Medicaid mayhem: Tech problems with Colorado's Medicaid delay critical money for tens of thousands with disabilities

Families of people with long-term disabilities allege dysfunction and chaos within Colorado's Medicaid offices are failing the state's most vulnerable populations.

This, as CBS News Colorado obtained state documents illuminating a laundry list of technology problems with some of the state's platforms used to handle different aspects of Medicaid claims. 

"They're putting all of them at tremendous risk and dare to tell us, 'it's just a glitch, don't worry about it,' but they're not the ones living with this," said Jan Taylor, mom of 11-year-old Tessa Taylor, who has cerebral palsy and epilepsy.

Taylor says her daughter's Medicaid benefits were first held up in the fall after the federal government began requiring eligibility reviews again after those reviews were paused during the pandemic.

She says the state was incorrectly counting her Medicaid income as a full-time caregiver for Tessa as part of her overall income and denied the Medicaid payments the Taylor family needs to pay for Tessa's expensive care. 

"I had to keep submitting the paperwork over and over again because the PEAK app is not an ideal situation, it won't acknowledge that things have been uploaded into it, and I get asked for the same paperwork three, four, six, 12 times," Taylor recalled. "Tesla's epilepsy medications were due to be refilled, she can't go a day without them, and she'd be dead, and I made that point, and they said, 'well, we don't have any prioritizing, you're just in the list with everybody else,' and I said, 'okay... what's your name? Let me put that on her headstone, and make sure that I know that it's your fault.'"

After she filed an appeal, Taylor says the Medicaid benefits were reinstated soon after. 

"We had to cancel all of her therapies, all of her specialist appointments, and go to the back of the list when they those came in," Taylor said. 

Then in January, technology issues with Colorado's new case management system – called the "CCM" – caused issues for tens of thousands of claims and payouts for people with long-term disabilities. 

Taylor says in January, her Medicaid payments for being Tessa's full-time caregiver stopped coming. Because of that, Taylor says she couldn't afford to send Tessa to many of the parasport practices that are critical to her therapy.

CBS News Colorado reviewed state IT records that show during the redesign of the CCM, people's information from the old system wasn't properly moving over to the new one, which IT specialists said created issues for workers at the county level to adequately process people's claims. 

The case management redesign is an initiative that attorney Katherine Wallat with the legal nonprofit the Colorado Center on Law and Policy says was poorly planned, and lacked swift action to help people adversely affected. 

So, she and her colleagues filed a federal civil rights complaint against the Colorado Department of Healthcare Policy and Financing – the agency that manages the state's Medicaid system – claiming the state is discriminating against people with disabilities. 

"We've been requesting that they pause terminations since the summer, we've met with them repeatedly, and they've been very open to meeting with us," Wallat said. "But we're reaching a point now where we're in full crisis mode, and we're not getting the responses that we need, and so we feel like we need to raise that very, very loud red flag."

CBS News Colorado also found state documents showing some attempted fixes for the technical issues caused more problems, something Wallat has also noted in her work on the issue. 

For example, in February, HCPF sent out this letter saying a system update accidentally caused people with long-term disabilities to lose their benefits.

The state says it jumped into action.

"We implemented a series of pretty massive and significant safety net changes," says Bonnie Silva with HCPF. 

Silva says the reason for these problems is an unintended convergence of major changes, including reviews of people's Medicaid eligibility after the Pandemic ended – known as the Public Health Emergency Unwind – and a redesign of the state's case management system.

"We started the redetermination of all 1.7 million people who are on Medicaid, we had to go through the redetermination process, so that started last May, placing a fairly unprecedented, I think, workload on the counties who go through that process," Silva said. "At the same time, we move forward with implementing a new care and case management IT system for our long-term care population. This IT system had been delayed several times, so we certainly didn't have the intention of launching it this year, but it was finally ready in July, and so in July we launched this new IT system... and that it is going to house the key components of our work, and there is a vision for it to create a lot of efficiencies for our case management agencies... and under that umbrella is a requirement, it's a federal requirement that the entities providing case management cannot also be direct service providers, and we have until July 1 of this year to come into full compliance. So these three things were never intended to happen... but they converged at the same time."

Since last spring, state data shows more than 400,000 people's Medicaid claims were denied or delayed due to procedural reasons. 

HCPF insists that the majority of the procedural denials are not their fault, but rather are a result of people failing to turn in proper paperwork, but Silva admits tech issues this year with the CCM have affected people with long-term disabilities. As a result, HCPF announced on April 19 that is giving a 12-month extension to all people with long-term disabilities, so that no one will lose their benefits while the state continues to iron out its issues. 

"We deeply regret that those impacts have occurred and that we are working nearly around the clock to make sure that that the issues that they experienced are going to be fully remediated," Silva said. "We've provided resources to the counties and the case management agencies to really mitigate any backlogs that they're experiencing... and we also have an escalation team at a state level."

Wallat says many of the technological issues keep happening, because of HCPF's outdated network. 

"There's a lot of reasons, and one is our very antiquated computer system, the Colorado Benefits Management system, that we as a state got in 2004, using 1990 technology," Wallat said. 

Her colleague, attorney Bethany Pray, says it wasn't until they filed the civil rights complaint in late February that the state began making more meaningful changes to prevent people with disabilities from losing their benefits. 

"Community members and advocates... feel not heard, honestly, and are not sure that the state feels the same urgency about their problems, that they feel," Pray said. 

When CBS News Colorado reported on complaints from people in assisted living centers earlier in the year, state officials denied that technology problems were a factor for their Medicaid eligibility hold ups, despite sources saying otherwise.

However, Silva says her department has been working on solutions long before CCLP's cvil rights complaint was filed. 

"We work hard to be responsive and responsible for what we are responsible for, and understanding where the issues are coming from, and working diligently to fix them, and take accountability, and the civil rights complaint aside, that is not the reason for the actions that we're taking," Silva said. "These actions started long before that, and will continue long after that."

But parents like Taylor, who only just got her Medicaid money two weeks ago, after her checks stopped in January, feel HCPF should be held accountable by other government leaders at the state or federal level.

"That is shameful, and I don't know why the governor isn't stomping on these people," Taylor said. "We're drowning financially when these things happen, and then when it's the Medicaid issue, then our kids are at risk of dying because of their failure to perform."

Last fall, Colorado's State Auditor found that 90% of the state's correspondence with people on Medicaid had critical errors like "contradictory and confusing messages."

Click here to read the full audit report.

HCPF says the audit took place before the Public Health Emergency Unwind and the correspondence issues the auditor noted did not have an impact on the more than 400,000 people who faced procedural denials of their Medicaid benefits in the last 12 months, but Wallat and Pray with CCLP say the audit is another example of HCPF's dysfunction.

The Office of the State Auditor provided the following written statement about its findings:

"With respect to our Medicaid Correspondence audit, per our normal follow-up process on performance audits, we have tentatively scheduled HCPF to provide a status report in October of this year. For the status report, HCPF will be asked to provide an update on whether each of the three recommendations contained in the report has been implemented, partially implemented, or not implemented; what steps they have taken to implement each of the recommendations; whether their implementation date has changed; and what else still needs to be done to implement them. HCPF will be asked to attend the Legislative Audit Committee hearing in October to present its status report and answer any questions."

The auditor is currently conducting another audit into the state's Medicaid issues, which should be complete by June. 

In the meantime, Silva advises anyone who has issues with their Medicaid claim to contact their local county social services office or their case manager for help. 

But Wallat has a different suggestion. 

"File an appeal, because Medicaid is an entitlement, that means you have the right, the absolute right, to file what's called an appeal, where you go in front of an independent person, an administrative law judge, and you say, 'I disagree with this,'" Wallat explained. "If you file that appeal 60 days after the date of the letter or 60 days after the date that you find out that you don't have Medicaid, you automatically get what's called continuing benefits."