AUDIT PURPOSE

In Oregon, over one million individuals have Medicaid coverage. Medicaid expenditures totaled $9.3 billion in fiscal year 2016, including $1.2 billion in state general funds. We conducted this audit to determine if two critical automated computer programs managed by the Oregon Health Authority accurately verify Medicaid client eligibility and accurately issue payments to healthcare providers. If these programs do not function properly, clients may inappropriately receive, or be denied, Medicaid benefits.

FINDINGS IMPACT

Manual input errors and lack of monitoring of overrides can cause inappropriate eligibility determinations and payments to providers. If agency leadership implements more effective monitoring of caseworker eligibility overrides and improves manual input accuracy, the state will better comply with eligibility requirements and increase accuracy of payments. Inaction will allow overrides and manual input errors to continue causing inappropriate payments to providers.

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KEY FINDINGS

  • Two critical automated computer programs appropriately determined eligibility, enrolled Medicaid clients in coordinated care organizations, and made appropriate payments to those organizations based on eligibility information received.
  • Automated computer processes appropriately validated the Social Security number and citizenship status of applicants over 99.7% of the time in our review of over 425,000 records.
  • We reviewed 30 eligibility determinations and found seven (23%) had manual input errors. While only one error resulted in a client being determined eligible when they were not, each of the errors related to application information that could have resulted in inappropriate eligibility determinations.
  • Although their volume has significantly decreased over time, overrides of eligibility are not sufficiently monitored, meaning unauthorized overrides of Medicaid eligibility could occur.
  • Our review of 72 overridden eligibility segments showed caseworkers did not take proper action to clear 25 (35%). Overridden segments are not subject to automated processes that redetermine eligibility for certain clients.
  • Our 2011 audit recommendations to OHA and DHS concerning access to the Medicaid Management Information System have not been fully implemented, increasing security risk.

RECOMMENDATIONS SUMMARY

  • OHA should continue efforts to improve caseworker manual input accuracy through additional training, and implement a review process for input where errors negatively affect eligibility determination.
  • OHA managers should monitor eligibility overrides to prevent unauthorized validation and ensure state resources are spent appropriately.
  • OHA and DHS should fully implement our 2011 audit logical access recommendations.