health care

Why Does Oregon Suck So Much at Spending Medicaid Dollars?

A new audit provides more details on the state Health Authority's waste and incompetence.

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Oregon Healthcare Advocates
Minacarson/Dreamstime

Oregon has a well-deserved reputation as a progressive state, so it should come as no surprise that the state spends a lot of money on health care for its citizens. The surprise is how increasingly wasteful and incompetent it is at that spending.

The state released an audit that found the Oregon Health Authority spent $88 million on ineligible Medicaid recipients between the months of March and September. That in addition to revelations earlier in November that OHA made $186 million in improper, wasteful, or overgenerous payments to individuals and health care providers.

The report released Wednesday adds damning details to the performance of an agency caught up in repeated scandals and leadership shake-ups over its lack of transparency and poor stewardship of taxpayer dollars. The latest audit focuses on the state's payouts to ineligible Medicaid recipients, a legacy of OHA's past IT boondoggles.

Wednesday's audit comes a little more than a month before Oregon voters will decide whether to approve a $673 million tax on health care providers to fund OHA's Medicaid program.

"The amount of wasteful and incompetent spending at OHA has been staggering and has gone on for at least the past four years," said Oregon Secretary of State Dennis Richardson, whose office conducted the audit.

Medicaid—the mostly federally-funded, state-managed health care program for the poor—comes with specific eligibility requirements (for income, residency, etc.). Following passage of the Affordable Care Act (Obamacare), Oregon had planned to verify Medicaid recipients' eligibility through something called Cover Oregon, the state's Obamacare exchange.

However, after spending roughly $300 million the state abandoned Cover Oregon in favor of the federal Healthcare.gov exchange. In addition to the wasted tax dollars, the state was without a systematic method of verifying Medicaid eligibility. Over the next three years, annual eligibility determinations were only conducted sporadically, leaving a long backlog of verifications.

Oregon spent another $116 million on Oregon Eligible (ONE) system—four times what it initially estimated—to fix the problem. ONE was supposed to eliminate the backlog by February, but did not complete the task until the end of August.

Wednesday's audit determined the delay caused the state to pay out the additional $88 million to ineligible recipients. The audit also uncovered glaring inadequacies in OHA's ability or even willingness to identify and prevent improper payments.

Declining to audit Coordinated Care Organizations (CCO)—which pass payments between the state and Medicaid providers—resulted in $74 million in overpayments to individuals who were eligible for both Medicaid and Medicare.

OHA reportedly took months to respond to audit requests that should have taken minutes, and often provided incomplete or erroneous information. Lower-level OHA staff were told not to communicate with auditors' requests directly, but instead pass information through managers.

Auditors also report OHA managers sitting in on their interviews with lower-level staff, something they said might have led staff to be less forthcoming.

During the course of the audit, Lynne Saxton, OHA's Director, was forced to resign over an unrelated scandal. Her replacement, Patrick Allen, has so far proven more forthcoming about the agency's shortcomings, revealing in a letter to Gov. Kate Brown that OHA had dispensed at least a further $112 million in improper payments on a grab- bag of programs, including $1.5 million in federal funds for abortions.

The audit comes at a time when an increasing number of national and state-level Democratic lawmakers are endorsing a single-payer health care system, in part because they will believe it will save money and reduce inefficiencies in our current health care system.

If progressive Oregon is any guide, government bureaucrats are about as good at managing a health care system as they are at pretty much everything else.

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  1. “voters will decide whether to approve a $673 million tax on healthcare providers to fund OHA’s Medicaid program.”

    so they want to tax the people that they want to help them when their sick? do they not see the irony of this and how taxing something does not make that something cheaper

  2. Why Does Oregon Suck So Much at Spending Medicaid Dollars?

    ‘Cause they’re not going out of business for sucking, so why make an effort?

  3. Wednesday’s audit comes a little more than a month before Oregon voters will decide whether to approve a $673 million tax on healthcare providers to fund OHA’s Medicaid program.

    Well, obviously the only thing wrong is that taxes aren’t high enough.

  4. The audit comes at a time when an increasing number of national and state-level Democratic lawmakers are endorsing a single-payer healthcare system, in part because they will believe it will save money and reduce inefficiencies in our current healthcare system.

    Single payer doesn’t reduce inefficiencies, it simply doesn’t care about them. There’s a critical difference. Government healthcare can run with indefinite deficits so inefficiencies become just a cost of the program at large. Single payer systems keep their costs in control by merely reducing the amount of available healthcare.

    1. Single payer saves tons of money by not giving wasteful profits to the evil rich! Besides that, it is just plain immoral to profit off of sick people, and that is exactly what the private sector does! I mean, evil rich people are making millions and millions of dollars from profits that could be used to help the sick! It’s immoral and wrong! Health care should be provided by government bureaucrats because they are free from the sin of capitalist profits! They are angels! They serve the greater good! While evil capitalists only serve themselves!

      1. You get to change your government officials every 2-6 years. Of course they’re more responsive than some evil private entity that you can fire tomorrow.

      2. Yep, it’s evil to profit off of helping sick people get better. So shouldn’t farmers be demonized for profiting from hunger?

  5. Why Does Oregon Suck So Much at Spending Medicaid Dollars?

    If progressive Oregon is any guide, government bureaucrats are about as good at managing a healthcare system as they are at pretty much everything else.

    This is the wrong question. They do and we, as a nation, can’t change it. The real question is did we, as a nation, know about this previously, and did we do anything to stupid in spite of or based on that knowledge. To which the answer(s) is(are) “Yes.”.

    If progressive Oregon is any guide, government bureaucrats can fuck up healthcare and it won’t matter one state over or the next rung up the government ladder.

  6. The surprise is how increasingly wasteful and incompetent it is at that spending.

    Well, no. It would only be a surprise if it wasn’t wasteful and incompetent. Do you happen to be aware of some state that has efficient Medicaid spending?

  7. Hey, way out here in Orygun we knew creatin’ Utopia would have a few hiccups. Please send $$$$$$ to help us find it!

  8. Well, compared to the current USA “Obamacare” fiasco, Single-payer WOULD be an improvement. That said, nothing could be better than completely free-market health care, like we have here in Mexico. Here, we have so many private doctors and clinics, that I often get second and third opinions for as little as $1.50 (buck and a half), and then proceed with my cure. Pharmacies are really cheap and competitive too.
    The USA could simply let ALL qualified doctors and nurses immigrate, and start their own private clinics–no paper-work, no long waits, just shopo around for the best care and use it!
    Like we should do for car-repair, restaurants, banks, groceries, etc.

  9. Well, if you get shot on the side of the road by State Troopers, at least you’ll be covered.

  10. This is how it works in partisan Oregon. A majority of the voters are progressive Democrat with a socialist leaning. These voters live primarily in Havana on the Willamette (Portland). Dennis Richardson is a Republican. Anything coming out of his office will be labeled as a lie against humanity, summarily dismissed, and “The People” will willingly vote a tax increase. It’s so much easier if you don’t have to think that your “side” could be screwing you. They just hope that the tax will fall on the rich.

  11. What spending by Oregon’s government doesn’t fall under the categories of waste and incompetence?

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