Taylor Follows Up on Status of Medicaid Performance Audit Recommendations

Report finds long-term goals, priorities remain undefined

Thursday, December 18, 2008

Columbus -

Auditor of State Mary Taylor today released a progress report on the status of the recommendations outlined in the 2006 performance audit of the state’s taxpayer-funded Medicaid program. The report reveals that the program could still potentially save taxpayers more than $300 million annually.

“This report is clear: true reform is going to require a long-term, forward-thinking approach to restructure and improve Ohio’s Medicaid program,” Taylor said. “We have provided Ohio’s policy-makers with the tools, now it’s up to them to get the job done.”

As a state legislator in 2005, Taylor introduced a measure that was ultimately included in the state’s biennial budget bill directing the Auditor of State to conduct a performance audit of Medicaid.

The initial performance audit, released in December 2006, provided the incoming administration with 109 recommendations to improve Ohio’s Medicaid program and cut costs without slashing critical services. The original recommendations, if fully implemented, had the potential to save taxpayers more than $400 million.

The Medicaid status report update released today identifies 15 recommendations for improvement that are fully implemented. Another 40 recommendations are partially implemented, while the remaining 54 recommendations – totaling more than $302.8 million – are not implemented. Some key points in the recommendations reveal:

  • Medicaid lacks long-term vision
    Reorganization of Medicaid, based on a forward-thinking, long-range approach as outlined in audit recommendations 3.1, 3.6 and 3.12 could save the state $156.5 million annually.
  • The increased use of generic prescription drugs will save tax dollars
    Ohio has achieved a generic drug dispensing rate of roughly 60 percent while other states, including some of our neighbors, have achieved a generic drug dispensing rate of more than 67 percent. Because costs can be reduced at a rate of $19 million for every one percent of improvement, Ohio could potentially save $128 million annually with a generic dispensing rate of 67 percent – a number Utah, Illinois and Kentucky achieved at the 67 percent rate.
  • Full implementation of an e-prescribing program can save tax dollars
    E-prescribing could save the state as much as $5 million monthly. E-prescribing is the use of hand-held electronic devices by doctors writing patient prescriptions. It has the ability to identify lower priced generic drugs covered by Medicaid and will help warn doctors and patients of potentially harmful drug interactions. Mississippi’s e-prescribing pilot program has resulted in $1.9 million in monthly savings.  Florida has had similar success.

The report indicates that the purpose of the follow-up performance audit is to provide Ohio’s policy makers with information for use during the upcoming state budget deliberations. The recommendations outlined in the report could provide an opportunity to make the Medicaid program more efficient and effective while reducing costs and maintaining vital services for recipients.

A copy of the complete report is available online at www.auditor.state.oh.us.