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By Thomas Goldsmith and Rose Hoban

In 2016, the state prisons’ medical system was allowing millions to slip away by passing up federal discounts from costly inmates’ prescriptions, a legislative watchdog team observed.

Then came a pointed report from the agency, the Program Evaluation Division, that brought about a mandate for change in 2018. And legislation changing the practice resulted the next year.

Despite legislators’ agreement that the PED report was of value and their action based on it, this February, the legislature’s leadership dissolved the division, laying off its staff and suggesting that politically appointed committee staffers could do the work instead.

One of the last reports generated by the Program Evaluation Division started to look at how billions in federal CARES Act coronavirus relief dollars were spent around the state. Included in that analysis were breakdowns of allocations made to hospitals under the state’s General Hospital Relief Fund ($15 million) and the Rural Hospitals Relief Fund ($65 million). Data courtesy: PED; Map: Liora Engel-Smith

All the work is still on the legislative website, for those who know how to find it. But easy links to sharp critiques and piercing analysis of state programs is now even harder to find.

In announcing the change, Republican leaders suggested that legislators should have more input into the evaluation process, which state agencies have sometimes found lacking in including knowledge of the reasons things are done.

“The leadership of the North Carolina General Assembly has decided to end the current operations of the Program Evaluation Division and take the oversight and audit functions in a new direction, giving members more involvement in the oversight,” an announcement of the move said.

“All current study projects and inquiries are being suspended for the immediate future.”

The prison medical system research was only one of multiple health care-related studies generated by the division, which had been in existence since 2007.

Sometimes unwelcome conclusions

This year, PED had multiple health care-related tasks on its work plan, a document that had been devised with the help of lawmakers. Planned projects included tracking where $3.6 billion in funding from the federal CARES Act and dispersed by the state had gone.

And the division was in the middle of an assessment of the state’s Medicaid Innovations Waiver program, which funds services and supports for Medicaid beneficiaries with intellectual and other developmental disabilities who are at risk for institutional care.

The program sometimes counseled against state support for an initiative it was asked to assess, which happened in several recent instances for health care initiatives examined by the organization.

One such conclusion was around a proposal to make permanent a pilot overnight respite service in adult day care facilities.

“PED identified several state-run facilities offering overnight respite at substantially lower rates than nearby adult day care facilities,” a 2016 report said.

In 2017, a report found that for North Carolina schools to meet national staffing standards for school nurses could cost $79 million a year.

“Of course, with the pandemic, we’ve got kids that are coming back into school right now that have, I’m sure, been exposed to many challenges in their lives, not just health related, but emotionally emotional situations in their families, and so forth,” said Rep. Cynthia Ball (D-Raleigh) who introduced a bill to fund school nurses in 2019 and this year.

“It would have meant a whole lot to have nurses this past year.”

By this year, the estimate to place a nurse in each of the state’s schools had grown to $102 million, according to a bill filed by Democrats in both the Senate and the House of Representatives.

And a report released last year found that the NC FAST software system developed under a state contract and designed to provide integrated applications for human services programs was functional, even as it was also difficult to use. PED analysts’ top conclusion was that issues in the child welfare system were not only attributable to the software, but that lack of consistency in practice and management was a hindrance to the state’s ability to implement a child welfare case management system.

This conclusion complicated the narrative around the software package.

Other health care related reports generated by PED in the past decade include:

  • A 2019 analysis of child welfare services screening and intake services that found the county-run system lacked consistency;
  • A 2018 look at disability services in schools that found little evidence of duplication of effort among school children with disabilities who were also Medicaid recipients. The report also found that the Department of Public Instruction was not performing systematic reviews of how effective services for children in the school system were;
  • A 2016 report which found Medicaid systems for identifying waste, fraud and abuse were inadequate, potentially costing the state millions annually;
  • A 2015 report which suggested the state could save $64 million annually by moving state-supported retirees to Medicare Advantage, a move eventually taken by the state Treasurer’s office;
  • A 2014 review of the state standards for opioid prescribing which made recommendations to strengthen guidelines and drive increased use of the Controlled Substances Reporting System.

Equivalent service? 

Sen. Phil Berger, president pro tem of the Senate, and Rep. Tim Moore, House speaker, decided to discontinue the program.

Instead, if these issues are studied at all, they’ll be picked apart by staff members of a committee chaired by the two legislative leaders. The newly reconfigured Joint Legislative Commission on Government Operations will be staffed by analysts hired by members from the two political parties, according to a March report in the NC Insider, a legislative affairs newsletter.

This past week, the NC Insider reported there has not been movement on making hires to staff the replacement commission.

John Turcotte, former executive director of the program, worried that with analysts hired by the Democratic and Republican caucuses, the issues studied will turn into political footballs.

“I think that’s one thing that was driving this change, firing the PED staff, etc, because [legislative leaders] didn’t have direct control over the PED staff,” he said.

Turcotte had advised on the formulation of North Carolina’s Program Evaluation Division as it was being formed. Then he moved to North Carolina to run PED in 2007.

“In those days, you had a Democratic legislature overseeing a Democratic administration, and now we’ve got this highly partisan Republican legislature overseeing a Democratic administration,” Turcotte said.

“So I’m guessing that the whole process ends up being that much more politicized.”

Since 2007, the division had been sending investigators to look into more than 100 government functions at the official requests of state legislators.

It’s not likely that these newly hired legislative staff can achieve the same in-depth, on-site probes of state agencies achieved by the Program Evaluation Division, former state Rep. Craig Horn (R-Weddington) said in a telephone interview.

Retired from the General Assembly, Horn was co-chair for six years of the supervising Joint Legislative Program Evaluation oversight committee.

“You still have to have someone do the research,” Horn said. “Legislators are not known personally for their deep dives.

“I don’t see how this is going to save the state any money, nor in my own opinion, will it add any particular efficiencies.”

Horn wants to know who will conduct the hard research that it takes to make sure state projects aren’t spending millions unnecessarily.

Exhaustive work

A spokesman for Moore told the Associated Press that staff of joint legislative committees could make sure that state agencies provide information in full and on time. Attempts were unsuccessful to reach Berger and Paul Coble, a former Raleigh mayor who was involved in the move as director of Legislative Services.

Turcotte said its work couldn’t be replaced by committee staff or the Fiscal Research Division of the legislature. The fiscal research staff, he said, remains in high demand during, before and after legislative sessions, leaving them with no time or inclination to do field work, he said in an interview.

“They’re trying to get information from OSBM (Office of State Budget and Management) and from the agencies, and to work with the agencies and the legislators and craft a legislative version of the budget. It’s exhaustive work,” Turcotte said.

“But they don’t do statewide surveys; they don’t do site inspections. An agency might take them to one of their facilities and show them around stuff. But it’s not anything like we would do.”

Turcotte wondered what agency would do the analysis of how effectively North Carolina spent federal dollars sent to address the coronavirus pandemic in 2020. Congress passed three multi-billion dollar spending packages which totaled more than $6 billion coming to North Carolina.

In one of its last reports, PED detailed North Carolina’s spending from the Coronavirus Relief Fund created when the federal CARES Act – Coronavirus Relief Fund allocated $3.6 billion to North Carolina. That money was appropriated by the General Assembly across more than 130 state departments and divisions.

The division was able to produce a high level report on spending to counties, hospitals and other health care providers. But a deeper understanding of the spending may end up taking more time, and be more opaque, without PED’s analysis.

Thomas Goldsmith

Thomas Goldsmith worked in daily newspapers for 33 years before joining North Carolina Health News. Goldsmith is a native Tar Heel who attended the UNC-Chapel Hill, and worked at newspapers in Tennessee...