Ohio State Auditor Warns of Medicaid Fraud at Capitol Hearing
During a hearing at Capitol Hill, Ohio State Auditor Keith Faber raised alarms about extensive Medicaid fraud in the state, claiming billions have been lost due to inadequate program controls. He pointed out that the system allows ineligible individuals, including deceased persons and those enrolled in several states, to exploit the benefits. In 2020, alone, over $455 million was distributed to those who did not qualify. Faber emphasized the need for immediate actions to curb further taxpayer losses.
On Wednesday, the Ohio Legislature approved an $875 million funding package after the Ohio Supreme Court determined that the state had incorrectly calculated certain Medicaid reimbursements for nursing homes. This miscalculation led to hundreds of millions in deficits for healthcare providers.
The funding is tied to a budget amendment currently awaiting Governor Mike DeWine’s approval and aims to resolve ongoing disputes about payments to skilled nursing facilities dating back to the 2024-2025 budget cycle.
“This situation is truly outrageous, especially for those dedicated to improving the lives of seniors,” noted State Representative Jean Schmidt. “Today, we take steps to amend that wrongdoing.”
A ruling from September 2025 revealed that state officials had erred in the methodology used for specific Medicaid quality payments, causing significant underpayments to nursing homes. The court mandated a recalculation of the amounts owed to providers.
Ohio House Republicans have initiated a special committee to probe into $250 billion in suspected Medicaid fraud within the state.
Lawmakers’ proposed solution surpasses the amounts highlighted in the court ruling, allocating $875 million to address the disparities, which includes approximately $310 million from state funds and $565 million from federal sources.
The state compensates nursing homes based on a daily rate for Medicaid residents and provides extra payments for facilities meeting specific quality benchmarks. However, nursing home operators contend the state neglected to factor in the complexity of their residents’ medical needs when determining payments, resulting in lower reimbursements for those caring for seriously ill patients.
While lawmakers have adjusted the reimbursement formula, the state still holds responsibility for covering payments from previous budget periods.
A federal judge recently halted an initiative from the Biden administration aimed at mandating staffing levels in nursing homes.
As the legal proceedings continued, the financial implications intensified. Ohio Medicaid indicated in a legal filing that the new calculations resulting from the court’s decision could lead to an approximate $285 million annual cost increase for the state, potentially reaching nearly $1 billion across two budget cycles.
According to the law, providers receiving funds must agree to waive any future legal disputes related to the challenged formulas.
Scott D. Wiley, CEO of the Ohio Medical Association, has urged Governor DeWine to promptly sign the bill into law. “These funds are essential for Ohio’s healthcare providers and their families,” he stressed.
