Colorado Medicaid program battles new problems — with few answers — after transport fraud scheme

State health officials accused one of Colorado’s largest Medicaid transportation providers of fraud and suspended it from the program last week — only to abruptly reverse that decision this week after the company filed a lawsuit.

Now MedRide — which transports Medicaid patients to medical appointments — is again trying to get reinstated to a program that, advocates and providers say, has been plagued with confusion amid a state agency’s efforts to rein in fraud.

Indeed, MedRide’s on-again, off-again saga is the latest issue in a string of stumbling blocks that have sprouted from the Colorado Department of Health Care Policy and Financing’s efforts to crack down on a service that’s vital both to Medicaid members and to the companies that transport them.

Two transportation providers and a disability group told The Denver Post that the agency and its contractor’s efforts to tighten scrutiny on the program have been frustratingly murky: Timelines have shifted. New documentation has slowed payments. Vehicles now need to be inspected, and rural providers were initially told they’d have to take every vehicle to Denver, said Kelsey Bell, the executive director of the Southwest Center for Independence, which provides rides primarily in La Plata County.

Providers — like Bell — who said they submitted what they thought was the proper paperwork were then told they needed to provide more. Some providers have gone unpaid, prompting outreach to state officials, including to the governor’s office.

“In our opinion, the goalpost keeps moving — we fulfill what they ask for and then they ask for more,” said Andy Boian, a MedRide spokesman.

The company, which says it’s the largest Medicaid transportation company in the state, provided more than 375,000 rides last year, primarily in rural Colorado.

It’s unclear why the agency — known as HCPF — withdrew MedRide’s suspension; the company was told about the reversal shortly before a scheduled court hearing Monday, Boian said, but it did not receive an explanation, and HCPF has not returned the company’s calls since then. Though the suspension has been lifted, MedRide is still unable to provide rides to patients, Boian said.

The agency has also delayed and avoided interviews requested by The Denver Post about the transportation program since December, and it did not comment when contacted again this week.

On Friday, spokesman Marc Williams did provide a copy of HCPF’s letter to MedRide accusing it of fraud. In a statement to The Post, he wrote that the agency had given MedRide “opportunities and extensions to come into compliance and to address identified concerns, and they have not done so.”

HCPF’s letter to MedRide does not cite any evidence of alleged fraud.

MedRide, which has been operating in the state since 2018, has denied any involvement in the fraud scheme. On Friday, the company asked a judge to block its suspension. By Monday, HCPF said it was withdrawing the suspension entirely — after both the company and the agency had informed patients about the suspension.

Before ending the suspension, Boian said, the agency also pulled back its fraud allegations and instead said MedRide had failed to fingerprint all of its drivers.

“Unprecedented” fraud scheme

The trouble with the Medicaid transportation program began in 2023, when the health agency identified what its leader called “unprecedented” fraud. The alleged scheme, first reported by The Post in December 2023, involved a group of loosely connected drivers entering the program and breaking Medicaid rules by filling their cars with patients and driving them long distances to maximize the drivers’ payout, which was determined in part on a per-patient, per-mile basis.

Some of those patients were homeless and had drug addictions. The drivers would recruit them — and, in some cases, allow drugs to be sold in their vehicles — before driving patients hundreds of miles to treatment facilities in the Denver metro, The Post reported.

But 18 months after the scheme was identified, leaders at the agency have not publicly disclosed key details about it, including how much money was taken or if anyone has been arrested or charged with participating in the scheme. HCPF also denied a recent records request from The Post seeking that information, citing an ongoing investigation.

The FBI did not return a message seeking comment last month, and the Colorado Attorney General’s Office declined comment. A Colorado Bureau of Investigation spokesman said CBI was no longer involved because other agencies, including HCPF, FBI and the AG’s office, were investigating.

In an interview in November 2023, HCPF’s executive director, Kim Bimestefer, would say only that the cost was above $1 million. Rep. Shannon Bird, who as a member of the legislature’s Joint Budget Committee has heard repeated requests from HCPF for more money to respond to the scheme, said the agency told lawmakers that prevention efforts stopped $14 million in fraud last year.

HCPF, which was warned in 2021 by state auditors that the transportation program had problems, has instituted new requirements on its Medicaid transportation providers. Those include background vetting, training and vehicle inspections, as well as additional documentation for trips over 25 miles.

Simultaneously, agency officials have blocked new transportation companies from enrolling in the program and, with the help of millions of dollars provided by the legislature, have launched a back-review of drivers’ billings.

Legislation would provide money

HCPF is set to receive more money to help pay for its review under legislation advancing this week, and it’s also seeking to hire a statewide broker, providers and legislators said. The broker would essentially be a middle man between patients and transportation companies.

That plan is opposed by some providers and advocates, and a previous statewide broker program was abandoned; Bell, of the Southwest Center for Independence, said her experience with that broker — who is now the state’s contractor helping to credential drivers — included some of “the worst customer service I’ve ever experienced with my life.”