OHA Audit Report finds $88 million in misspent Medicaid funds

This morning, Secretary of State Dennis Richardson’s office released an audit report detailing improper Medicaid payments made by the Oregon Health Authority (OHA) in 2017. The report, entitled “Oregon Health Authority Should Improve Efforts to Detect and Prevent Improper Medicaid Payments,” was requested following an Auditor Alert released earlier this year.

On May 17, 2017, the Secretary of State Audit Division announced that approximately 86,000 Oregonians receiving Medicaid benefits had not had their eligibility status evaluated in over a year. This gave rise to the possibility that a significant number of people could be receiving Medicaid benefits they are no longer eligible for. The Auditor Alert declared they would evaluate the number of ineligible people as well as the fiscal impact this improper spending may have had.

According to the audit, the actual number of unevaluated Medicaid recipients during that time was 115,235 and 47,600 of those individuals turned out to be ineligible for the benefits they were receiving. With an average monthly cost of $383 per enrolled Medicaid client, this represents an $18 million per month loss of improper payments to ineligible recipients. The audit declares that from March 1 to August 31 2017, OHA misspent $88 million. The report also states they identified 31,300 “questionable payments,” especially related to coordinated care.

“This report documents the failure of OHA and its previous leadership to meet the federal requirements for eligibility and the wasting of hundreds of millions of dollars that could have been spent caring for Oregon’s most vulnerable citizens or educating our youth,” says Richardson.

The audit report recommends several actions to address these problems including increasing program oversight, developing efforts to ensure accuracy and completeness of data, and working with CMS to explore incentive programs to detect, prevent, and recover improper payments.

In response, the OHA stated they agreed with all recommendations put forth in the audit, however they disagreed with the audit team’s conclusions. In a press release, Laura Robison, Chief Financial Officer of OHA said,

We dispute the characterization of $88 million in payments to provide health coverage for 115,000 vulnerable children and adults as “avoidable.” (In the wake of the Cover Oregon failure, federal officials approved delaying their eligibility renewals and were regularly briefed on Oregon’s progress to renew them.)”

“We do not agree with the conclusion that the audit identified 31,300 “questionable” payments. A sample check of 2,700 of the transactions showed that more than 98 percent of these payments were appropriately paid.”

Details of OHA’s full comments on other key findings can be found here.

Robison also pointed to specific changes the OHA is already making to address these issues including a monitoring process to keep annual eligibility renewals on track and adding staff to help hold coordinated care organizations and providers accountable.

“While OHA has successfully expanded health coverage to more than 400,000 Oregonians and saved taxpayers $1.3 billion in health care costs, the effort to meet these challenges (as well as respond to the Cover Oregon failure) has not allowed us to build a foundation of consistent operational rigor and accountability in our Medicaid operations,” says Robison. “We can do better. We are making changes to improve the accuracy and transparency of our programs.”