Ohio lawmakers discuss Medicaid fraud reforms, renew no-bid forensic accounting software contract

As Ohio lawmakers move to tighten Medicaid fraud loopholes, they are probing the Medicaid Fraud Unit’s continued use of the same financial software to identify potential waste, fraud and abuse.

The Ohio Controlling Board recently approved the Attorney General’s Office’s request to waive competitive selection and renew the contract with Valid8 Financial Inc. Valid8 Financial is the company behind the software, and it’s been used by the Attorney General’s Office since 2019.

With the passage of Senate Bill 315, the lawmakers pushing for reform want assurances that the state has the right tools to address fraud and strengthen oversight and accountability within the system. State Rep. Mike Dovilla, R-Berea, questioned why the Medicaid Fraud Unit continues to use the same vendor instead of seeking bids from competitors.

“Any time that there’s a waiver of competitive selection I think it gets the attention of at least certain members of the Controlling Board,” Dovilla said, per WCMH-TV/NBC 4.

Valid8 is a financial investigative and forensic accounting software platform used to assist the AGO’s Medicaid Fraud Unit in analyzing financial transactions.

“This software allows the AGO’s Medicaid Fraud special agents to quickly and efficiently analyze large financial data sets as part of investigation casework,” according to the request.

Besides making sure the state is getting the best value from vendors, Dovilla told the television station, “we’re really ramping up fraud prevention and trying to make sure we have the best tools and software in place.”

The sweeping Medicaid reform legislation includes enhanced fraud prevention and detection measures, increased penalties for fraudsters, and requires extra verification and accountability from high-risk providers. The reforms take effect on Oct. 8.

Bill Collier, finance director for the Attorney General’s Office, fielded questions from lawmakers on the Ohio Controlling Board before summer recess and said the Medicaid Fraud Unit did not want to change software when it’s still conducting 29 active fraud investigations.

The Medicaid reforms also come amid leadership changes in the Attorney General’s Office. Attorney General Andy Wilson was sworn in last month after former Attorney General Dave Yost resigned to enter the private sector and will serve out the remainder of Yost’s term.

As part of their investigations, special agents obtain bank records, patient trust accounts and other forms of financial records on a routine basis. Collier said the Attorney General’s Office may consider whether other vendors can provide better tools in the future.

“Prior to the acquisition of this software, agents would manually enter information from these records into spreadsheets to analyze it or review them by hand,” according to the AGO’s request to renew the contract with Valid8.

Collier said the Medicaid Fraud Unit has conducted 125 fraud investigations and recovered about $24 million in the seven years the Unit has used Valid8’s software.

The software has allowed for a heavier workload, with Collier telling lawmakers, “Based on its efficiencies, we have been able to do a lot more cases and cut down on a lot of manual processes.”

During fiscal 2026, the software processed approximately 20,000 bank statement pages, 175,000 bank transactions, and 12,000 check images.

Lawmakers are warranted in questioning the state’s approach to fighting fraud based on Ohio’s most recent 2025 Single Audit of several federally supported programs. Auditors found issues with Ohio’s Medicaid Surveillance Utilization Reviews.

Auditors identified two significant deficiencies related to the state’s Medicaid Cluster and CHIP programs, involving third-party liability and controls against overutilization of services and excess payments.

The SUR programs are federally mandated, automated post-payment screening systems used by state Medicaid agencies to identify aberrant billing patterns and other red flags for fraud and abuse. This was a repeat finding from a previous audit.

Other lawmakers on the Controlling Board, including Rep. Bride Rose Sweeney, D-Westlake, questioned how widespread the Medicaid fraud problem actually is and suggested that it’s either overblown or the AGO is failing in its oversight duties.

Collier confirmed to Sweeney that “Our office does not turn away any cases that are referred to us,” according to NBC 4.