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NC Medicaid Director Is Out Of A Job

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(Photo by John Moore/Getty Images)

(Photo by John Moore/Getty Images)

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RALEIGH, N.C. (AP) — A management shake-up within North Carolina’s health department settled Tuesday with the dismissal of the state Medicaid director, days after it became public that the government health insurance program faces a larger shortfall this year than previously expected.

State Department of Health and Human Services acting Secretary Al Delia announced several changes that left Dr. Craigan Gray out of a job. Gray has been director of the Division of Medical Assistance since 2009 and managing Medicaid.

The federal-state government health insurance program has 1.3 million enrollees — mostly poor children, older adults and the disabled — and is expected to spend more than $12 billion this fiscal year.

Department Chief Deputy Secretary Michael Watson will succeed Gray, whose last day was Tuesday. Beth Melcher, assistant secretary for mental health, developmental disabilities, and substance abuse services development, will replace Watson as chief deputy.

The Legislature and Gov. Beverly Perdue’s administration agreed last month on how to fill a $200 million shortfall for Medicaid. Delia disclosed late last week that a bump in provider claims would require an additional $75 million.

Department spokeswoman Chrissy Pearson said Gray was not replaced because of the higher-than-expected shortfall but because Delia wanted someone with a different perspective in the post. Gray didn’t immediately return a phone call or respond to an email from The Associated Press seeking comment, but he told WRAL-TV his departure had to do with Medicaid fiscal issues.

“I was dismissed because the Medicaid program had a budget shortfall,” Gray said.

According to Delia, the changes came after a careful evaluation of the department. The state’s portion of the Medicaid bill — nearly $3 billion — is 15 percent of the state budget for the year ending June 30.

“Medicaid is not a stand-alone division. It touches not only multiple (department) divisions but also plays a huge part in shaping the state budget,” Delia said. “We need better communications and stronger oversight of this $12 billion program. I believe these changes will accomplish that.”

Legislative leaders who have been struggling with Medicaid expenses amid a poor economy and sagging revenues said they supported Delia’s decision to remove Gray and other changes with the shake-up. The Medicaid program faced a $600 million shortfall during the fiscal year ending June 2011.

Gov. Beverly Perdue’s administration and Republican lawmakers exchanged blame for the current year’s shortfall before reaching an agreement to eliminate the gap using unexpected tax collections and several pots of state funds.

“We need to move forward with a director who can work more cooperative and productively with the General Assembly on the challenging issues we face with Medicaid,” said Rep. Nelson Dollar, R-Wake, co-chairman of the House Appropriations Committee.

The department said the state Medicaid director’s post now will become a member of the department’s executive leadership team for the first time. Melcher will keep a portion of her former duties but others will be handled by other staff, Pearson said.

John Dervin, the secretary’s senior policy adviser since March, will now take the newly-created position of chief of staff.

Gray, who worked at a Kentucky hospital before becoming Medicaid director, made $270,000 annually. Salaries for Watson ($160,000), Melcher ($141,797) and Dervin ($84,000) won’t change in their new roles.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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