By Jen Schumann | Rocky Mountain Voice
Colorado can’t fully document millions of dollars it billed for Medicaid home care. That’s the finding of a new federal audit.
The Office of Inspector General wants Colorado to return $8.07 million in federal money it says the state was not entitled to claim for personal care in a single budget year, the one ending June 30, 2024. Auditors questioned another $45.69 million and told the state to work it out with CMS.
The $8.07 million is a recommended refund. The $45.69 million is a different story. It’s still under review, and CMS could recover all of it, some of it or none. Either way, nobody has ordered Colorado to repay the full $53.8 million.
In the sample, auditors kept hitting records that didn’t add up. Where the care happened. How long it ran. Who showed up to provide it. Whether the bill matched the services and rates Colorado had approved.
What the verification system is supposed to prove
A 2016 federal law, the 21st Century Cures Act, made states track this kind of care electronically. Personal care is the hands-on help—bathing, dressing, eating—that helps elderly and disabled residents continue living at home. Colorado got a one-year extension and had to have its system running by Jan. 1, 2021.
The system is supposed to capture the basics of every visit—who got care, who gave it, what type of service, where and for how long. The caregiver checks in and out on a phone or by calling in. Then the state matches that record against the bill.
Those records give Colorado an independent check on provider billing. But auditors said Colorado’s records often couldn’t confirm the basics: that the approved caregiver did the approved work, at the place and time the bill claimed.
Congress required EVV to cut improper payments and tighten oversight of home care.
Caregivers can log a visit on a phone app, by calling in or by entering it manually after the fact. The mobile option captures GPS coordinates, but auditors found the state did not always require location alerts to be reviewed and corrected, and that manually entered records could bypass real-time verification.
Where the records fell short
Auditors pulled a stratified random sample of 160 net claim lines from about 1.3 million the state paid in that year, worth nearly $300 million. In 91 of the 160, they identified at least one electronic-verification compliance issue.
Projected across the full year, auditors estimate roughly 683,000 claim lines—about 52 percent—fell short of federal and state verification rules.
The largest category involved manually entered visits (62 of 160). Colorado permits manual entries, but auditors said they cannot provide the real-time verification EVV was designed to create. HCPF disputes how the audit treated those entries.
Other issues included visits never entered into the system (17), missing service locations (16) and unresolved location alerts (16).
Manual entries accounted for the largest share of the electronic visit verification problems auditors found in the 160-claim sample. Source: HHS Office of Inspector General.
Auditors also found 39 of the 160 claim lines were at least partly unallowable.
Among them: 23 where required documentation did not show that an attendant’s background screening had been completed before services began, 14 where billed hours ran past what timesheets supported and eight where the state paid the higher Denver County rate for care delivered elsewhere.
The audit treated these payment errors separately from the broader problems with electronic visit verification. Source: HHS Office of Inspector General.
In one case, a provider submitted 3,876 units across eight service dates—about 121 hours a day—while the timesheets documented roughly five hours a day. The provider attributed the gap to delayed eligibility processing, but auditors concluded the billed units were still unsupported.
The state’s payment system did not stop the claim.
The $45.69 million set-aside comes from a different problem. For all 50 consumer-directed claims in the sample, the attendant timesheets logged only a date and a clock-in and clock-out, with no record of which approved tasks were performed. Without that detail, auditors said, they could not tell whether the paid time went to allowable care. Seven of the 50 were already counted in the payment-error total, so auditors based the $45.69 million on the remaining 43 to avoid double-counting.
Documentation gaps, not proven fraud
The audit did not conclude that any sampled caregiver was legally ineligible, that any sampled service definitely did not occur or that fraud took place. Instead, OIG concluded Colorado lacked the records required to support payment under Medicaid rules.
On some claims, missing location data and unresolved alerts left open the possibility that visits had not occurred.
In the audited claims, federal dollars covered slightly more than half the cost. If CMS determines payments were unsupported, Colorado would be responsible for resolving the federal share and could seek recovery from providers where appropriate.
The bigger push for payment accountability
Colorado’s audit is not a criminal case, but it comes as federal officials lean harder on claims data to catch questionable Medicaid billing before money goes out. A June 23 Justice Department takedown charged 455 defendants over more than $6.5 billion in alleged false claims, including a Medicaid record—295 defendants and more than $518 million.
“Prosecuting criminals who steal from American patients is necessary—but stopping them before a single dollar leaves the building is smarter,” CMS Administrator Mehmet Oz said.
Colorado’s response
HCPF disputed most of the audit’s findings and both financial recommendations. In a July 21 statement, the department said the audit identified documentation and system issues, not evidence that services were not provided, caregivers were ineligible or fraud occurred. HCPF told auditors that on average about 98 percent of claim lines during the audit period had matching EVV records with the required federal data.
HCPF argues the projection exaggerates the problem because several error categories were concentrated among a small number of providers and members.
OIG rejected that criticism, saying its sampling method was valid. The $8.07 million recommendation uses the lower end of the statistical confidence interval, while the $45.69 million remains a point estimate awaiting CMS review.
The deeper dispute involves the $45.69 million. HCPF says its CMS-approved consumer-directed program allows different documentation, with task worksheets—not timesheets—showing authorized work. OIG replied that Colorado supplied no record showing which authorized tasks attendants actually performed during the paid hours.
RMV sent HCPF additional questions after reviewing the audit and the department’s written response. This story will be updated if the department provides additional information.
What Colorado has fixed—and what remains
HCPF says its vendor corrected the location-data defect July 31, 2025, and the department plans additional provider guidance and a new claim edit comparing billed units with EVV-verified service time in the fourth quarter of 2026.
The audit does not end the dispute. CMS will determine the allowability of the $45.69 million set-aside. The $8.07 million refund remains an OIG recommendation that Colorado disputes. For the roughly 683,000 claim lines auditors flagged on verification grounds, no repayment was ordered. In all, the OIG made six recommendations—the two refund-related ones plus four aimed at tightening controls: new system edits on manual entries, locations and billed rates, closer provider oversight, and better documentation of background checks and care plans.
Another warning for Colorado Medicaid
It’s not the first federal audit to flag Colorado Medicaid this year. Back in February, a different OIG review pegged $77.8 million in improper autism-therapy payments and put another $207.4 million in question. RMV reported in March that Colorado raised those therapy rates even as spending and enrollment were already climbing.
Lawmakers later created a new commission to study Medicaid spending and sustainability. The bill doesn’t name fraud, waste or abuse among the commission’s tasks.
The programs are different. The question underneath them is the same—can Colorado show taxpayers got what Medicaid paid for?