Dan Way reports for Carolina Journal:

The state’s tax-supported managed care agencies for mental health are a mess.

That’s the gist of an audit released Monday, May 6, by State Auditor Beth Wood. It rebuked the N.C. Department of Health and Human Services’ oversight of seven Local Management Entities/Managed Care Organizations. And it’s the latest report documenting major problems with the system.

Because DHHS failed to monitor the LME/MCOs according to state policies and best practices, it couldn’t ensure services were provided, costs were reasonable, and performance standards were met, among other concerns. The lack of proper reports risks a failure to detect issues that can escalate, increasing costs and jeopardizing quality of care.

“The risk to the State will increase exponentially if the Department of Health and Human Services does not take necessary corrective action to improve its monitoring of managed care organizations,” the audit report stated.

That’s because the state will shift to a managed care model for providing most Medicaid services starting Nov. 1.

Five Managed Care Organizations, formally known as Prepaid Health Plans, will integrate physical and behavioral health care with pharmacy services for most of the state’s 2.1 million Medicaid recipients. The amount of Medicaid funds provided to the MCOs will more than quadruple from $3.2 billion to nearly $13.9 billion in the next few years, the audit report stated.

DHHS Secretary Mandy Cohen agreed with the conclusions and recommendations in a letter attached to the audit report.

“The Department recognizes the need to improve our design of the oversight model for the new Prepaid Health Plans,” Cohen wrote. The Department is instituting a contract management plan that will identify each contracted service, and ensure the proper staff receive, analyze and respond to each item. The plan includes an automated tracking system to document responses.

Read more here.