Oversight of the state\u2019s Medicaid program is well equipped to protect against fraud, and safeguards are in place to detect and prevent waste and abuse, state officials told North Carolina lawmakers at a hearing on Thursday.\u00a0<\/p>\n
The message comes amid a standoff over funding for the program, which provides healthcare to 3 million low-income and disabled North Carolinians. Democratic Gov. Josh Stein says lawmakers need to approve more funding for the program to survive. Lawmakers say the program needs to be managed better.<\/p>\n
North Carolina Attorney General Jeff Jackson and the state\u2019s top health official, Dev Sangvai, began testifying under oath Thursday to a legislative oversight committee on the state\u2019s efforts to uncover and prosecute Medicaid fraud.<\/p>\n
The committee is being led by Republican lawmakers. Jackson is a Democrat. And Sangvai, the head of the N.C. Department of Health and Human Services, is a top advisor to Stein.<\/p>\n
During Thursday\u2019s hearing each side cited different statistics that they claimed back up their opposing views. Jackson said North Carolina ranks eighth nationally in terms of the total amount of money clawed back money from fraudulent doctors and other providers, and fourth nationally when compared to the size of his staff running those investigations. He noted that he\u2019s asking lawmakers for an extra staffer in the upcoming budget to bolster those investigations.<\/p>\n
\u201cThere is no question that North Carolina is punching way above its weight,\u201d Jackson told lawmakers. \u201cWe are nationally regarded as one of the finest and most effective Medicaid Fraud Investigation divisions in the country. Our leader Eddie Kirby, who’s here with me, has done exclusively this work for 15 years.\u201d<\/p>\n
Rep. Mike Schiezelt, R-Wake, said the numbers he\u2019s looking at paint a different picture. North Carolina has collected on just 1% of the money courts have ordered fraudsters to repay, Schietzelt said.<\/p>\n
Jackson acknowledged that the state does sometimes struggle to collect on repayments. He said that\u2019s because it\u2019s winning criminal cases, rather than just civil cases, and sending the fraudsters to prison \u2014 making it harder to collect the money. Schietzelt, however, countered that he\u2019s seen data showing most states nationwide win more criminal convictions for Medicaid fraud than North Carolina does.<\/p>\n
Rep. Grant Campbell, R-Cabarrus, later interjected to say that while his fellow Republicans and the Democratic officials they\u2019re grilling won\u2019t agree on everything, he\u2019d like to believe they\u2019re taking the legislature\u2019s concerns seriously.<\/p>\n
\u201cCan we at least all agree that there’s much more that we can do, to ensure this money is being used appropriately?\u201d Campbell asked.<\/p>\n
Jackson agreed and pointed to North Carolina\u2019s work with new data-mining technology. Only a few other states have begun using it, he said, but he believes it\u2019s the way of the future. The state can use computer programs to analyze massive troves of data, and identify issues at a granular level \u2014 such as whether certain providers are charging more than others for specific billing codes, which could be an indication of fraud.<\/p>\n
Campbell had cited a case in which a health care provider claimed a professional credential in \u201cthugology\u201d and another case in which a clinic had suspiciously boarded up windows, asking whether Jackson and Sangvai were bothered by those examples, and whether it might indicate fraud. Jackson told him none of that is evidence that would hold up in court.<\/p>\n
The data-mining project he wants lawmakers to provide extra funding for, he said, produces actual evidence.<\/p>\n
\u201cNone of that would survive a grand jury,\u201d Jackson told Campbell. \u201cI’m not telling you that you can’t get a conviction based on that. You can’t get a charge. I’m telling you how we can get charges. The way we can get charges is by investing in data-mining, so that I can show a grand jury telltale signs of up-coding and phantom billing.\u201d<\/p>\n
\t\t\t\t\t\t\tNC\u2019s Medicaid struggles<\/p>\n
North Carolina\u2019s Medicaid program is projected to run out of money this year unless state lawmakers pass a new budget for the current fiscal year, which is nearly over.<\/p>\n
\u201cWe will run out of money \u2026 in May,\u201d Sangvai said. The legislature is scheduled to return to session April 21.<\/p>\n
North Carolina doesn\u2019t enter a government shutdown when there\u2019s no new budget; it simply keeps operating on the old budget. That means Medicaid in 2026 is still running on a budget from 2024. In the meantime North Carolina has been among the fastest-growing states in the nation, and inflation has continued to rise. Both factors have driven up the cost of Medicaid.<\/p>\n
But some lawmakers believe population growth and inflation aren\u2019t the only factors to blame. They raised concerns Thursday that the Stein administration\u2019s DHHS isn\u2019t doing enough to catch or prevent fraud in the Medicaid system, and that Jackson\u2019s office isn\u2019t doing enough to prosecute fraudsters.<\/p>\n
Jackson told lawmakers ahead of the meeting that he shares their distaste of fraud and stands by his record. \u201cWe are completely aligned on this: There is no acceptable level of fraud in North Carolina,\u201d Jackson wrote to the committee<\/a> ahead of Thursday\u2019s hearing. \u201cWe must fight it aggressively, everywhere.\u201d<\/p>\n The state\u2019s fraud-fighting efforts are partially funded by the federal government, and Jackson said that for every $1 his office receives in federal assistance, it wins back $6.28 from fraudsters \u2014 making it one of the highest recovery rates in the country, Jackson says.\u00a0<\/p>\n Stein has said the program will soon run out of money unless state lawmakers give it an additional $319 million. That\u2019s part of a $1.4 billion spending proposal<\/a> he laid out last month, in advance of the legislature returning to session next week.<\/p>\n Republican state lawmakers \u2014 reluctant to continue funneling more and more money into the program, particularly as state revenues are expected to soon begin shrinking for the first time in years <\/a>\u2014 have criticized the state\u2019s administration of Medicaid in recent years under Stein and former Democratic Gov. Roy Cooper.<\/p>\n House Speaker Destin Hall told WRAL in an exclusive, wide-ranging interview<\/a> last month he expected the legislature would \u201cprovide some additional funding\u201d for Medicaid in the upcoming session, but he indicated that lawmakers are going to want to see more out of DHHS in combatting fraud. He also expressed skepticism that the state is doing as much as it can to find and expel ineligible people from the Medicaid rolls.<\/p>\n \u201cWe’ve got to also provide some oversight,\u201d Hall said. \u201cThe Medicaid costs in this state are out of control. We’ve seen some other states where massive fraud has gone on. North Carolina has a 99% renewal rate for folks on Medicaid. It’s basically impossible to get off Medicaid in this state.\u201d<\/p>\n Campbell also raised concerns Thursday with the small number of people who get kicked off Medicaid, saying he believes DHHS has \u201clittle to no oversight for confirmation of [income] eligibility.\u201d<\/p>\n Sangvai said that during the Covid-19 pandemic, the federal government ordered states to stop looking into Medicaid recipients\u2019 eligibility, to avoid kicking people off their health care during that period. But now he said the state has gone back to checking eligibility, and that in general around 5% of Medicaid recipients are kicked out of the program every year due to their income rising, or otherwise becoming ineligible.<\/p>\n He added that the main work on that happens not in state government, but at the county level. And the same county officials in charge of running those numbers, he said, are also in charge of handling child abuse investigations and other important work. \u201cI don’t have to remind anyone that the counties are facing some of the same challenges we are, in terms of labor, workforce, demand on time,\u201d Sangvai said.<\/p>\n In multiple legislative oversight hearings this year, other GOP lawmakers have alleged that health care providers \u2014 particularly in the autism field<\/a> \u2014 are billing Medicaid for fraudulent services or amounts, and that the state isn\u2019t catching the fraud.<\/p>\n Sangvai has pushed back against such claims in those previous meetings, and he did so again Thursday.<\/p>\n In 2025 the state received 386 credible allegations of Medicaid fraud and investigated every single one, and there have been dozens more investigations launched so far in 2026, he said in written comments submitted ahead of Thursday\u2019s hearing. Sangvai added that 91 cases are currently under investigation by Jackson\u2019s office for civil or criminal penalties, and another 22 are still being reviewed for possible action.<\/p>\n