WJTV News Channel 12 - NORTH CAROLINA: Some officials knew of Medicaid card misfire

DHHS: Some officials knew of Medicaid card misfire

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DHHS said some state employees knew about the massive privacy breach days earlier than it was reported. DHHS said some state employees knew about the massive privacy breach days earlier than it was reported.
RALEIGH, N.C. -

North Carolina health officials have clarified precisely when they first learned that cards with the personal information of nearly 49,000 children receiving Medicaid benefits had been mailed to the wrong addresses.

State Department of Health and Human Services spokesman Ricky Diaz told reporters Friday the agency first learned about the massive privacy breach the prior day. On Saturday, the agency issued a new statement saying some state employees had actually been aware of the issue days earlier.

Officials said Diaz had earlier been referring only to when "senior leaders" including DHHS Secretary Aldona Wos, learned of the problem, not the agency as a whole.

The clarification was issued after the Asheville Citizen-Times obtained a copy of an email sent Tuesday by state Medicaid eligibility chief Carolyn McClanahan informing county social service officials of the problem.

The cards were mailed Dec. 30 ahead of new federal eligibility rules starting Jan. 1 under the Affordable Care Act. The change allowed the agency to shift medical coverage for more than 70,000 children of low-income families from the state-paid NC Health Choice insurance program to Medicaid.

DHHS officials now say they first learned of the problem Tuesday after county officials informed the state people were receiving the wrong cards in the mail. The information on the cards includes the children's names, Medicaid identification numbers, dates of birth and the names of their primary care doctors — personal medical data that is supposed to be tightly protected under federal law.

The agency has thus far refused to provide any explanation for what caused the mass mismailing, saying the matter is still under investigation. New cards are being issued to the correct recipients and the agency says it will be on the lookout for potential fraud.

The first release publicly disclosing the privacy breach was emailed out Friday at 5:20 p.m., shortly after WSOC-TV in Charlotte posted a story about a mother who had received a Medicaid card for a child that was not hers.

Diaz insisted Friday that the agency disclosed the information to the public "as quickly as possible," only one day after the problem was first discovered. The new timeline raises questions about why the agency waited four days to publicly disclose the problem and why it took three days for senior leaders to learn about the issue.

The erroneously addressed cards are the latest miscue at DHHS, which has been dogged over the last year by problems that include the troubled launch of a pair of computer programs, NCTracks or NC FAST. The pricey software handling Medicaid enrollments and payments has frustrated both clients and medical providers who have gone weeks and sometimes months without receiving promised benefits or reimbursements.

The agency has also faced questions about high pay for contractors and newly hired state employees with close ties to the Republican Party. Diaz is a recent college graduate who worked as a spokesman for the GOP campaign of Gov. Pat McCrory in 2012 before landing the senior-level job of directing DHHS communications at a salary of $85,000 a year.

Wos, a Greensboro doctor and wealthy GOP donor tapped by McCrory to lead the agency, has not yet made any public statement about the Medicaid card mailing misfire.

McCrory spokeswoman Kim Genardo said the governor was first informed of the issue Thursday night. Asked about the recent problems at DHHS, Genardo made reference to issues at the agency going back to prior administrations led by Democrats, including the failed implementation of mental health reforms in 2001.

"The focus of this administration is to fix a DHHS system that's been broken for over a decade, in addition to attempting to comply with Obamacare, which this administration disagrees with," Genardo said.

Asked twice whether McCrory still has complete confidence in Wos' leadership of the agency, Genardo declined to answer.

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