Colorado Medicaid not meeting federal standards, audit finds

Colorado's Medicaid program has not met federal timeliness standards for determining and redetermining applicants' eligibility, among other lapses, according to a federal audit. But state officials and the audit both note the state already has begun addressing many of these deficiencies.

Colorado has failed to meet federal Medicaid standards in eight ways, according to a Centers for Medicare & Medicaid Services audit conducted between July 1, 2010, and Dec. 7, 2010, and finalized on July 1, 2011. These include failing to determine Medicaid eligibility for nondisabled applicants within 45 days and for disabled applicants within 90 days, terminating Medicaid coverage during eligibility redeterminations, and not allowing applicants a reasonable period to provide citizenship documentation. The report found that approximately half of all applications had not been processed in time.

CMS may consider withholding federal Medicaid funding if the state does not correct all of the problems within two years, according to the audit, which was presented during an Aug. 22 hearing of the Colorado Legislative Audit Committee. The bipartisan panel has eight lawmakers -- four each from the Colorado House and the Colorado Senate.

Colorado has persistent problems with its public health insurance programs' computer systems, said Gretchen Hammer, MPH, executive director of the Colorado Coalition for the Medically Underserved. "Families, providers and community-based organizations are frustrated and actively working with the state to get these issues resolved as soon as possible."

State Medicaid officials responded in the audit that securing funding for all of the required upgrades could be difficult. Also, the state has been overwhelmed by new Medicaid enrollment.

"Double-digit annual growth rates in the last three years have put increasing pressure" on the Dept. of Health Care Policy and Financing, the state said in response to the CMS audit. Medicaid enrollment in the state has increased by 41% since fiscal year 2008 to reach 553,000.

However, CMS is requiring the state to correct all of the deficiencies identified in the audit no matter the available funding.

A number of remedies are in progress or finished, according to the state response to the audit. These include installing a system to verify applicants' citizenship, implementing express lane eligibility with the help of a $42 million CMS performance bonus payment received in 2009, and upgrading the state's web application portals.

In August, the state processed more than 81% of its new Medicaid applications and more than 64% of its redeterminations on time, according to Joanne Zahora, spokeswoman for the Colorado Dept. of Health Care Policy and Financing, the state's Medicaid agency.