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Colorado hospitals owed millions in unpaid Medicaid claims

Southwest Health System is owed about $10.5 million, CFO says

DENVER — After Colorado launched a new technology system to handle reimbursements for Medicaid claims, hospitals across the state, including Southwest Memorial Hospital, are still owed millions of dollars.

The Colorado Hospital Association released data on Sept. 20 that indicated five individual hospitals and five hospital systems were owed nearly $211 million in claims after the first four months of the new system, which launched in March, The Denver Post reported.

The lack of payments is causing hospitals, especially in rural areas, to struggle, said Julie Lonborg, the association’s vice president for communications. She said the issue is reaching an unsustainable level, and hospitals fear they might not be able to treat nonemergency Medicaid patients.

Southwest Health System CEO Kent Rogers said his company has been waiting for delayed payments since February.

Medicaid payments account for about 31 percent of the hospital system’s revenue, chief financial officer Angela Kobel said, so the delay has taken a toll on this year’s budget.

“Two months’ worth of payments haven’t been paid,” she said.

She said that amount is equal to about $10.5 million.

Susan Birch, Health Care Policy and Financing Department executive director, said the new system operated by DXC Technology will bring the state into federal compliance and will help it pay Medicaid claims more accurately.

The department facilitates the Medicaid program in the state.

“This transition has been incredibly complex,” Birch said.

“We absolutely recognize and acknowledge that many have struggled.”

When the new system launched, claims from hundreds of providers were rejected for coding errors and validation issues. State officials said that these issues were from operator error, and that they warned providers to get trained on the new system before it went live.

Unlike some other rural hospital systems, Rogers said Southwest Health has not needed to consider limiting its services as a result of the problem.

He also said the delays haven’t affected patients’ costs, and he doesn’t expect that to change.

While he expressed frustration with how the state has handled the switch to the new system, he said he’s optimistic the payments will come through soon.

“We have a positive opinion about it, that it will get resolved,” he said.

Under the new system, $4.3 billion has been paid in 28 million claims so far. Medicaid officials said the system currently has 98,000 claims waiting for review.

When the system returns to normal operations, they expect to have 30,000 claims awaiting review within 10 business days.

Journal reporter Stephanie Alderton contributed to this report.

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