Audit Release: Oregon Health Authority Should Improve Efforts to Detect and Prevent Improper Medicaid Payments

Report Highlights


Our audit found that Oregon Health Authority (OHA) recovery efforts are appropriate and reasonable, but the agency should strengthen efforts to detect and prevent improper payments in Oregon’s $9.3 billion per year Medicaid program. Prevention of improper payments is more cost-effective than attempting to recover improper payments. We also found that delays in processing eligibility for thousands of Oregon’s Medicaid recipients resulted in millions of dollars of avoidable Medicaid expenditures, a critical issue the agency failed to disclose until raised in a May 2017 Auditor Alert. Furthermore, OHA did not timely disclose relevant information, which impeded our audit work. OHA’s new management has been more proactive and transparent in addressing these issues.

Background

An improper payment is defined by the federal government as “any payment that should not have been made or was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements or where documentation is missing or not available.”

Purpose of Audit

The primary purpose of the audit was to determine if the Oregon Health Authority could improve processes to prevent, detect, and recover improper Medicaid payments. The secondary purpose was to follow-up on OHA’s progress to resolve issues we raised in our May 2017 Auditor Alert.

Key Findings

Within the context that Medicaid is a very complex and challenging program to administer, we found:

  1. OHA has gaps in procedures for preventing certain improper payments. Insufficient management of the agency’s processes for identifying and resolving payment and eligibility issues, prioritization of staffing resources, and efforts to address technology issues put taxpayer dollars at risk.
  2. OHA lacks well-defined, consistent, and agency-wide processes to detect certain improper payments, especially related to coordinated care. We identified approximately 31,300 questionable payments based on our review of 15 months of data. OHA needs to continue researching these claims to determine how many were improper; OHA reported that only a small percentage were improper based on preliminary research of 2,700 claims.
  3. OHA recovery efforts appear appropriate and reasonable, but may be underutilized due to OHA’s limited procedures for detecting improper payments.
  4. OHA reported completing the action plan to determine eligibility for the remaining backlog of 115,200 Medicaid recipients. Approximately 47,600 (41%) were deemed ineligible as a result, although this figure may decrease slightly through the end of November. Failure to address this issue in a timely fashion resulted in approximately $88 million in avoidable expenditures.

Recommendations

Drawing from national leading practices, our report includes eight recommendations to OHA focused on strengthening efforts to detect and prevent improper payments. Oregon Health Authority agrees with our recommendations. The agency’s response can be found at the end of the report.

Read full report here

 

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Audit Release- ODOT: The Oregon Fuels Tax System Accurately Assesses and Collects Fuels Taxes for Oregon and Local Jurisdictions

Report Highlights


The Secretary of State’s Audits Division found that the Oregon Fuels Tax System (OFTS) accurately assesses and collects fuels taxes for Oregon and local jurisdictions, collecting over $564 million in 2016. However, processes for issuing fuels tax refunds and system design flaws result in minor overpayments and reporting inaccuracies. Additionally, ODOT should enhance processes for testing system backup files, granting and monitoring user access, setting user password parameters, implementing safeguards over personally identifiable information, and identifying security weaknesses.

Read full report here.

Background

In 2013, ODOT contracted with Avalara to implement a new fuels tax system for $2.8 million, replacing an outdated paper based system previously used to handle Oregon Fuels Tax returns.

Purpose

The purpose of our audit was to review and evaluate the effectiveness of key general and application controls that protect and ensure the integrity of the Oregon Fuels Tax System and its data.

Key Findings

1. OFTS accurately calculates, assesses, and collects fuels tax for the state of Oregon and local jurisdictions, but manual processes governing refund payments should be improved to ensure accurate refund payments.
2. Application design flaws result in a small number of refund overpayments and minor reporting inaccuracies.
3. Changes to OFTS computer code are appropriately managed to reasonably ensure that the system and its data will not be compromised as the result of a code change.
4. System back-up processes have never been tested to ensure system data can be restored in the event of a disruption.
5. Security weaknesses exist in processes for granting and reviewing system access, monitoring activities of internal and third-party users with significant system access, and identifying and remediating system security vulnerabilities. In addition, password parameters should be more robust, and safeguards protecting some Personally Identifiable Information (PII) need improving.

Recommendations

The report includes nine recommendations to the Oregon Department of Transportation focused on addressing weaknesses in the refund review processes, fixing system design flaws, testing backups, and correcting security weaknesses.

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