Colorado Audit Reveals $7 Million Paid for Deceased Medicaid Recipients

A federal audit found systemic issues in Colorado's Medicaid payment processes, leading to improper payments for nearly 9,000 deceased enrollees.

An audit by the U.S. Department of Health and Human Services estimated Colorado paid $7.3 million, including $3.8 million in federal funds, for Medicaid services to deceased individuals.
The improper payments, made between 2018 and 2020, stemmed from capitation payments, which provide insurers a fixed amount per enrollee regardless of service use.
The audit highlighted Colorado's lack of an automated system to track deaths during the period, with some payments processed even when deaths were known.
Colorado implemented an automated system in 2019 and attempted to recover some funds but did not collect payments for individuals no longer eligible for Medicaid.
State officials dispute parts of the audit, citing methodology concerns, while the Office of the Inspector General recommends Colorado repay $3.8 million in federal funds and address systemic issues.