Ohio Medicaid report blasts Kasich administration for ‘inherited mess’

The Columbus Dispatch
By Cathy Candisky
Jan 14, 2020

In a scathing report sent Tuesday to Gov. Mike DeWine, Ohio Medicaid Director Maureen Corcoran said the agency, which oversees health care for 3 million poor Ohioans, “as we inherited it, was a mess.”

The 13-page report blasts the administration of former Gov. John Kasich, accusing it of failing to protect the privacy of hundreds of beneficiaries, erroneously booting recipients from the rolls, forcing some of the most vulnerable to seek treatment out of state, short-changing health care providers and ignoring legislative initiatives.

A spokesman for Kasich told The Dispatch that his administration had been called on to fix major problems with the program’s financial viability, which it did, and Corcoran’s team could now “build on eight years of progress.”

Among the many problems with a benefit system adopted under Kasich that the report chronicled was a glitch in which it “sometimes incorrectly links newborns to individuals who are not their actual parents. For example, we discovered an instance where the system linked a newborn to an eleven-year-old child.”

Medicaid payment-error rates of 50% found in a soon-to-be-released audit has led federal regulators to threaten the state with $6 billion in penalties. The review for the 2018 fiscal year also found a 43% error rate for determining eligibility, more than twice the national average.

“This is not personal, this is not denigrating,” Corcoran told The Dispatch of the blistering assessment. “It is about being open about realities held in secret.”

Corcoran, tapped to lead the department when Republican DeWine took office a year ago, said “the challenges” have required her to redirect “numerous resources — both human capital and financial resources — to repairing issues inherited by the DeWine administration.”

The $1.2 billion computerized Ohio Benefits eligibility system, bought in 2013, is riddled with 1,100 defects, including:

‒ Privacy violations affecting more than 700 members, including incidents in which members received mail for other members and members were able to access online portals of other members.

‒ Incorrect dates inserted for renewals, causing late renewals or in some cases failing to trigger a renewal at all.

‒ Disappearances of applications submitted for benefits, as reported by some county workers.

“This could have been prevented, or at least mitigated, had the past administration acknowledged and addressed it, rather than kicking the can down the road,” Corcoran said of the system’s propensity for errors.

The report also said Medicaid funding for in-patient addiction services was threatened by the federal government due to the state’s inability to comply with regulations.

“According to information prepared by the prior administration, this loss of funding would impact approximately 4,000 beds that are essential to helping Ohio recover from the opiate use crisis that has ravaged Ohio communities,” the report said.

Corcoran said her predecessors fell short in terms of offering adequate services to children. In 2018 and before, more than 100 children received intensive behavioral support services every day outside of Ohio because Medicaid services did not exist in the state to meet their unique and intensive needs.

Also, transitioning behavioral health services into managed care was “hasty, with woefully inadequate guidance to providers and managed care plans,” the report said, causing some local agencies to go out of business.

“In July 2018, the first month of managed care implementation, less than one-third of the normal amount of funds was paid out to community providers. The first six months of billing implementation resulted in providers being paid 43% of the dollars they were owed for services rendered during that time period.”

Roughly 700,000 Medicaid beneficiaries receive about $1 billion in behavioral health services a year.

According to the report, the Kasich administration also neglected a 2017 legislative directive to seek approval from federal regulators on work requirements for some Medicaid beneficiaries.

“The approval of the waiver did not occur until March 2019 after the DeWine administration picked up the negotiations with (the Centers for Medicare and Medicaid Services),” Corcoran wrote. “While recognizing that the federal waiver process takes time, this extended period of time of 21 months does not suggest that this was a priority.”

The report also raises questions about the Kasich administration’s effort to oversee pharmacy benefit managers hired to administer drug benefits in the managed care program in the wake of a Dispatch investigation which found two PBMs had billed the state more than they reimbursed pharmacists to fill prescriptions, pocketing the difference.

The report highlights policy initiatives by both the legislature and DeWine administration aimed at reining in PBMs, including a stricter and more transparent payment system, a plan to rebid contracts with the managed care plans that hire the pharmacy middlemen and a move to a single PBM.

A spokesman for Kasich, Jim Lynch, defending the administration’s efforts, saying that it, too, had inherited a system with major problems, in particular a $8 billion funding shortfall.

Lynch said the administration addressed those structural issues, trimming the rising costs and covering 700,000 additional Ohioans.

“The state’s leadership now has the opportunity to build on eight years of progress, further fine-tune a complex program, and reassure Ohioans that critical health care services will be there when they need them,” Lynch said.

Advocates for the poor stressed that the report did not find any wrongdoing on the part of those receiving benefits.

“This review doesn’t show that a single Ohio Medicaid beneficiary did anything wrong or was ineligible for Medicaid, and these findings shouldn’t deter anyone from signing up for Medicaid if they are eligible,” said John Corlett, president and executive director of the Center for Community Solutions.

He noted that nearly a quarter of a million Ohioans have been dropped from the Medicaid program since 2017, and most of the state’s children and uninsured working-age adults are eligible for Medicaid but aren’t enrolled.

“It’s imperative that the Ohio Benefit system be able to determine Medicaid, (Supplemental Nutrition Assistance Program, Temporary Assistance to Needy Families) and childcare benefit eligibility accurately and on a timely basis,” Corlett said.

“It’s appalling that even after Ohio spent $1.2 billion on the system,” it doesn’t work, he said.

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