Colorado may owe feds millions after Medicaid overpayment due to 'human programming error'

DENVER – Colorado is trying to figure out how to set aside $25 million in case it needs to pay the federal government back after a computer programming error led to the state being overpaid by millions of dollars in Medicaid funds.

On Feb. 15, Office of State Planning and Budgeting Director Henry Sobanet sent a letter to Sen. Kent Lambert, the chair of the Joint Budget Committee, informing him of the overpayment.

According to Colorado Department of Health Care Policy and Financing spokesman Marc Williams, a “human programming error” led to a “misinterpretation of state and federal policy which was programmed into the state’s eligibility system.”

Williams says that the error led to the program paying out federal funding matches to the state who actually weren’t eligible for it, and that the feds ended up paying 100 percent of reimbursement costs when it only should have been paying 50 percent.

The state is estimated as owing the federal government between $20 million and $45 million, though the letter says that the number is around $25 million.

In the letter, Sobanet requested that $25 million be set aside in a cash fund should the state have to pay the money back, though that would require legislative action. Under the Obama administration, there was a forgiveness program for similar errors, though it’s unclear if those rules will be applied under the new administration.

Williams says DHCPF has identified the programming error and is fixing it later this month.

The Joint Budget Committee decided initially Wednesday it would appropriate the requested $25 million to the budget rather than making a new cash fund, but tabled the decision in lieu of waiting to see what the federal government requests in repayment -- if it requests repayment at all.