Ohio Medicaid director outlines $3.6 billion cost‑containment package, MiCare and hospital priorities

Director Maureen Corcoran, director of the Ohio Department of Medicaid, told the House Medicaid Committee that the governor's budget relies on program and payment reforms to contain costs and preserve services.

“This budget then contains cost‑containment initiatives totaling more than $3,600,000,000 in state general revenue funds, including revenue offsets,” Corcoran said in her opening testimony, describing a package that combines managed‑care delivery changes, pharmacy reforms and hospital financing adjustments.

The nut graf: The administration framed the package as a mix of revenue strategies and program reforms. Corcoran said the centerpiece is the “next generation” of managed care — a set of delivery‑system and payment reforms combined with the Ohio Medicaid Enterprise System (OMES) that the department says will improve transparency and enable earlier intervention on spending drivers.

Most important facts: Corcoran described three broad categories driving the budget: next‑generation managed care and IT (including the OMES claims front door and a single PBM), targeted investments in children's and maternal programs (MyCare expansion, OhioRISE, maternal health initiatives and continuous eligibility for children 0–3), and a hospital support package that retools franchise fees and state‑directed payments. She said the MyCare program — for people eligible for both Medicaid and Medicare — is being phased statewide beginning January 2026 after procurement of plans and that value‑based payment goals are part of the managed‑care changes.

On delivery and IT: Corcoran said the OMES system and the single pharmacy benefit manager have boosted visibility into claims and drug use, and that initial results include about $139,500,000 in drug cost savings and roughly $333,000,000 in administrative savings in the first two years of the single PBM's operation. She added the department has increased pharmacy dispensing fees to local pharmacies and said those fee changes direct more revenue to local pharmacies.

On hospitals: Corcoran told members the budget proposes an increased hospital franchise fee to draw federal matching funds and to support rate increases and other state priorities. She also discussed realigning state‑directed payments and adjusting how 340B reimbursements are handled to reduce lost drug rebate revenue.

Program specifics and protections: The department is proposing continuous eligibility for children 0–3 and 12‑month postpartum coverage. Corcoran said OhioRISE now serves about 42,000 young people statewide and that crisis services and mobile response are being expanded.

On the expansion population and work requirement: Corcoran confirmed a federal waiver was submitted for the expansion (Group 8) population, as required by statute tied to House Bill 33; she said the waiver and related work requirement are expected to reduce enrollment in the expansion population over the biennium and that outreach and voluntary supports have been in development for more than two years.

What's next: Committee members asked for more data on assumptions behind the budget — for example, the administration's use of the actuary's lower‑bound estimate on managed‑care savings — and for clarifications about timing and implementation details. Corcoran and budget staff offered to provide additional figures and follow‑up briefs.

Ending: The director closed by stressing stewardship and the scale of Medicaid coverage in Ohio. “I take very, very seriously the responsibility … as it relates to the 3,000,000 Ohioans, their health care, as well as the financial stewardship of this very large program,” Corcoran said before yielding to questions.