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.

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