A new state audit suggests Oregon is spending tens of millions of dollars each year to fund health care coverage for people living in other states.
The review of the Oregon Health Plan, which provides free care to low-income people who comprise one out of three Oregonians, found $445 million in questionable payments between 2019 and 2022.
It's not a huge amount for a program that costs billions. But most of that money is being wasted — either by Oregon funding coverage for people who’ve left, or by other states who are paying for coverage for people now living in Oregon, according to the audit issued by the Oregon Secretary of State.
Those funds could have come in handy at a time when the Oregon Health Authority is wrestling with $260 million in unexpected costs due to higher-than-expected enrollment as well as staffing needs at the Oregon State Hospital.
Ian Green, the audits manager who oversaw the investigation, told The Lund Report that the audit “really was focused on eliminating those wasteful payments without impacting anybody's access to benefits.” Otherwise, he added, “It's just money going out the door to a (care organization that’s) not providing care to that recipient.”
The crux of the problem? People move, and they qualify for benefits in their new state without canceling their old coverage. At that point, the state where they previously lived is left paying managed care organizations to provide coverage for people who don’t qualify for care — and likely don’t use it.
Auditors took a closer look at a sample of people dual-enrolled between Washington and Oregon, and estimated that group accounted for potential improper payments of $29 million between 2019 and 2022.
Not surprisingly, the way people live plays a big role in the situation. “The lack of a permanent mailing address, the variability of living situations, and existing Medicaid residency requirements can contribute to unhoused individuals being enrolled in Medicaid in two or more states at the same time,” according to the audit.
“Our testing found instances of unhoused people living in the Portland metropolitan area that moved frequently between Oregon and Washington, sometimes within the same month. Some children may live in multiple households, spending varying amounts of time with non-custodial relatives or parents. Agency staff reported difficulty in determining where some of these children spent most of their time, also increasing the risk of duplicate enrollment in multiple states.”
The pandemic, which caused a pause on state eligibility checks, saw the number of duplicate enrollments in Oregon Health Plan rolls grow from about 8,000 to about 30,000, according to the audits division.
Poverty may also be a driving factor in what's happening. “An increased risk to the program,” according to the audit, “is the pressure recipients may feel to not tell OHA when people in their household have moved out of state, in fear that other benefits might be reduced. As Medicaid recipients do not receive funds directly or have out-of-pocket medical costs, they may not understand the magnitude of duplicate payments and the importance of notifying OHA of an out-of-state move. A transition period of 1-2 months for states to end and start coverage is reasonable, so our testing covered three or more months of duplicate enrollment to account for this transition.”
To conduct the investigation, Oregon auditors teamed up with counterparts in Washington state and the U.S. Department of Health and Human Services' Office of Inspector General.
The state report spotlighted a failure by the federal government to share information with states, and recommended improvements by Oregon officials as well. It recommended more staff for the Oregon Health Authority payment auditing office, and also that contracts with regional managed care organizations in Oregon, known as coordinated care organizations, be beefed up to ensure improper payments can be recovered.
The audit noted, “In 2023, Oregon spent more on Medicaid — also known as the Oregon Health Plan — than it did on any other area, including education, transportation, and public safety combined.”
This is a problem that would not occur if we did not use capitated managed care. This problem would be solved, and Oregon Medicaid would be much more efficient on other measures (thus saving even more taxpayer money) and work better for patients, with "managed fee-for-service" such as Connecticut has.