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New federal rules take effect Oct. 1 that end full Medicaid coverage for thousands of North Carolina beneficiaries, shifting many to more limited coverage instead of comprehensive benefits. Affected enrollees include certain populations whose eligibility category or verification status no longer qualifies them for full-scope coverage under the new requirements. Those impacted may still receive some services but will lose comprehensive coverage unless they take specific action after receiving a notice from the state. North Carolina Medicaid is directing beneficiaries to respond promptly to any notices to avoid gaps or reductions in coverage.
A newly unsealed federal lawsuit alleges former North Carolina health officials submitted false information to secure federal funding for a Medicaid technology overhaul, and that federal regulators approved the funding despite warning signs. Former state employees serving as whistleblowers brought the claims, which implicate both state Medicaid leadership and the federal approval process. The lawsuit was previously dismissed but the whistleblowers may seek to revive it. The case raises questions about oversight of federal matching funds for state Medicaid IT modernization projects.
North Carolina's state auditor is restarting a review of a Medicaid computer-system overhaul that is years behind schedule and has cost hundreds of millions of taxpayer dollars. WRAL Investigates obtained federal documents showing early warnings about the project's problems, along with a prior state audit that was never publicly released. The renewed review affects the state Medicaid agency's technology modernization effort and comes as officials face public scrutiny over cost overruns and delays. State officials are expected to respond to the findings on WRAL-TV broadcasts.
Abbott Laboratories agreed to pay $384 million to resolve federal and state allegations that it caused Medicaid to pay for contaminated infant formula prior to the 2022 recall and shortage. North Carolina will receive over $216,000 as part of the multistate settlement. The settlement addresses claims that Abbott violated the False Claims Act by distributing adulterated formula that was reimbursed by Medicaid. The case stems from the February 2022 recall of formula manufactured at Abbott's Sturgis, Michigan facility after bacterial contamination led to infant illnesses and deaths.
A North Carolina woman pleaded guilty to defrauding Medicaid of $1.7 million through fraudulent urine testing claims. The scheme involved billing for unnecessary or unperformed laboratory testing services. The case represents ongoing federal and state enforcement activity targeting laboratory billing fraud in Medicaid programs. Medicaid managed care organizations that reimburse laboratory services should review utilization patterns and billing practices for urine drug testing to identify potential fraud.
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