Ohio's state auditor says the Ohio Department of Medicaid has spent years rebuilding its systems without an agency-wide plan to tell whether the work is paying off. The performance audit, released Oct. 15, 2026, reviewed the department's "Next Generation" overhaul. Lawmakers ordered the review in House Bill 96, the state budget.
Most coverage has focused on management. This piece looks at the findings that touch disability providers and the people they support: how quickly providers get paid, how vendor contracts are managed, and how county offices handle Medicaid eligibility.
What the audit found
The audit makes eight recommendations. These are the ones closest to day-to-day services:
| Area | Finding |
|---|---|
| Planning | ODM has no organization-wide strategic, operational or staffing plan. Auditors describe "a culture of compliance" focused on meeting minimum rules. |
| Vendor contracts | Auditors reviewed six contracts central to the overhaul. Among the contracts with cost proposals, half showed gaps between planned and actual spending that added up to more than $145 million in unplanned costs. |
| Claim payments | ODM has largely met federal deadlines for paying claims. Managed care plans and the fee-for-service claims contractor meet the state's stricter contract deadlines to varying degrees. |
| Payment data | ODM tracks payment speed in broad time bands, and most claims land in the fastest band, so slowdowns are hard to spot. Auditors also found inaccurate paid-claim counts in a workbook ODM files with federal regulators. |
| Eligibility system | Every county job and family services office the auditors interviewed reported problems with Ohio Benefits, the state's eligibility system. Auditors list more than 20 common issues. |
| Application speed | Ohio has historically missed the legal deadline for processing Medicaid applications and falls below the national average. |
| Quality checks | ODM reviews 800 eligibility cases once every three years, the federal minimum. That is less than 1% of the applications and renewals processed. |
The Ohio angle for I/DD services
The audit notes several features of Ohio's system that matter for developmental disability services:
- Fee-for-service matters most for I/DD. In state fiscal year 2025, 87.2% of Ohio Medicaid enrollees were in managed care plans and 8.1% were in fee-for-service, where ODM pays providers directly. The audit says people with developmental disabilities who need long-term care are among the largest groups still in fee-for-service. That puts the fee-for-service claims contractor, and the payment-data problems auditors found there, close to waiver providers.
- DODD pays a real share of the bill. The Ohio Department of Developmental Disabilities accounted for 11.8% of Medicaid service spending in fiscal 2025. That covers waiver services, targeted case management, developmental centers and intermediate care facilities.
- Local levies carry much of the load. The audit points out that in Ohio, local governments put more money into developmental disability services than the state does, often through county levies, which it calls uncommon among states.
Medicaid is a big part of the state's finances. The audit says the program serves more than 3 million Ohioans, spends more than $40 billion a year and makes up about 43% of the state's operating budget.
How the department responded
In a Sept. 24 letter printed in the report, ODM said it agrees that a formal strategic plan is important and called strategic, operational and staffing plans "a natural next step." The department said it has spent more than six years putting new managed care plans, a single pharmacy benefit manager, the OhioRISE plan for children and new claims and credentialing systems in place. On claim payments, it said it "agrees on the importance of detailed claims payment metrics" and will keep working on payment accuracy and speed.
A department spokesperson told the Dayton Daily News that ODM takes the findings seriously and has "undergone significant transformation" in recent years. Auditor of State Keith Faber said in a press release that his office has "sounded the alarm about Medicaid for the past eight years."
Under Ohio Revised Code 117.461 and 117.462, ODM must respond to the recommendations and report on carrying them out. The auditor's office says it will check on progress in future compliance audits.
What this means for providers and DSPs
- Payment speed is hard to measure, not proven bad. Auditors did not find a five-year trend of slower payments in the data they could check. They did say ODM's broad measures can't show smaller changes, and that more detailed public data would give providers evidence when they raise concerns about late payments. Agencies that track their own days-to-payment by plan will be better placed to use any new reporting.
- Eligibility problems turn into service gaps. County office delays, system errors and inconsistent renewals can interrupt Medicaid coverage, and waiver services depend on it. Agency staff who help people with renewal paperwork may see the effects of these problems first.
- Watch the follow-up. The recommendations on contract management, claim-payment metrics and county oversight are the ones most likely to change how ODM works with providers. ODM's progress reports will show whether that happens.
- Local funding is part of the picture. Because county levies fund so much of Ohio's DD system, local ballot results matter alongside state Medicaid management. See our coverage of the Champaign County DD levy.