Ohio’s Apparent Medicaid Fraud Is Exactly Why Congress Must Increase Medicaid Scrutiny
Think a Republican-controlled state does a good job making sure that only eligible individuals receive Medicaid? Think again.
That’s the summary of an investigation launched by Ohio state Rep. Mike Dovilla, R-Berea, into the Buckeye State’s Medicaid program. Based on his responses received thus far, the state may not check eligibility for all Medicaid recipients, and some ineligible individuals may be receiving benefits. And of course, the bureaucracy doesn’t want to do much of anything about it.
It’s the latest example of why Congress must reform the Medicaid program, because states have shown little incentive to do so of their own accord.
Asset Tests
On April 10, Dovilla sent an oversight letter to Lexis-Nexis, which performs some eligibility checks for the Ohio Medicaid program. The response he got back on April 25 included some unsettling facts. For starters, Lexis-Nexis checked the eligibility of only an estimated 56 percent of traditional Medicaid populations in 2023.
As background, traditional Medicaid populations are subject to an asset test that limits their possessions to $2,000, with various exceptions. Obamacare did not apply the asset test to the able-bodied population when it created Medicaid expansion, so the test is required only of the populations for whom Medicaid was originally designed — aged, blind, and disabled (ABD) populations.
Yet the state only applied eligibility checks to just over half of this population, and nearly a third of those tested (29 percent) exceeded eligibility thresholds. A total of 3,806 participants checked reported assets of over $100,000, with a dozen reporting assets of over $1 million.
To be sure, having verified assets in excess of the $2,000 threshold does not necessarily make one ineligible, as those assets could fall into one of the exceptions. And as the Ohio Department of Medicaid noted, some individuals qualify for Medicaid on the basis of their participation in the Supplemental Security Income (SSI) program, in which case the Social Security Administration, which implements SSI, would verify their assets and eligibility.
But the sums involved are sizable. Dovilla estimated that, if “20% of beneficiaries exceed income and asset limits across the [entire Medicaid program’s] estimated three million enrollees, the total potential waste may top $6 billion or more annually.”
Asleep at the Switch?
And the response Dovilla received from the Medicaid director appointed by Ohio Gov. Mike DeWine proved far from reassuring. It fobbed responsibility for conducting eligibility checks off on county caseworkers — a classic example of bureaucracy “passing the buck.” While it noted that caseloads declined by a total of 306,553 since the end of the Covid public health emergency allowed the state to resume culling ineligible individuals from its rolls, it could not say why people were removed (e.g., how many violated the asset test, how many had income growth that made them ineligible, how many obtained coverage elsewhere, etc.), or even the number of people found ineligible at the time of application versus people removed after they had already enrolled.
And yet, given the Medicaid agency’s inability to respond substantively to basic statistical questions about who was found ineligible and why, the Medicaid Director closed the letter thusly:
Given recent policy proposals [our Department] has received through the Legislature, we are advising patience and caution. This and other policy considerations risk putting the cart before the horse given ongoing discussions at the federal level around the Medicaid program. [The Department] is tracking federal action to understand if and how any changes may impact Ohio’s Medicaid program. To ensure effective and efficient use of taxpayer dollars, we want to minimize the risk of inadvertently creating waste should Ohio pre-empt forthcoming federal decisions.
Translation: Let’s not go nuts and make sure everyone on Medicaid actually belongs on the program…
Need for Federal Oversight
The series of letters demonstrate how states have little incentive, and take little initiative, to verify eligibility and fight fraud in their Medicaid programs. As noted above, the asset test only applies to the traditional Medicaid populations, for which states have to pay between 23-50 percent of the cost. (Ohio will pay roughly 35 percent for this fiscal year, which ends on Sept. 30.)
That state share greatly exceeds the 10 percent share of the costs that Ohio, and other states, must pay to cover the Obamacare expansion of Medicaid to the able-bodied. (Why the federal government pays a greater share of Medicaid costs for able-bodied adults than vulnerable populations gets into a whole other series of questions.) And yet Ohio still seems uninterested in taking more steps to promote program integrity, which means Congress should do it for them.
The House-passed reconciliation bill not only requires states to pay a portion of benefit costs for the food stamp program for the first time ever, but also links that percentage to the level of improper payments found in the food stamp program. States with higher improper payment rates will have to pay a greater percentage of their food stamp benefit costs, effectively penalizing states that don’t take strong steps to fight fraud.
The Ohio example gives Congress every reason to apply a similar policy linking program integrity and improper payment rates to the federal share of Medicaid costs. Perhaps, if states knew they would have to pay the full share of any monies lost to ineligible individuals or fraud, they would get off their you-know-whats and start taking program integrity more seriously.
Jesus Christ is King
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