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Audit: Managed-Care Agencies Keep Too Much Profit


The state auditor says how North Carolina pays to treat the mentally ill, substance abusers and people with disabilities leaves too much money left over for regional managed-care agencies.

Auditor Beth Wood's office released a performance audit Wednesday on Medicaid rates for seven "local management entities." They're fixed monthly rates for each patient covered.

The report says while rates are "actuarially sound," the state Medicaid office should set goals for profits the entities can keep. The auditors calculate that without such standards, the entities have retained $439 million in "excess savings" over three years.

Responding to the audit, state health Secretary Mandy Cohen writes limiting savings could discourage cost efficiencies. Her department is comfortable with the current policy, which directs agencies to reinvest their savings in community health services.

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