The State of Ohio is revamping its vetting and oversight of behavioral health organizations after state and federal investigators uncovered $42 million in behavioral health-related Medicaid fraud.
During that process, the state is likely to remain at diminished capacity to process license applications for new behavioral health providers, a spokesperson for the Ohio Department of Behavioral Health told Behavioral Health Business.
However, the degree to which that slowdown will affect the approval of new providers in the state is unclear. State Rep. Justin Pizzulli (R-Scioto County) said in a statement that the department “issued a temporary freeze … for new behavioral health and rehab provider applications.”
The spokesperson for the behavioral health department did not dispute Pizzuli’s comments but would not confirm the application review freeze. Pizzuli has not responded to a request for comment.
Overall, the behavioral health department seeks to standardize and deepen grantee review and oversight. This will include an “enhanced” review process for new providers; “reinforced” renewal requirements; closer coordination with state entities, including the Ohio Department of Medicaid and the Ohio Attorney General’s Office as well as managed care organizations; and better verification of service delivery and program performance.
The release does not state when these changes will be in place.
The federal government, over the last several months, has put increasing pressure on state officials to produce results in the realm of fraud prosecutions, especially in Medicaid programs. It has also ramped up its prosecution of Medicaid fraud. In Ohio, state and federal prosecutors announced on Thursday they had secured indictments for five people accused of two separate schemes.
One group of indictments included four individuals who allegedly billed the Ohio Medicaid program out of more than $30 million. A copy of the indictment obtained by BHB states that the individuals named would partner with recreational programs like summer camps and church programs and gain access to Medicaid member numbers and then bill the program for diagnoses and services that never took place. The defendants are charged in U.S. District Court for the Southern District of Ohio.
This federal action also included a forfeiture action. This included seizing six Mercedes-Benzes, two Land/Range Rovers and six other various luxury cars, including a Maserati, Jaguar and McLaren and $470,000 in cash from various bank accounts.
The other individual is accused of submitting more than 60,000 fraudulent Medicaid claims for pediatric behavioral health services that were never provided from January 2020 to May 2026. They received more than $12 million in improper payments for services. The scheme involved children in after-school programs. State officials indicted them in the Butler County Common Pleas Court in Hamilton, Ohio, according to a press release from the Ohio Attorney General’s Office.
At the end of May, the Ohio Department of Medicaid announced a new prior authorization program for community behavioral health, mental health and substance use disorder services. Under the program, all managed care organizations will use the same authorization forms for behavioral health and substance use disorder services, change reviews to only apply to amounts exceeding “reasonable thresholds,” require more consistent services data reporting from providers, and require managed care organizations to implement value-based care and incentive programs for quality providers.
State and federal officials also announced the creation of the first-ever Fraud Division–State Partnership Roundtable. This entity will include members of the U.S. Department of Justice’s Fraud Division, U.S. Attorneys’ Offices, Ohio Medicaid Fraud Control Unit and other partners such as the Ohio Secretary and the state auditor, according to a news release. This roundtable was held up as a national model for state-federal interaction.
Specifically, the DOJ Fraud Division and the Ohio Secretary of State have a data agreement that allows the fraud division to better identify corporate entities that may be connected, get state prosecutors involved with federal strike forces and coordinate with federal efforts, and connect Ohio officials to the Health Care Fraud Data Fusion Center to refer fraudulent action.