Health Reform WK-EDGE Colorado did not correctly determine Medicaid eligibility for new beneficiaries
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Tuesday, September 17, 2019

Colorado did not correctly determine Medicaid eligibility for new beneficiaries

By Nicole D. Prysby, J.D.

The OIG audit found that Colorado failed to correctly determine eligibility for beneficiaries enrolled under the ACA’s Medicaid expansion.

The HHS Office of Inspector General (OIG) found that Colorado failed to correctly determine eligibility for beneficiaries enrolled as part of the Patient Protection and Affordable Care Act’s (ACA) expansion of Medicaid. The financial impact of the incorrect eligibility determinations is estimated at $66.5 million on behalf of 85,085 ineligible beneficiaries and $26.8 million on behalf of 13,372 potentially ineligible beneficiaries (OIG Report, No. A-07-16-04228, August 30, 2019).

Audit. The OIG conducted the review to determine whether Colorado made Medicaid payments on behalf of newly eligible beneficiaries who did not meet federal and state eligibility requirements under the ACA, following the ACA’s expansion of Medicaid. The expansion included changes to Medicaid eligibility rules, such as requiring that income be calculated on the basis of modified adjusted gross income and that income be at or below 133 percent of the federal poverty level for newly eligible beneficiaries. If beneficiaries’ eligibility is incorrectly determined, payments made on their behalf would have been reimbursed at a higher rate than they should have been or should not have been reimbursed at all. The review covered 579,070 beneficiaries determined to be newly eligible for Medicaid under the ACA for whom the state made Medicaid payments from January 1, 2014, through September 30, 2015. The OIG reviewed the Medicaid eligibility determinations for a simple random sample of 60 beneficiaries classified as newly eligible.

Findings. The OIG found that Colorado made Medicaid payments on behalf of some newly eligible beneficiaries who did not meet eligibility requirements. Colorado correctly determined eligibility on behalf of 43 of the 60 beneficiaries in the sample. The remaining beneficiaries were either ineligible or may have been ineligible. With respect to the ineligible beneficiaries, the state incorrectly determined that 8 beneficiaries were newly eligible even though they did not meet income requirements and incorrectly determined that 4 beneficiaries were eligible for the new adult group when it should have enrolled those beneficiaries under a mandatory Medicaid eligibility group. The state also incorrectly classified as newly eligible one beneficiary who did not meet citizenship requirements, and determined one beneficiary to be eligible for a Traditional Medicaid group, yet incorrectly claimed the beneficiary under the new adult group rate. The financial impact of Colorado’s incorrect eligibility determinations is estimated to be at least $66.5 million on behalf of 85,085 ineligible beneficiaries and at least $26.8 million on behalf of 13,372 potentially ineligible beneficiaries.

Policies and errors. The identified areas of noncompliance occurred because Colorado did not always follow written policies and procedures when making eligibility determinations and because of system and procedural errors related to eligibility determinations, as well as human errors made by Colorado staff and caseworkers. The OIG recommended that Colorado redetermine the current Medicaid eligibility status of the sampled beneficiaries and make other improvements to the design, functionality, and accuracy of the eligibility determination system. Colorado agreed with the recommendations and said that it had already implemented the necessary changes to correct the errors. However, the OIG did not find evidence that Colorado had addressed these errors prior to the audit.

ReportsLetters: OIGReports AccessNews AgencyNews MedicaidNews MedicaidExpansionNews

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