Colorado’s $500,000 Medicaid commission has no mandate to investigate fraud

By Jen Schumann | Rocky Mountain Voice

Colorado lawmakers spent weeks debating a new commission to study Medicaid sustainability. The bill they sent to Gov. Jared Polis on May 9 names three major failures inside the state’s Medicaid system in its legislative declaration—the post-COVID eligibility purge, the rideshare scandal and the autism therapy audit.

But the bill never directs the commission to investigate fraud, waste or abuse.

Instead, SB26-187 creates a 10-member Medicaid Cost Containment and Sustainability Commission tasked with “establishing shared understanding,” exploring policy options and producing recommendations. The bill includes a $500,000 appropriation, including $415,000 for a contractor to facilitate meetings and roughly seven months to produce a report—due December 11, 2026.

The debate over what the commission will—and will not—examine surfaced repeatedly during the May 6 Senate Appropriations hearing and the May 9 House floor debate.

“I have concerns about the fact that the commission is not specifically directed as part of its task to look at questions of fraud, waste, and abuse,” Rep. Stephanie Luck said. “It’s not language in here.”

The concern comes as federal audits and investigations continue to pull back the curtain on problems inside Colorado’s Medicaid system.

In February, the federal Office of Inspector General released an audit reviewing $289.5 million in Colorado Medicaid payments for Applied Behavior Analysis therapy between 2022 and 2023. Auditors examined 100 enrollee-month samples. Every single one contained at least one improper or potentially improper payment.

The audit identified $77.8 million in improper payments and another $207.4 million in potentially improper payments, putting the total exposure at $285.2 million. Colorado now owes the federal government a $42.6 million refund.

Auditors also found incomplete session notes, unauthorized activities billed as therapy and missing background checks on technicians who, according to the report, had criminal offenses that could endanger children.

At the same time, Colorado’s Medicaid spending on ABA therapy exploded from $60.1 million in 2019 to $163.5 million in 2023—a 172 percent increase in four years. Even as concerns surfaced in the billing data, state regulators approved higher reimbursement rates.

Another controversy emerged inside the state’s non-emergency medical transportation program.

According to a March 3 letter from the U.S. House Committee on Energy and Commerce, Colorado Medicaid spending in that program increased 436 percent between 2019 and 2025. The committee said HCPF provided “incorrect guidance” that classified patients with extra-large wheelchairs as requiring specialty ambulance transportation. Correcting the guidance is expected to save Colorado $60.5 million in fiscal year 2026-27.

Separate fraudulent billing inside the transportation program exceeded $25 million. The U.S. Attorney for Colorado has filed criminal charges against two Coloradans.

Pressure on HCPF intensified this spring.

HCPF Executive Director Kim Bimestefer resigned in early April, hours before lawmakers planned to introduce a no-confidence resolution tied to the wheelchair billing controversy and the ABA audit findings. Polis appointed Gretchen Hammer as acting executive director on April 3. The Senate Health and Human Services Committee recommended her confirmation 7-0 on April 8.

The size of Medicaid’s impact on the state budget became a central issue during debate over SB26-187.

Rep. Matt Soper criticized lawmakers for funding a new commission after making deep statewide budget cuts.

“We just cut, you know, close to a billion, over a billion from our budget,” Soper said. “We asked many to take it on the chin. We cut the year-round committees, for example, the year-round water committee, and yet this year is the worst drought in the hundred and fifty years of our state.”

Luck argued the commission’s stakeholder structure also leaves out taxpayers funding the system.

The bill calls for input from Medicaid members, disability advocates, healthcare providers and community organizations. Luck said “what seems to be lacking there is the payer of the services, i.e., the average citizen.”

Then Luck stacked the numbers into the record.

HCPF total FTE employment grew 72 percent between 2018 and 2024, while Medicaid enrollment grew 7.6 percent. Executive director’s office spending grew 101 percent over the same period. Between 2015 and 2025, HCPF spending doubled—from $8 billion to $16 billion—while the rest of the state budget grew 64 percent. When the federal government ended pandemic-era Medicaid protections in 2023, Colorado’s redetermination process disenrolled 48 percent of those reviewed. The national average was 31 percent.

“Our Medicaid coverage problem wasn’t made by H.R. 1 cuts,” Luck said. “It started with bad legislative policy and over-enrollment during COVID.”

Rep. Brandi Bradley tied the bill directly to the existing audits already under federal review.

“We have a $285 million federal audit that we know about,” Bradley said. “We have a $77 million ABA fraud audit that we know about. We have a $25 million rideshare audit that we know about, and a wheelchair audit—we don’t even know how much that is gonna cost or has cost our state.”

Bradley argued the bill’s $415,000 contractor line was “insanity” given the expertise present in the chamber—a healthcare practitioner with 26 years of Medicaid experience, a member who has worked for HCPF, others with hospital board experience. She also pressed the bill sponsors on whether the new commission would interrogate state policy choices, not just federal cuts.

She also argued Colorado expanded Medicaid beyond its original purpose.

“Medicaid was set up to enroll certain people, the disability community, the elderly poor,” Bradley said, “and we decided in this state to fund policies and throw a hammock out and blanket the state to include able-bodied people. And with that, we have grown Medicaid unsustainably.”

Rep. Emily Sirota defended the bill as a necessary long-term policy discussion.

“This is the responsible thing for us to do,” Sirota said. “Disability advocates are asking for this process, for us to be able to have an open and more deliberate and lengthy conversation about how our system works and how we can improve upon it.”

Sirota also said unused commission funds would return to the state.

Rep. Rick Taggart, the Republican co-sponsor of the bill and a member of the Joint Budget Committee, argued lawmakers need a deeper look at where Medicaid spending is headed and how the state plans to sustain it long term.

“We have got to get this on a sustainable path,” Taggart said. He acknowledged this year’s cuts were “one-time” measures lawmakers did not want to make and urged colleagues to “give us a chance to really dig in and get this right.”

The bill cleared the Senate Appropriations Committee on a unanimous 7-0 vote May 6.

During that hearing, Sen. Barbara Kirkmeyer, the senior Republican on the Joint Budget Committee, described months of frustration trying to get consistent information from HCPF during budget negotiations.

“I’m tired of the surprises, and I’m tired of not getting all the facts,” Kirkmeyer said. “We sat through a lot of committees where we ask for data, and we get data one day, and the next week it’s different data. There’s a lot of cleanup that needs to happen, especially with this department.”

Senate Appropriations Chair Sen. Judy Amabile agreed lawmakers lacked confidence in the information they were receiving.

“This is more than a third of our budget, and we did not feel like we had everything we needed to make all the cuts that we made,” Amabile said.

Soper borrowed a line from a former Colorado legislator from the late 1990s. “Medicaid is the Pac-Man in the budget,” he said. “It’s essentially eating all the other line items within the budget. And Medicaid, guess what, is still the Pac-Man in the budget.”

What the bill does not say remains central to the debate.

SB26-187 authorizes the commission to identify “points of friction” and opportunities for efficiency. It does not direct members to investigate fraud, waste or abuse, despite the audits and federal investigations already underway.

The bill now awaits Polis’ signature. The federal Office of Inspector General audit has been public since February. The Energy and Commerce Committee sent its letter to Colorado on March 3, and HCPF responded March 17. The committee’s investigation remains open.

HCPF also testified in support of the legislation that would help fund the commission reviewing the Medicaid system it oversees.

Four days after the House approved SB26-187, Vice President JD Vance announced the federal government would withhold anti-fraud funding from states that fail to aggressively prosecute Medicaid fraud. Vance specifically called out California, Hawaii and New York. Colorado was not named, but the May 13 press conference makes clear that every state’s Medicaid fraud enforcement record is now under federal review.

If Polis signs SB26-187, the commission will receive a $500,000 budget and have until Dec. 11 to deliver its report. By then, the federal audits, the refund demands and the fraud cases will still be sitting in plain view.

The bill names the failures. It just doesn’t name fraud.