Colorado Received Millions in Unallowable Bonus Payments

Under the Children's Health Insurance Program Reauthorization Act of 2009, Congress appropriated $3.225 billion for qualifying States to receive performance bonus payments (bonus payments) for Federal fiscal years (FYs) 2009 through 2013 to offset the costs of increased enrollment of children in Medicaid.

Some of the bonus payments that Colorado received for FYs 2010 through 2013 were not allowable in accordance with Federal requirements. Most of the data used in Colorado's bonus payment calculations were in accordance with Federal requirements. However, Colorado's Department of Health Care Policy and Financing (State agency) overstated its FYs 2010 through 2013 current enrollment in its bonus requests to CMS because it included individuals who did not qualify because of their basis-of-eligibility code. As a result, CMS overpaid Colorado $38.3 million in bonus payments.

We recommended that the State agency refund $38.3 million to the Federal Government. The State agency did not concur with our findings or recommendation.