Two-thirds of audited state Medicaid notices contained errors

Confusion feared among clients, including low-income residents and those with disabilities

By: - September 25, 2020 6:01 am

Two-month-old Karina receives drops of children’s Tylenol after getting a vaccination at Rocky Mountain Youth Clinics in 2009 in Aurora. Many of the clinic’s patients are on Medicaid. (John Moore/Getty Images)

On Dec. 19, 2019, a Medicaid client in Colorado received a notice from the state Department of Health Care Policy and Financing. The recipient was asked to provide information about the cash value of their assets — by Sept. 27, 2011.

Not only had that due date passed by more than eight years, but the department also had no reason to ask the client for this information.

That’s just one example of the 67 inaccurate or misleading notices sent to Medicaid clients out of 100 total notices examined in a recent audit of the state Medicaid program’s communications with clients.

The September report, part of changes that state lawmakers required through 2017 legislation, suggests the scope of the problem could be huge.

Between Oct. 1 and Dec. 31, 2019, the audit period, the Department of Health Care Policy and Financing, or HCPF, sent more than a million client notices to approximately 476,000 households, according to the report.

The department is currently dealing with a massive increase in the number of clients it serves. Since the onset of the COVID-19 pandemic and economic downturn, HCPF gained more than 100,000 new enrollees in Health First Colorado (the state’s Medicaid program), the Child Health Care Plus programs, and home and community-based long-term care services.

These Coloradans must prove they meet specific income limits and eligibility requirements to receive health care assistance through the state’s Medicaid program, which was expanded in 2014 following the passage of the Affordable Care Act.


Given the complicated nature of state and federal requirements, the process of obtaining health insurance through Medicaid is already difficult for eligible low-income people, many of whom have disabilities and often lack reliable internet access, transportation or even shelter.

“A lot of folks have really serious anxiety issues or they might have cognitive or learning disabilities,” said Julie Reiskin, executive director of the Colorado Cross-Disability Coalition.

Reiskin — who helped advocate the 2017 legislation that led to the audit — says many Medicaid recipients call those notices the “dreaded yellow envelope.”

When people receive inaccurate notices saying they’ve been denied coverage or missed the deadline to submit eligibility information in order to receive their health care, she said, “it’s really terrifying.”

Medicaid recipients generally work “very hard to try and do what’s right,” Reiskin said. But if a client receives a few notices with inaccurate information, they might just stop opening their mail or ignore the notices altogether — missing real deadlines to submit needed paperwork.

HCPF officials testified on the audit’s findings at a Sept. 22 hearing of the Legislative Audit Committee, where they were grilled by state lawmakers.

Rep. Tracy Kraft-Tharp represents the 29th District in the Colorado House. (

“We’re not talking about complex issues,” said state Rep. Tracy Kraft-Tharp, D-Arvada. “We’re not talking about brain surgery. We’re talking about simple clerical errors.”

She pointed out that lawmakers had already convened an interim study committee on communication between the department and Medicaid clients, leading to the 2017 legislation and corresponding audit.

“We’ve just spent a million dollars to say, ‘You’ve got to put the right date in a letter,'” Kraft-Tharp said. “So in all bafflement, how does this happen?”

“Your pressure on me is accurate,” Kim Bimestefer, HCPF’s executive director, told legislators on the audit committee. “Your interpretation is correct, but the complexities of fixing all this with the enormity of this system is tremendous.”

About half of the errors the audit identified were human errors, and the other half resulted through errors with the statewide data system that generates automated notices based on a set of around 900 templates meant to ask clients for different types of information.

That statewide system is called the Colorado Benefits Management System, or CBMS for short. It’s used to process all Medicaid applications and determine whether clients are eligible for other public benefits as well, such as food, cash and medical assistance.

Any applications completed online through Colorado’s Program Eligibility and Application Kit, or PEAK, website are “automatically transferred to CBMS,” according to the audit, which was completed by Sjoberg Evashenk Consulting. Otherwise, county caseworkers collect applicants’ information and enter it directly into CBMS — operated by a private contractor, Deloitte Consulting.

Increase in enrollment

George Skiles, principal at Sjoberg Evashenk, presented the audit’s findings to legislators. Though the sample of notices examined through the audit isn’t statistically representative of the full number of notices, it “is sufficient to tell us the nature of certain problems,” Skiles said.

While he didn’t explicitly say that the notices’ inaccuracies could have led to clients being denied health care benefits, he did mention some other problems that could result.

“Missing or conflicting effective dates could create confusion for the client, may lead the client to misunderstand an approved benefit, or may increase the likelihood that the client will call their county service center for clarification,” Skiles said.

A HCPF spokesperson later said in an emailed statement that “no eligibility determinations were impacted” by the issues brought up in the audit, because “these correspondence errors were in mailings to members already enrolled.”

For her part, Reiskin said that clients missing out on health care benefits because of such system errors happens all the time. Applicants might receive multiple notices — one saying they’d been approved for Medicaid, one saying they’d been denied. And though clients can sometimes clear up confusion by contacting county offices, sometimes “they’re too backed up,” she said, “and a lot of people … have limited minutes.”

Plus, of the notices examined through the audit, 40 notices that directed clients to contact their county offices with questions included incomplete contact information for those county offices.

Bimestefer said she and other HCPF officials had begun directly overseeing the contractor, Deloitte Consulting, that runs the correspondence system in an effort to put more pressure on the contractor to implement the changes that lawmakers are demanding.

After two years of more than an 8% decrease in our enrollment, enrollment for our programs is up more than 9% in less than six months.

– Kim Bimestefer, HCPF's executive director

While she said HCPF was serious about fixing the problem — and had already solved 42.5% of the errors — it could take until July of next year to fix all of the problems identified through the audit. At the same time, the department is facing an unforeseen surge in the number of people it serves.

“After two years of more than an 8% decrease in our enrollment, enrollment for our programs is up more than 9% in less than six months,” Bimestefer said.

Fixing some problems will require additional training for state and county employees.

For example, clients are supposed to receive notices translated into their own preferred language. But in one instance, a client received a notice in Spanish — their preferred language — that also had notes in English that were manually typed by a caseworker.

“Why does it take until July (2021) to implement some of these recommendations?” Sen. Rhonda Fields, D-Aurora, asked later. “Do you understand how critical health care is to so many people? And they can’t even rely on having accurate information? I mean, when I see these screenshots, it’s embarrassing.”

HCPF officials are in “heated negotiations” with Deloitte Consulting over the needed changes, Bimestefer said. The department will also provide new training for caseworkers on making correspondence clear and accurate.

System is ‘antiquated’

Bethany Pray, legal director for the Colorado Center on Law and Policy, believes many of the issues could be tied to a lack of state resources for Medicaid.

“Twenty percent-plus of Coloradans are enrolled in Medicaid, and the amount of funding that the state has to administer that is pretty minimal,” said Pray, whose organization has been working with HCPF and the Colorado attorney general’s office on fixing certain notices.

She said that some people who’ve been denied benefits — sometimes due to system errors — aren’t informed of the process for filing an appeal.

The current CBMS system is antiquated, Pray said, and would be “massively expensive” to replace.

“You can hold together that old system with tape and wires, which is kind of what I think we’ve done, but it’s still going to be a problem,” she said.

Reiskin, of the Cross-Disability Coalition, thinks HCPF’s process should include testing notices with real Medicaid recipients to make sure they’re understandable.

She questions why the state needed to conduct an audit to determine the extent of the problem, when advocates like her had been calling out deficiencies for years.

“The lesson in this is listen to your clients and listen to the client advocates that work directly with clients,” Reiskin said. “That’s kind of always a thing that we see, is we point stuff out and then it gets ignored for a long time, and then we get validated.”

Editor’s note: This story has been updated to include a comment from an HCPF spokesperson, who indicated that no clients were denied Medicaid eligibility due to inaccuracies highlighted in the state audit of notices.

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Faith Miller
Faith Miller

Faith Miller was a reporter with Colorado Newsline covering the Colorado Legislature, immigration and other stories.