$845 million in questionable Medicaid payments identified
June 25, 2020
A newly released state audit shows $845 million in taxpayer-funded Medicaid payments have been made by the Oklahoma Health Care Authority (OHCA) to cover treatment for potentially ineligible recipients.
“Overall, OHCA does not have adequate internal controls in place to ensure compliance with federal laws and regulations that require only eligible participants receive Medicaid and CHIP benefits,” the audit concluded. “OHCA made payments on behalf of Medicaid recipients who did not meet, or may not have met, federal and state eligibility requirements.”
Payments were provided to cover individuals whose income-eligibility was never checked or whose income-eligibility was not verified as often as required to account for changes in earnings over time.
“When income is not verified, you have no idea if a recipient is eligible,” said Oklahoma State Auditor and Inspector Cindy Byrd.
In addition to raising questions about the validity of $845 million in Medicaid payments in Oklahoma over the course of one year, the audit identified at least $29.7 million in payments made on behalf of individuals who definitively did not qualify. Those payments included both state and federal funds.
The audit found the Oklahoma Health Care Authority, which administers Medicaid, has not used the full range of income-verification databases available and, as a result, often enrolled individuals in the Medicaid program based on little more than an applicant’s promise they lacked income.
The audit found many Medicaid recipients’ incomes were never checked because the Oklahoma Employees Security Commission (OESC) “is the only source of electronic wage data used to verify income” by the OHCA.
The audit notes that OESC data “only contains reported wage information from Oklahoma employers. It does not include income from self-employment, out-of-state employers, or federal employers.”
If the OHCA used income data from the Federal Data Services Hub, the agency would be able to determine income for a broader range of individuals, the audit states.
In addition, state auditors determined that the OHCA has not reviewed income eligibility as often as required by law. In many instances, the OHCA reviewed income eligibility just twice a year when quarterly reviews are possible.
In some instances, the audit indicates the OHCA took the word of Medicaid applicants who claimed to have no income at all without verifying those claims by checking appropriate databases.
In some cases, the Social Security number for a spouse was not provided, which prevented state officials from determining household income for Medicaid recipients.
“We have a large population where the income was not verified,” Byrd said.
One reason for the substantial share of recipients whose treatment was covered by taxpayers through Medicaid without proper income verification is that the OHCA has prioritized rapid payments of claims over determining program eligibility.
The audit noted that Oklahoma “is the only state to approve 100%” of applications “within 24 hours” when federal law allows up to 45 days to verify an applicant’s information.
“Utilizing additional days to verify the applicant’s information would give the state better leverage to ensure only eligible applicants are receiving services,” the audit states.
Byrd’s office conducted the audit of the Oklahoma Health Care Authority at the request of Gov. Kevin Stitt. The audit reviewed claims paid from July 1, 2018 through June 30, 2019.
“This audit is the first of its kind in the nation,” Stitt said, “and another example of how Oklahoma can lead the way on transparency and accountability in state government.”
The results of the audit come just days before Oklahomans will vote on State Question 802, which would expand Oklahoma’s Medicaid program to include up to 628,000 able-bodied adults at an additional state cost of up to $374 million.
The current Oklahoma Medicaid program, which was reviewed by the audit, covers the aged, blind, and disabled, along with some low-income pregnant women and children, but not able-bodied adults.
SQ 802, which is on the June 30 ballot, would add able-bodied citizens, primarily working-age men, to the program, based on certain income thresholds.
Even if the $29.7 million in improper payments identified in the audit are the only bad payments made by Oklahoma’s Medicaid program, and not the larger group of $845 million for individuals whose eligibility is uncertain, Stitt said $29.7 million is still “a lot of money” to the taxpayers who foot the bill. He vowed to work to ensure all tax dollars are spent appropriately.
“If it’s more than a ham sandwich, we’re going to fix it,” Stitt said. “And we’re going to make sure that we spend that money correctly.”