A supporter wears an “I love Medicaid” button during a news conference held at Pioneer Park in Salt Lake City on May 6, 2025. (Katie McKellar/Utah News Dispatch)
Legislative auditors released a report on Thursday that had scathing findings for an office that’s been tasked with monitoring the state’s Medicaid program, saying it has “failed to provide effective oversight” of Utah’s $5 billion Medicaid program.
The Office of the Inspector General of Medicaid Services has a state-mandated mission to guard against instances of “fraud, waste, and abuse,” legislative auditors wrote in their report, but they concluded the office’s leadership has not “made adequate effort” toward those goals.
Lawmakers reviewed that audit on Thursday, when legislative auditors presented their findings to the Legislative Audit Subcommittee. Auditors had a slew of recommendations to address their concerns and improve oversight and accountability for the state’s Medicaid program.
Those recommendations included three policy options for lawmakers to consider: creating an oversight board, relocating audit responsibilities, or “dismantling the office entirely.”
The Legislature first created the Office of Inspector General in 2011 — after the Office of the Legislative Auditor General recommended its creation — to oversee the state’s Medicaid program. The legislative audit released Thursday is a follow-up to an initial audit of the Office of Inspector General of Medicaid Services that was first published in 2018, which found that the office “was not assessing risk or completing performance audits of Medicaid and managed care plans, and that the amount of taxpayer dollars recovered should be higher.”
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Since that 2018 audit, however, legislative auditors wrote in their report that the Office of Inspector General leaders have “not made adequate effort to improve office performance and oversight of Medicaid’s $5 billion budget, and a change in governance and accountability are needed to improve the effectiveness of the office.”
“Today we find that Medicaid risks continue to increase” due to the program’s growth, legislative auditors wrote in the report. “The (office) has not fulfilled its mandate for Medicaid oversight as envisioned and has not maximized its value. Therefore, this report’s finding compels us to notify the Legislature that this model for Medicaid oversight is not working and major changes are needed.”
Key findings listed by legislative auditors in their report include:
Leadership over the Office of Inspector General of Medicaid Services “has failed to adequately prioritize high-impact audits and therefore has been delinquent in fulfilling its duties.”
The office “does not conduct annual planning, limiting its ability to provide full Medicaid coverage.”
Office leadership has “provided insufficient oversight of accountable care organizations, in which other states have found concerning practices.”
The office “has failed to improve its office governance and impact.”
The office has “inconsistent performance practices and some low performance outcomes.”
The office has operated “under a limited oversight structure.”
Auditors noted that while the office “often performs audits of Medicaid policy and compliance,” like billing practices, only 20% of its audits have focused on “performance or outcomes.” That’s important, auditors wrote, because the Legislature authorized the office to “oversee Medicaid operations and funding, but this has largely remained unaddressed.”
The inspector general “should have been strategically prioritizing audits with the greatest impact on recipients and funds,” auditors wrote, like the resources they were devoting to rooting out fraud and abuse. “Not doing so has left the state open to financial exposure even after we recommended the office improve its approach to reviewing Medicaid” in 2018.
Overall, legislative auditors wrote that they believe the office’s “lack of oversight has resulted in a less efficient and effective program.”
“Utah needs an improved model for the state’s Medicaid program,” they wrote.
Auditors added that it’s “worth noting” that their report addresses concerns with “operations and prior leadership” within the Office of Inspector General of Medicaid Services.
“During this audit, the leadership team within the (office) terminated employment within the office,” they wrote. “Now a new interim leadership team is in place. This audit reviewed the timespan of office activities that ranged from 2018 to 2024, including portions of 2025, before these changes were made.”
During Thursday’s committee meeting, auditors told lawmakers the office’s previous inspector general, Gene Cottrell, resigned “basically at the end of our audit.” Currently, Neil Erickson is serving as the Utah Office of Inspector General’s interim inspector general.
Erickson said Cottrell, before he resigned, was inspector general for more than 10 years, and he led the office during and after the 2018 audit. Hired by Cottrell, Erickson has worked for the Utah Office of Inspector General since 2015, and in 2017 he was promoted as audit manager, according to the office’s website. Erickson said he was appointed by the governor’s office to serve as interim inspector general after Cottrell resigned.
Response
Erickson wrote a lengthy, 17-page response to the legislative audit, included in the audit report. He noted that as of Aug. 25, the office “has undergone a complete change of leadership; the former Inspector General and the former Deputy Inspector General have both left the UOIG.”
“As a result, UOIG has begun to navigate significant changes to its internal structure and organization,” Erickson wrote, adding that the office will “continue to identify areas of opportunity for efficiency and impact, as we seek to continue to fulfill our mandate” under Utah law.
Erickson noted in his response, however, that “as of the publication of this audit,” the UOIG had not received any documents showing the Office of the Legislative Auditor General was “dissatisfied” with the office’s response to the 2018 audit.
“Consequently, it is the belief of the UOIG that previous leadership implemented the 2018 recommendations based upon the understanding of and response to the 2018 audit,” Erickson wrote, adding that the office “believed it had demonstrated efforts to meet or exceed the actions outlined” in their response to that audit, but it also “welcomes continued collaboration” with legislative auditors to implement their new recommendations.
“It is the goal and mission of the UOIG to strengthen Medicaid Program Integrity and Oversight functions, to protect taxpayer dollars, and to mitigate risk,” Erickson wrote. “Medicaid Members and Utah taxpayers depend on the health and sustainability of the Medicaid Program.”
Erickson said the office’s staff “would be happy to meet” with legislators and other state officials to discuss the audit, their response and “any recommendation implementation.”
Erickson wrote that the UOIG agreed with most of the legislative auditors’ recommendations, but he noted that the office sees “potential challenges” from the recommendation that lawmakers “dismantle” the office and relocate its functions. He wrote that the office currently works to meet state and federal requirements for “Medicaid program integrity,” and if the office gets reallocated or dismantled, lawmakers would need to consider those impacts.
“The need for independence from Medicaid that led to the creation of the Office in 2011 also remains,” Erickson wrote, adding that relocating the office within the Utah Department of Health and Human Services “could recreate the same circumstances that resulted in the unsuccessful outcomes that originally led” to the office’s creation.
“The UOIG remains committed to incorporating best practice and increasing its effectiveness in the pursuit of identifying and mitigating risk to the Medicaid program, to Medicaid Members, and to Utah taxpayer dollars,” Erickson wrote.
He also suggested reporting directly to the Social Services Appropriations Subcommittee to “help increase the visibility of the Office and provide meaningful context” to help legislators.
As lawmakers were questioning how the inspector general’s office continued to fall short after the 2018 audit, Erickson said during Thursday’s meeting he believes the issue boils down to a “matter of interpretation.”
He said in talking with legislative auditors over the last month, the office has gained “a better understanding” of what legislative auditors expect an audit of Medicaid “accountable care organizations” — or groups of providers that work with Medicaid — should look like.
“We have a different understanding within our organization, but we want to marry that,” Erickson said. “We want to work together so that we’re able to fulfill those obligations.”