A black mark on the state Medicaid system must be avoided at all costs. A state auditor's draft report threatens to "disclaim" the entire system, alleging the audit staff did not...

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A black mark on the state Medicaid system must be avoided at all costs.

A state auditor’s draft report threatens to “disclaim” the entire system, alleging the audit staff did not have access to all information required to vouch for the system’s accounting — an inexcusable outcome. The impacts could range from a negative effect on the state’s bond rating to the federal government requiring the $6.1 billion state Medicaid program return money or disrupt benefits.
The melodramatic escalation of disagreements between the state Department of Social and Health Services, which oversees Medic-aid, and the state auditor’s office is disgraceful.

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The draft audit lists several serious problems with the Medicaid system, including that 1.4 million pills are not accounted for at state institutions for the developmentally disabled.

State Medicaid officials acknowledge the serious nature of the problem although they say the pills were mostly over-the-counter pills and only 20 pills were controlled substances. The agency also promises to establish at two state mental hospitals the required systems to report patient abuse and to better track Medicaid patients, after some had died.

But the most serious part of the draft audit is the passage that “disclaims” the entire Medicaid system. Auditors say Medicaid staff obstructed them and denied them access to line workers; Medicaid staff said the auditors refused to use the liaison both agencies agreed would be used.

The main rub is over as many as eight audit items that center on disagreements over interpretation of federal regulations.

The unprofessional breakdown between the two agencies culminated last week when the state Department of Social and Health Services took the ill-advised step of posting the draft audit on its Web site. Officials allege the decision was a defensive move because the auditor’s office had leaked the draft to the media, which were calling with questions. Auditor Brian Sonntag denies the allegation.

Dennis Braddock, DSHS secretary, acknowledges some problems have been festering for years. Unfortunately, he seems willing to let federal officials sort out the feud — even if it means the scar of a black-mark audit and the uncertainty that comes with it.

While the federal government absolutely should be involved in clearing up such disagreements over interpretation, the state should make its own solution. The black-mark audit must be avoided at all costs.

In recent weeks, Braddock and Sonntag have met, exchanged letters and considered new protocols for how their staffs should work together in the future.

That’s not good enough. They should sit in a room with their managers until their disagreements are resolved. Gov. Gary Locke, who defended the Medicaid agency last week, should join them.