Friday, February 7, 2014 - 00:00

DHHS Announces Nationally Recognized Firms to Support NC Medicaid Operations

Study Identifies Forecasting Opportunities
Raleigh, N.C.
Feb 7, 2014

DHHS today announced contracts with two leading service firms - Alvarez and Marsal and Navigant Healthcare - to support the Division of Medical Assistance (DMA) as it continues its work to improve and strengthen operations of the North Carolina Medicaid program.

"DHHS and the beneficiaries we serve will benefit from the knowledge and experience these firms will bring to the states' Medicaid program," said DHHS Secretary Aldona Wos, M.D. "We have directed them to identify opportunities to deliver Medicaid services more efficiently and effectively - and be part of the solution. Our goal is to build on what works today to ensure a strong Medicaid program for the future."

DHHS also released a 2013 study conducted by Ernst & Young analyzing the DMA's historical forecasting process from end-to-end, including methodology, structure and tools. In addition to a technical analysis, Ernst & Young interviewed nearly 20 senior leaders from DHHS, the Office of State Budget and Management, and the Fiscal Research Division of the General Assembly to identify where challenges exist with the forecasting process.

"A well-managed Medicaid system must include accurate forecasting to make the most of every taxpayer dollar," said Sandra Terrell, Acting Director of the Division of Medical Assistance. "Forecasting must rely on analytics, not on intuition, to ensure the long-term sustainability of Medicaid and support our goal of a healthy North Carolina."

Highlights from the Ernst & Young study include the following recommendations (click here for the full report):

  • Separate the forecasting and budget processes. This will ensure that forecasts are a technical process based on strong analytics, which will provide the best information to prioritize and balance funding for the budget.
  • Stronger governance and structure. This will increase forecast integrity through rigorous testing and scrutiny of inputs and processes.
  • Standardized workflow. This will improve control throughout the process, producing more stable forecasting.
  • Regimented version management control. As different forecast scenarios are tested and analyzed, this will keep track of the changes being made and the reasons behind those changes.

Alvarez and Marsal will provide technical assistance to review the DMA Finance section. The Alvarez and Marsal contract will not exceed $3,250,513 and will run through January 16, 2015, with an option to extend the contract for one year. Click here for the contract.

Navigant Healthcare will conduct an organizational assessment of the DMA Program Integrity and Audit section. The contract will not exceed $487,500 and will run through January 14, 2015, with an option to extend the contract for one year. Click here for the contract.