audit would be fixed.
While half a million might appear to be small change in a $20 billion state budget, the amount works out to as many as 12 entry-level teachers.

Regrettably, these problems are all too common in state and local governments where individual employees have few if any incentives to actually collect money that is owed to them.