Providing health care is hard. The only thing harder might be figuring out health care finances. Colorado, it seems, has some figuring to do when it comes to management and oversight of Medicaid.

The Denver Post’s Christopher N. Osher reported over the weekend that a federal audit of the state’s Medicaid program found substantial waste, fraud and abuse.

The Centers for Medicare and Medicaid Services conducted the audit, which is a very technical, complicated morass of acronyms and programs. We’ll spare you the deep dive. What you need to know is that Colorado’s $10 billion Medicaid program is throwing money away and not doing a good enough job trying to get it back.

Medicaid, recall, is the federal safety net program that provides health coverage mostly to eligible low-income Americans and people with disabilities. That as opposed to Medicare, which covers older Americans.

Although the federal government funds Medicaid, it does so primarily by sending money to the states, which oversee their own implementation. In Colorado, that job falls to the Department of Health Care Policy and Financing, which contracts with several providers. More than 1.3 million Coloradans are Medicaid beneficiaries.

The problem is that sometimes payments go to the wrong providers. Maybe someone is cheating the system. Maybe it is just an innocent mistake. Sometimes, for example, patients and providers do not realize that some other insurance provider should cover a health care visit.

The federal auditors reviewed three Colorado managed care programs over three years and found that the state recovered less than $65,000 in overpayments.

Great! That means Colorado is doing a good job not overpaying, right?

Not really.

“[The] review team identified the state as having a lack of effective policies and procedures regarding [managed care programs] investigations, referrals, and reporting requirements for preliminary investigations and overpayments,” the audit reported. In other words, the state doesn’t have the systems in place to find and recover misspent money. It also identified some specific overpayments that were never investigated.

Part of the problem is a needlessly complex oversight regime that cuts across multiple departments. The state, the auditors found, does not even require overpayments to be reported to the department that is supposed to review and verify the situation.

This should also be a cautionary tale to Democrats jumping on the single-payer bandwagon. The immense cost of federally-provided universal health care is enough to give one pause. When you start to think about needing to fix problems like this one and uncounted other challenges that vary from state to state, a simple “Health care for all” slogan on the presidential campaign starts to look especially superficial.

Of 28 states audited in the past three years, only three fared worse than Colorado. They didn’t break along partisan lines. Blue states with robust social welfare programs, red states that do only what’s required, and purple swing states fall all over the rankings. California, West Virginia and Alabama all bottomed out under Colorado.

Meanwhile, states that do well at recouping overpayments collect tens or even hundreds of millions of dollars that they can put to better use. The auditors provided nearly a dozen recommendations for improvements. Lawmakers and the public should demand action to implement them. With all the confusion and doubt at the federal level about health care, we don’t need the state adding to the problem. Every dollar lost is a dollar not available to help someone else in need.

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