Audit: Ohio Medicaid Trims Still Possible

COLUMBUS, Ohio—The state’s Medicaid program is inefficient and in need of a long term vision, and lawmakers and the governor have failed to make recommended changes that could have saved the state $300 million in the past two years, an audit released Thursday said.

Ohio Auditor Mary Taylor released the results of a performance audit that looked at the state’s progress in implementing 109 recommendations made in 2006 to improve Medicaid, a federal-state program that helps pay for health care for the needy and disabled.

Two years later, Taylor said, only 15 of those recommendations have been fully implemented. Another 40 recommendations are partially implemented, while 54 recommendations have not been implemented at all.

“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 in a statement. “We have provided Ohio’s policymakers with the tools, now it’s up to them to get the job done.“

State Medicaid Director John Corlett disagreed the findings and with Taylor’s premise that cost savings had been lost as a result of failing to meet the recommendations.

“Any suggestion that we haven’t focussed on cost savings is false,“ he said. The Department of Job and Family Services, where Medicaid is housed, put out its own financial document Thursday estimating that the program saved $1.4 billion in the time period reviewed.

Medicaid represents 37 percent of the state budget. Taylor said it’s even more important that the recommendations be implemented in today’s budget climate, as fewer tax dollars flow into state coffers because of the shrinking economy.

Taylor has recommended that Ohio’s Medicaid program provide generic prescription drugs more often, rather than more expensive brand-name drugs. Ohio dispenses generic drugs 60 percent of the time, while several other states - including Illinois and Kentucky - use them 67 percent of the time.

That 7 percent difference has cost Ohio $128 million each year, Taylor said.

Corlett said the state has been able to achieve deeper savings through discounts on name-brand drugs, sometimes offered at up to 40 percent off, than it would have with some generic drugs.

He said Taylor is taking the recommendations too literally and not giving Medicaid officials credit for meeting their intent in other ways.

Price reductions from generics was one example he cited. Another was a recommendation to establish Medicaid application kiosks around the state. Taylor counted that recommendation as unmet though the state has made applications available instead at all its Benefit Bank locations.

“We are making the application process much more accessible, and this is much more cost-effective,“ he said. “I can’t imagine what it would have cost to make application kiosks available around the state.“

Taylor recommended that the state institute an “e-prescribing” program in which doctors use hand-held devices to write patient prescriptions. The device can identify lower-priced generic drugs and warn doctors about potentially harmful drug interactions. Taylor said the devices could save the state up to $5 million monthly.