For Immediate Release:                                                      

November 19, 2020                                                               

Report: Ohio’s Medicaid Eligibility Determination Process

Columbus – Auditor of State Keith Faber’s office today released a report that examines the Ohio Department of Medicaid eligibility determination process. Auditors looked at compliance with select requirements, barriers in the enrollment process, risk for inaccurate eligibility determinations, and payments in correlation with eligibility. The audit found significant errors including ineligible payments across the Medicaid system. Correcting these deficiencies and avoiding erroneous payments in the 27 participating counties could result in nearly $500 million in savings and potentially more statewide.

“As one of Ohio’s largest budget items, with annual spending in excess of $27 billion, any inefficiencies in the Medicaid system can quickly run up a large tab,” said Auditor Faber. “We must reduce the chance for error by streamlining and simplifying processes and ensuring accuracy in enrollment and reporting. The systemic problems we identified arose over several administrations and must be fixed now. I hope the Department and the current administration will use this report to pursue a more effective system that better serves Ohioans in need. ”

The study included interviews with Ohio Department of Medicaid staff and with the 24 county departments of job and family services and collected a sample of customers in each of the 27 counties served by these 24 county departments. The initial scope was designed to review testing controls for eligibility determinations, but after preliminary findings, the focus expanded to include the functioning of Ohio’s Benefit (OB) system.

The OB system is a centralized web-based database, initiated in 2013, used to determine Medicaid eligibility.

After interviewing staff at the county departments, one consistent theme was that the Ohio Benefits system isn’t working as intended.

“Complicated,” “inefficient,” “frustrating,” “expensive,” and “broken” are a few words used to describe the system by those who use it. Constant updates makes it difficult for the staff in the county departments to stay updated on its functionality. The Department has acknowledged the systems shortcomings.

Ohio is one of only 10 states that utilizes a decentralized county or local administered program. Ohio’s use of a county administered system necessitates that a sound training program is available that meets the needs of all county offices. County staff process Medicaid applications and renewals, conduct quality assurance activities, obtain documentation to support eligibility decisions, address complaints, provide information for appeals, and are the primary users of the OB system used to determine eligibility for Medicaid and other public assistance programs. With continuous updates and changes to the system, staff struggle to keep up with functionality.

Another identified issue related to the OB system is the overwhelming number of system-generated alerts and updates that are sent to caseworkers. The OB system generates alerts to notify a change in an individual’s circumstance that potentially affects eligibility. An example would be if income from outside sources like the IRS do not agree with the OB amounts. In State Fiscal Year 2019, there were just under 17 million alerts generated. One county reported receiving 5,000 alerts in one day, overwhelming the staff resources needed to address them. Interviews concluded that alerts were repetitive, irrelevant, and complex, and that the volume of alerts was too much to manage. Findings indicated that some alerts were overlooked due to their volume and repetitiveness.

Findings regarding the alerts have been raised by prior AOS reports. These reports have repeatedly noted that the Department does not have controls and procedures in place to monitor alerts.

The report also highlighted weaknesses in areas such as eligibility determinations, training for county staff, and timeliness for processing renewals and applications. These issues can also be linked back to the flaws in the OB system.

Errors surrounding ineligibility could be costing the state millions of dollars. In a study of 324 Medicaid customers, 41 were non-compliant and 16 of them were determined to be ineligible to receive benefits- an error resulting in improper payments of $39,135 in FY 19. Applying the error rate to the selected 27 counties, the overall potential loss is over $455 million.

Additionally, auditor’s reviewed the backlog data, highlighted as a concern by the federal agency that oversees the Medicaid program. Backlog data refers to applications and renewals that are overdue – beyond the required timeframes for processing. This was an indicator that the OB system wasn’t working effectively. The Department outlined a corrective action plan to address this problem in January 2020.

The report made several recommendations to improve efficiency and effectiveness:

• Report to stakeholders on action steps to improve the Medicaid eligibility process and system
• Evaluate the effectiveness of corrective action steps in the Department’s planned external reviews
• Improve data governance structure
• Monitor for timely and accurate processing of alerts
• Enhance OB training resources

This report was conducted before the COVID-19 pandemic. In response, states have enacted changes to eligibility and renewal determinations.

The report is posted online.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio is responsible for auditing more than 6,000 state and local government agencies. Under the direction of Auditor Keith Faber, the office also provides financial services to local governments, investigates and prevents fraud in public agencies, and promotes transparency in government.