Colo. may have to repay federal government $38M in Medicaid bonuses

The state of Colorado may have to pay back the federal government more than $38 million in bonuses it received after an audit found the state received money for enrolling kids in Medicaid who didn't qualify for the program.

The audit was conducted by HHS' Office of the Inspector General and was released last week. According to the OIG, some of the bonus payments that Colorado received from fiscal year 2010 through 2013 were not allowable in accordance with federal requirements. Specifically, the audit found the state included individuals who did not qualify because of their basis of eligibility code. As a result, CMS overpaid Colorado $38.37 million in bonus payments.

According to the OIG, the state's current enrollment should only include individuals whom the state identifies and reports as having one of three basis of eligibility codes: 4, 6 and 8, which connote "child," "child of unemployed adult" and "foster care child," respectively. The OIG's audit found the state enrolled children in its Medicaid program that fall into a different eligibility code — code 2 — for the blind and disabled, which inflated its current enrollment numbers.

Based on its findings, the OIG recommended Colorado's Department of Health Care Policy and Financing, which administers the state's Medicaid program, refund $38.37 million to the federal government.

While the Colorado state agency acknowledged that it included individuals outside of the designated basis of eligibility codes, it did not concur with the OIG's findings that it failed to comply with the federal statutory definition of "qualifying children" by including those who were blind and disabled in current enrollment data for bonus payments.

The state is asking CMS to reconsider its findings and recommendation.

After reviewing the state's comments, the OIG maintained its findings and recommendation. 

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