Ohio State Auditor Keith Faber raised significant concerns about Medicaid fraud during a Capitol Hill hearing. He revealed that inadequate program controls have led to billions in losses for Ohio Medicaid. The system has been exploited by ineligible recipients, including deceased individuals and multi-state enrollees. In 2020, over $455 million in benefits went to those not qualified to receive them. Faber stressed the urgent need for action to prevent further misuse of taxpayer funds.
Legislative Response to Medicaid Discrepancies
Recently, Ohio lawmakers approved an $875 million payment package. This decision followed the Ohio Supreme Court’s ruling that the state used the wrong formula for calculating Medicaid reimbursements for nursing homes. As a result, providers were underfunded by hundreds of millions of dollars. The package is part of a budget correction bill that will be sent to Governor Mike DeWine for approval. It seeks to address payment disputes affecting skilled nursing facilities since the 2024-25 budget cycle.
“This is the most egregious thing we could have done to individuals that help our elderly live a quality, comfortable life,” state Rep. Jean Schmidt stated, “And today we are correcting that wrong.”
In September 2025, the Ohio Supreme Court determined that state officials incorrectly calculated certain Medicaid quality payments, leading to underpayments. Subsequently, the court ordered a recalculation of owed amounts. Lawmakers’ solution exceeds the ruling’s determined amount, allocating $875 million, with $310 million from the state and $565 million in federal funds, to resolve the matter.
Addressing Nursing Home Payment Disputes
Ohio Medicaid pays nursing homes a daily rate for residents and additional payments for meeting quality benchmarks. Nursing home operators contended that the state failed to account properly for the medical needs of residents, reducing reimbursements. Although the payment formula was later revised, the state remained responsible for previous payments related to earlier budget cycles.
Long-term Financial Implications
The financial stakes increased as legal proceedings continued. Ohio Medicaid warned that recalculating payments under the court’s interpretation might cost $285 million more annually than anticipated, potentially nearing $1 billion over two budget cycles. The new legislation requires providers accepting the funds to forgo future legal claims about the contested formula.
The Ohio Health Care Association, represented by CEO Scott D. Wiley, advocated for Governor DeWine to sign the bill promptly. Wiley emphasized the critical importance of these funds for Ohio’s providers and the families they serve.