By Jeff Manning and Hillary Borrud

Oregon has determined it awarded Medicaid health benefits to more than 37,000 people during the past year who earned too much money or otherwise failed to qualify, new figures show.

That high number represents nearly half the Medicaid recipients whose incomes the state rechecked this spring and summer. It has come to light as the state health authority works through a backlog of eligibility checks caused by technology problems and the spike in enrollment under the Affordable Care Act.

The count surpasses predictions to the Legislature by agency director Lynne Saxton, who pegged the number at 32,000. And it almost certainly will climb higher, as the agency has another 31,000 cases still to check.

Historically, around 28 percent of Oregonians on Medicaid no longer qualify for the program at annual check-ins. Now, as Oregon works through its backlog, the rate of people being deemed ineligible is closer to 45 percent.

State officials said they will not know why the rate has soared until they complete the work.

The fact the state gave 37,000 Oregonians free health care after a June 2016 federal deadline to establish their eligibility for it means taxpayers provided as much as $191 million of benefits to people who should have been disqualified. That's on top of the hundreds of millions of dollars Oregon has spent on failed and disappointing health care-related information technology projects.

That $191 million sounds like a lot of money, but it's a small fraction of the more than $7 billion annual cost of Medicaid in Oregon. The federal government pays about 75 percent of the tab.

State officials say the U.S. Centers for Medicare and Medicaid gave them approval to keep Oregon recipients on the program until their qualifications were checked. But a Republican lawmaker from Roseburg said the state may be at risk of having to pay back some federal funds spent since Oregon blew the 2016 deadline.

"There is so much waste, it's just unacceptable," said Cedric Hayden, a Roseburg dentist and Republican lawmaker. "We're at about $700 million now in IT contracts. I am a strong supporter of Medicaid and the Medicaid expansion. But at some point, the feds will come in and say, 'Uhh uhh. We're not going to do this anymore.'"

Robb Cowie, communications director for the Oregon Health Authority, said it would be unprecedented for the federal government to ask for its money back.

"We are not aware of any state that has been subject to a recoupment from (the U.S. Centers for Medicare and Medicaid) due to eligibility issues stemming from a technology failure," Cowie wrote in an email Thursday.

But with Donald Trump, an avowed enemy of the Affordable Care Act, in the White House, there's no telling what changes could be in store, even if Trump and his Republican allies fail to repeal Obamacare. "We're seeing the feds do lots of things they've never done," Hayden said.

Hayden is one of three House Republicans, including Rep. Julie Parrish, R-West Linn, gathering signatures to refer part of a tax plan to fund Oregon's Medicaid program to voters in January.

The health authority is scrambling to meet Gov. Kate Brown's Aug. 31 deadline for it to complete the eligibility checks. Officials have rehired nearly 200 temporary workers, just months after they were let go, and enlisted health care organizations and other community groups to do outreach with Medicaid clients. Brown set the deadline after The Oregonian/OregonLive published stories chronicling the agency's Medicaid missteps and a critical "auditor alert" issued by Secretary of State Dennis Richardson.

Lori Coyner, the agency's Medicaid director, recently left the agency. Coyner said her departure was unrelated to the agency's eligibility challenges. She said she left on her own accord and will join a consulting firm. The agency is searching for a replacement and appointed David Simnitt, its health policy director, to the Medicaid job on an interim basis.

Health authority officials would not answer a question from The Oregonian/OregonLive about the cost to boost temporary staffing. Cowie said only that the agency is using money in its current budget to pay for the effort.

With thousands more people removed from the rolls than expected, Oregon almost certainly will not have to spend as much on Medicaid as projected over the next two years. The potential savings will likely become a talking point in the campaign to put the Legislature's new tax on health insurance before voters in January.

A spokeswoman for Brown denied the lower Medicaid enrollment would have more than a minor impact on the budget.

"Any variation from the typical renewal rate is likely to have a marginal impact on the overall (Oregon Health Plan) caseload of more than 1 million members, which is projected to level out and grow slowly in the coming biennium," press secretary Victoria Nguyen wrote in an email.

Lynne Saxton, director of the health authority, trumpets the state's Medicaid operations as the height of efficiency. Oregon's network of coordinated care organizations have agreed to operate with a capped annual inflation rate of 3.4 percent, which Saxton says offers a national model for controlling health care costs. But behind the scenes, the state's health system has been far from efficient.

In just one example, the state had to process hundreds of thousands of Medicaid applications by hand because an automated eligibility system failed along with the rest of the $300 million Cover Oregon project. More than 500 temporary workers were assigned to the project. A subsequent IT system, built by consulting firm Deloitte for $166.7 million, took three years to complete and was plagued with glitches.

Medicaid is intended for people with low incomes. In Oregon, single people can earn no more than $17,000 a year and a family of four no more than $33,000.

Health authority officials insist they'll beat the Aug. 31 deadline. But to get there, Saxton has had to issue a distress call to other agencies and to the coordinated care organizations for help. More than 150 employees from the Department of Human Services are working on the project, as are about 100 temporary workers. The health authority rehired two of the temp agencies it had hired previously for the Medicaid manual enrollment.

About two-thirds of the way through the last remaining backlog, Hayden figures the final count could reach 50,000. He said the state's handling of eligibility checks just gives ammunition to Obamacare critics.

Parrish said the governor and legislative leaders ignored Republican calls to restrict the health authority's budget in light of the problems.

"Sheer incompetence has cost us hundreds of millions in Medicaid overpayments for thousands of people ineligible for the program, jeopardizing the health care for those who actually are qualified to receive it," Parrish said.

--Jeff Manning and Hillary Borrud