Owner of home for mentally ill says Colorado Medicaid dysfunction could force them to close

Dysfunction continues in Colorado's Medicaid system, sources tell CBS News Colorado, with tens of thousands of people unable to pay for the health care they need to survive, and left with limited answers as to why, or any helpful communication to get back on track. 

The problems began last spring when the federal government resumed its requirements of Medicaid eligibility verifications, after those verifications were halted for three years during the pandemic. 

People on Medicaid were supposed to receive packets in the mail on how to renew, but some people in assisted living say they never received anything. 

The owner of the Tender Care Assisted Living facilities in Jefferson County, Justin Wiley, says Colorado's Medicaid system hasn't paid for the care costs of the majority of his residents for months, and he says he's now owed about $100,000. 

His facilities in Lakewood and Wheat Ridge serve adults living with mental illness. 

"Most of our residents have some kind of mental disorder, mainly schizophrenia... we provide meals, laundry, house cleaning, all the basics for them, activities, stuff like that... we handle all their medical, all their medication administration, all their doctor's appointments," Wiley explained. "So, it's busy, but it's a lot of fun."

His residents depend on Medicaid to live there, but for the last few months, payments haven't been coming, and he's struggled to get any answers as to why or how to fix it. 

"They tell me that my issues need to be resolved by a supervisor, and so they tell me, 'we'll transfer you to a supervisor, leave a voicemail for the supervisor, they'll call you back,' but then I never get a call back," Wiley said. 

He also tried taking his residents on a field trip to the Jefferson County Human Services Department in person to resolve their held-up claims, but he says, "they basically turned us away and said, 'unfortunately, we just don't have anybody here that can meet with you.'"

Wiley fears if he isn't paid soon, he may have to shut down.  

"I've, as an owner, had to stop paying myself to try and make the budget work... we're running out of money, and when we get to the point where I can't cover the bills anymore, I'll have to shut the facilities down, and basically tell these guys they've got to find another place to live," Wiley said. "That breaks my heart, I can't even put it in words. I care so much about these guys, and even the thought of even one of them being on the street is just too much for me to handle."

He says he will bring some of his residents to live at his own house if push comes to shove. 

"My emergency plan is to bring them home to my house, because I don't know where else to send them. I just, I can't honestly, I can't turn them to the street," Wiley said. 

Wiley is not alone. 

Across the state, 54,774 Coloradans' Medicaid benefits were either still pending or denied for procedural reasons in January, according to the Colorado Department of Health Care Policy and Financing. 

Sources say a host of technology problems with some of the state's software that processes Medicaid claims and payouts are partially to blame for so many people experiencing problems, and at a local level, county human services departments are facing double the workload than pre-pandemic levels, but no increase in staff or funding to manage it.

"I think this system needs to be revamped," Wiley said. 

Jeffco Human Services says it's made improvements in recent months, has added more staff and training, and has decreased its backlogs.

Starting February 4, Jeffco implemented an individual caseload system, so owners like Wiley will be assigned one specialist who can help them work through any issues they encounter. 

Some residents at Tender Care tell CBS News Colorado they hope more improvements will come soon. 

"It's stressful, because you want to pay your rent and you want to do your part," says resident David Radichevich. "I don't really understand why it's come to this point... these houses are like a family atmosphere. You get your shelter, your food and your medicine, and they're safe places to live, and for a lot of us, if we didn't have it, who knows what would happen to us?"

Kirk Rogers, 52, has lived at Tender Care for two years. Before that, he spent seven years living on the streets. He hopes Wiley won't be forced to shut down. 

"If I hadn't gotten in here, I'd probably be dead," Rogers said. "With my age, with my medical problems, if I don't have a place like this, I'm back on the street, and that's a death sentence."

After CBS News Colorado contacted both the state and Jeffco Human Services last week about Wiley's issues, Wiley says he's getting much better communication about the problems he's having, but that still not all of his residents' claims have been addressed or paid out.  

The state's Medicaid office says nearly all of Wiley's claims have been resolved, and the remaining claims have been escalated. The state also says some of the denials were because some residents had financial resources that exceeded what is allowed for Medicaid, so those will not be paid out. 

Jeffco Human Services added that some of Wiley's residents' claims may have been held up due to inefficiencies with the Medicaid system, but that about half of the claims aren't being paid out yet, because the county still needs additional information from those residents. 

The Colorado Department of Health Care Policy and Financing, which manages the state's Medicaid systems, says on its website that it is working on solutions:

Short term, Colorado has implemented several state-specific and federal measures to mitigate procedural denials. We have shortened the renewal packet by 33%, created an escalation process for individuals who should be covered but have lost coverage, are leveraging our Overflow Processing Center (OPC) to assist counties and are actively working on correspondence clarity. In September, Colorado implemented two additional projects. The first is a 60-calendar-day extension to complete the renewal process, available for our vulnerable populations, including long-term care (LTC), members on waivered services, and buy-in recipients who have not returned their renewal packet on time. The second is a change to how the ex parte process occurs. As a reminder, "ex parte" means the automation of renewals using third party data sources. These two projects resulted in an increase in pending renewals and a decrease in procedural terminations.  

In addition, we are working on the following short term solutions to mitigate procedural denials and improve the overall renewal process.

• In February, we are implementing a waiver to permit the designation of an authorized representative for the purposes of signing an application or renewal form via the telephone without a signed designation from the applicant or member.
• In April, we will implement a process to auto renew all Coloradans with historic incomes less than 100% of the Federal Poverty Level.
• We are collaborating with counties on longer term strategic advances
• We are actively working to improve eligibility correspondence to members 
• We are also working on implementing a waiver to automatically (without member action) reinstate members back to their renewal date when they submit and are approved during their 90 day reconsideration period (Date TBD)

Recently, CMS extended flexibilities (or waivers) through December 2024 to assist states with processing renewals, which is welcome news.  Longer term, we are working with CMS to make several of these waivers permanent, which include the following:

• Renew Medicaid eligibility based on financial findings from the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or other means-tested benefit programs. 
• Delay procedural terminations for beneficiaries for one or more months while the state conducts targeted renewal outreach, which is currently operational for long-term care renewals.
• Renew Medicaid eligibility for individuals through Ex Parte (automated renewals) with income at $0 (currently operational) or below 100% Federal Poverty Level (operational in April) when no data is available through electronic interfaces.
• Partnering with National Change of Address (NCOA) Database and United States Postal Service (USPS) In-State Forwarding Address to Update Beneficiary Contact Information.

Also to improve eligibility performance longer term, HCPF is collaborating with counties on a study to identify areas of opportunity to improve the overall renewal process and the process for those accessing Long Term Services and Supports. We are looking forward to sharing these recommendations, once available, with stakeholders. 

CBS News Colorado will continue to investigate concerns with the state's Medicaid system. If you're experiencing issues, please contact Investigator Kati Weis.