Medicaid Shell Game Continues in Ohio

Posted by Marc Kilmer in Health Care, Medicaid, Ohio on Jun 4th, 2009 | no responses

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A previous post of mine discussed how Ohio politicians are trying to game the system to pull down more federal Medicaid funding. These fiscal shenanigans continue in the version of the budget to emerge from the state Senate. This budget imposes a franchise tax on providers that receive Medicaid funding, but it promises they won't feel any impact as their reimbursement rates will go up and they will receive a supplemental Medicaid payment.

It's a clever game policymakers are playing — impose a tax on providers in order for the state to increase its Medicaid spending. This increase will, of course, bring in more federal money. The entities being taxed, however, will see their tax money returned to them as soon as its been laundered by the state in order to get that federal money.

The Bush Administration made moves to cut down on this tpe of activity, which it placed under the category of "waste, fraud, and abuse." I've seen no indication that the Obama Administration is interested in doing the same thing. If you want to see why federal entitement spending is going up, looking at ways the government gives incentives for states to game the system is a good place to start.

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