Ohio auditor sounds alarm on billions in Medicaid fraud at Capitol Hill hearing
During a recent Capitol Hill session, Ohio State Auditor Keith Faber sounded the alarm on the massive financial hemorrhage caused by Medicaid fraud in Ohio, amounting to billions of dollars. Faber detailed how weak oversight within the program has permitted ineligible individuals, including the deceased and those enrolled in Medicaid across multiple states, to misuse the system. He underscored that in 2020 alone, over $455 million were disbursed to ineligible beneficiaries, calling for swift measures to curb this misuse of taxpayer funds.
In response to another issue, Ohio legislators sanctioned a payment package worth $875 million on Wednesday. This decision followed a ruling from the Ohio Supreme Court, which determined that the state had been using an incorrect formula to calculate Medicaid reimbursements for nursing homes, leading to substantial financial shortfalls for these facilities.
This financial allocation, part of a budget correction bill now awaiting the signature of Republican Governor Mike DeWine, seeks to settle a prolonged dispute regarding payments to skilled nursing facilities. This issue has been ongoing since the 2024-25 budget cycle.
State Representative Jean Schmidt remarked, “This is the most egregious thing we could have done to individuals that help our elderly live a quality, comfortable life. And today we are correcting that wrong.”
In September 2025, the Ohio Supreme Court ruled that state officials had employed the wrong methodology for calculating specific Medicaid quality payments. This miscalculation resulted in significant underpayments to nursing homes, and the court mandated a recalculation of the amounts owed to providers.
HOUSE GOP INITIATES NEW TASK FORCE TO INVESTIGATE CLAIMED $250B MEDICAID FRAUD IN OHIO
Ohio Gov. Mike DeWine poses for a group photo with the Ohio Congressional delegation after the ceremonial swearing-in of Sen. Jon Husted in the Old Senate Chamber at the Capitol on Jan. 21, 2025. (Bill Clark/CQ-Roll Call, Inc via Getty Images)
Lawmakers’ solution carries a larger price tag than the amount identified in the ruling. The package sets aside $875 million, including roughly $310 million from the state and $565 million in federal funding, to settle the issue.
Ohio pays nursing homes a daily rate for Medicaid residents and provides additional payments to facilities that meet certain quality benchmarks. Nursing home operators argued the state failed to properly account for the medical complexity of residents when calculating those payments, reducing reimbursement for facilities caring for some of the sickest patients.
Lawmakers later revised the formula, but the state remained responsible for payments tied to earlier budget cycles.
The Ohio Statehouse in Columbus. Ohio lawmakers approved an $875 million payment package for nursing homes after the Ohio Supreme Court found the state underpaid providers through a Medicaid reimbursement formula. (Maddie McGarvey/For The Washington Post via Getty Images)
The financial stakes grew as the case moved through the courts. In legal filings, Ohio Medicaid warned that recalculating the payments under the court’s interpretation could cost about $285 million more per year than lawmakers originally intended, potentially approaching $1 billion over two budget cycles.
The legislation requires providers that accept the money to waive future legal claims related to the disputed formula.
An elderly resident sits with a walker at a nursing home. Ohio lawmakers moved to correct hundreds of millions of dollars in nursing home Medicaid underpayments after a state Supreme Court ruling. (Getty Images)
Scott D. Wiley, CEO of the Ohio Health Care Association, urged DeWine to sign the bill.
“These funds are critically important to Ohio’s providers and the families they serve, and we urge Governor Mike DeWine to sign HB 479 into law without delay,” Wiley said.
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