Improved Administration Could Reduce the Costs of Ohio's Medicaid Program

HRD-78-98: Published: Oct 23, 1978. Publicly Released: Oct 23, 1978.

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Ohio began its Medicaid program on July 1, 1966. During 1967, the State spent $50.6 million to provide medical services to a monthly average of about 300,000 eligible individuals. In its 11-year existence, Ohio's Medicaid program costs increased tenfold, and the number of eligibles increased 143 percent. Over the same period, Medicaid costs increased about 1,500 percent nationwide.

Ohio limited many of its benefits in efforts to contain the large yearly increases in Medicaid costs, but these limitations have not always resulted in sufficient savings to balance Medicaid budgets. The State occasionally tried to temporarily cut Medicaid benefits and reimbursement rates for providers; these efforts have been only partially successful. Ohio used incorrect eligibility criteria and procedures which resulted in about 26,000 ineligibles receiving Medicaid, and many who should have been eligible were denied benefits. Reports which were used to set nursing home payment rates included unallowable costs which inflated payments to nursing homes. While the State was overpaying nursing homes for services they provided, Ohio's ceilings on nursing home payments were inadequate for the costs incurred by patients needing skilled nursing. Because of a lack of controls, Ohio paid some providers in excess of the amounts allowed for federal sharing.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The State of Ohio should revise its Medicaid eligibility requirements and determination procedures to comply with federal regulations. It should: (1) assess the usefulness of Medicaid eligibility requirements for allowable personal resources; (2) strengthen the control procedures developed to ensure correction of errors; and (3) examine the administration of Medicaid and other welfare programs by county welfare departments. The State should also: (1) improve the Medicare buy-in program; (2) improve control of Medicaid extensions for terminated Aid-to-Families-With-Dependent-Children recipients; (3) obtain federal financial participation for paid medical expenses of general relief recipients subsequently found eligible for Medicaid; (4) take action to minimize excessive Medicaid payments by establishing controls to prevent payments to practitioners exceeding the upper limits; (5) audit nursing homes where cost reports are used to develop cost ceilings; and (6) assess its audit capability to determine what it needs to comply with the federal 1980 field audit deadline.

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