In North Carolina, Medicaid is far more than a budgeting line item; it is the health-care lifeline for millions of families, children, older adults, and people with disabilities. Behind that lifeline, however, sits a computer system that has become a symbol of frustration, missed deadlines, and mounting costs. For years, state officials have been trying to modernize the technology that processes Medicaid claims, enrolls beneficiaries, and helps detect fraud and waste. Now, after a hidden audit resurfaced and explosive whistleblower allegations were unsealed in federal court, state lawmakers say they are determined to find out what went wrong. State Senator Benton Sawrey, a Republican from Johnston County and co-chair of legislative committees overseeing health care and Medicaid, said he plans to meet with the North Carolina Department of Health and Human Services and the state auditor to better understand the allegations and the nearly decade-old project. “A lot changed over the past several years and just need to get to the bottom of it,” Sawrey told WRAL. “It’s hugely important. It’s imperative that we do that.” House Speaker Destin Hall is also monitoring the situation closely, according to a spokesperson. At the heart of the matter is whether North Carolina has squandered hundreds of millions of taxpayer dollars on a system that still cannot deliver, and whether state health officials misled federal regulators to keep the money flowing.
The project now under scrutiny was supposed to be a fresh start. North Carolina began planning its Medicaid system modernization in 2017, with a goal of replacing the outdated legacy system known as NC Tracks. The federal government, through the Centers for Medicare & Medicaid Services, has been pushing states to adopt a new Medicaid Enterprise System, or MES, designed to pay health-care providers faster, streamline enrollment, and give states better tools to identify waste and fraud. The promise was straightforward: a modern, efficient digital foundation for a program that touches the lives of more than two million North Carolinians. But the reality has been very different. The new system was originally supposed to be fully installed by the end of June 2024. State officials now say the remaining work will not be completed until the end of 2029. In the meantime, North Carolina is paying a contractor at least $600 million just to keep the old system running. By 2022, the state had already received $120 million in federal funds for planning and management, yet a dozen of the planned upgrades were behind schedule, according to a draft state audit produced that year but never released to the public. Federal oversight officials separately found that Medicaid services were deteriorating because of the delays. For the people who rely on Medicaid, this is not an abstract technology problem. Every month of delay means doctors and hospitals waiting longer for reimbursement, patients facing hiccups in coverage, and caseworkers wrestling with outdated screens instead of spending time helping people. The system that was supposed to make things easier has instead become a source of anxiety, expense, and uncertainty.
The situation became even more serious in recent days when allegations from people connected to the project were unsealed in a now-dismissed federal lawsuit. Former North Carolina government workers alleged that top state health officials used false information to secure federal funding for the Medicaid technology overhaul. The whistleblowers also claimed that federal regulators kept approving funds for the state even though they lacked key information that would normally be required before approval. These are serious accusations, and even though the lawsuit was dismissed, they have reignited questions about how decisions were made and whether anyone was held accountable. For lawmakers, the unsealed allegations are a reason to pause and look backward before spending more money on a project that has already consumed enormous resources. Sawrey emphasized that the legislative oversight committee has the authority to obtain documents and compel testimony from state officials and employees. That power matters because much of what has happened has remained hidden for years. The draft audit from 2022 was never made public, and it took a court case and investigative reporting to bring the concerns to light. The whistleblowers’ accounts paint a picture of a project where internal warnings were ignored, where timelines slipped silently, and where the pressure to secure federal dollars may have led to corners being cut. Whether those allegations are ultimately proven or not, they have shattered the sense of routine confidence that North Carolina taxpayers might have had in the state’s handling of Medicaid technology. People want to know that public money is being used honestly and effectively, and these allegations suggest that may not have always been the case.
State officials, for their part, defend the work that has been done. A spokesperson for the North Carolina Department of Health and Human Services said the department has addressed concerns from five years ago regarding the transition from NC Tracks to the Medicaid Enterprise System. The spokesperson described the new system as being implemented through a phased approach that was recommended and approved by CMS and funded in stages by the General Assembly. “We are committed to delivering high-quality care while responsibly managing public resources,” the statement said. “Protecting the integrity of NC Medicaid is essential to both safeguarding taxpayer dollars and protecting the live saving care people depend on in North Carolina.” But the department declined an interview request on Friday, and the renewed investigation by the state auditor suggests that not everyone is satisfied with those assurances. State Auditor Dave Boliek’s office is now in the information-gathering and analysis phase of a renewed investigation into the project. Randy Brechbiel, a spokesperson for the auditor’s office, said the team is working to understand what parts of MES have been implemented, what remains to be completed, how much has been spent to date, and what the timeline and plans are for finishing the program. The auditors are also looking at how the delays may be affecting Medicaid operations, providers, access to services, and the department’s ability to oversee the program, including efforts to prevent fraud, waste, abuse, and improper payments. “We want to make sure the work is thorough, accurate, and supported by sufficient evidence,” Brechbiel said. That kind of scrutiny is exactly what the legislative oversight committee intends to provide as well. Sawrey said he wants to be careful, do his diligence, and fulfill the committee’s oversight responsibilities. The committee exists to examine Medicaid’s budgeting, financing, administration, and operations, and it has teeth: it can demand records and make state officials appear before it. In the coming weeks and months, those powers may be tested as lawmakers try to piece together a complicated and costly history.
At the same time, the financial stakes have never been higher. DHHS leaders have gone to the General Assembly repeatedly asking for more state money to pay for Medicaid. For the 2024-25 fiscal year, the legislature provided $277 million in additional recurring funding and $100 million in one-time funding for Medicaid. For 2025-27, lawmakers provided $600 million in additional recurring funding, and then approved another $319 million in nonrecurring funding from the state’s Medicaid reserve. Agency leaders say the increases are necessary because of rising Medicaid enrollment, higher health-care costs, and changes in federal funding. But those requests land differently now, in the shadow of a technology project that has already cost hundreds of millions of dollars and still is not finished. Lawmakers are increasingly being asked to approve more money for a system that has not lived up to its promises. That financial responsibility is expected to drive much of the renewed interest in the technology project. Every dollar spent on keeping the old system running is a dollar that cannot be used to improve health outcomes, expand access, or lower costs for struggling families. In a state where rural hospitals close their doors, where mental health care is hard to find, and where health disparities remain deeply entrenched, Medicaid funding should be a lifeline, not a sinking hole. Scrutiny of this project is not about political point-scoring; it is about basic stewardship. North Carolinians deserve to know whether their tax dollars are being used wisely, whether federal funds were obtained honestly, and whether the long-promised modern system will ever actually arrive.
Ultimately, this is a story about trust. Trust between the state and federal governments, between elected officials and the agencies they oversee, and between the public and the institutions that are supposed to protect them. The Medicaid technology overhaul was never just a software project. It was a promise that the government could use modern tools to serve people better, to make health care more accessible, and to act as a responsible guardian of public money. That promise has been broken many times over the past several years, and now the work of repairing it begins with the truth. The unsealed allegations, the revived audit, and the commitment from legislative leaders to dig deeper are all steps in the right direction. But they are only the beginning. What matters most is what happens next: whether the investigation leads to concrete changes, whether accountability is real, and whether North Carolina can finally build a Medicaid system that works for the people it serves. As Sawrey said, getting to the bottom of it is imperative. That is not just a political statement. It is a human one. For a family relying on Medicaid to care for a sick child, for a rural clinic waiting for reimbursement so it can pay its nurses, for an elderly person trying to understand a confusing benefits notice, the stakes are deeply personal. They cannot afford another five years of delays, another round of explanations, or another quiet settlement. They need a system that works. North Carolinians deserve a Medicaid program that is as strong and as honest as the trust they place in it. The investigation now underway is an important moment to make sure that trust is earned again.