The Denver Post dropped a case study in how government “solutions” turn into taxpayer-funded faceplants. In a piece by Seth Klamann, the Post reports that Colorado’s Medicaid agency made a bad call on reimbursement rates for routine medical transportation, and the tab exploded.
The article says state officials leaned on a flawed analysis that effectively treated minivans and sedans like ambulances for mileage reimbursement. The legislature, acting on the agency’s recommendation, jacked the mileage rate up to $6.10, and for three years the state stayed on that ride before finally cutting it back down, after costs and fraud surged.
The Bullet Point Brief
- Colorado’s Medicaid program for non-emergency medical transportation got a rate hike based on a shaky comparison, and the state paid out like every routine ride was an emergency. Genius.
- Spending ballooned to more than $300 million a year, over quadruple what it was before the increase, according to legislative analysts cited in the story.
- Fraud followed the money. The article describes providers signing up in droves and bad actors allegedly loading cars with patients to maximize mileage payouts. At least $25 million was tied to an “international fraud scheme,” and the Post notes indictments and allegations of billing for rides that never happened.
- Providers warned the state. The story quotes transportation operators saying they flagged the overpayment and sent memos, and they say the agency did not respond for a long time.
- This was not a one-off. The Post reports legislative staff also identified another billing error in a separate area where Medicaid was paying far too much for certain wheelchair pickups, and lawmakers were openly calling it “fraud and incompetence” while staring down Medicaid budget pressure.
My Bottom Line
This is gross incompetence on the part of a government-run agency, and it is exactly why government is not the answer for providing health care. When the incentives are backwards and the oversight is slow, the system does what government systems do: it grows the problem, then asks for more money to “fix” the problem it created.
Who loses? Taxpayers. That is who always loses when government tries to take the place of the free market. The bill is not paid by “the state.” It is paid by every family trying to afford groceries, every small business trying to make payroll, and every property owner watching costs stack up like cordwood.
And notice the pattern: a flawed analysis leads to a massive rate hike, the program becomes a magnet for abuse, and it takes years to reverse course. That is not “compassion.” That is a slow-motion transfer of money from working people to bureaucracy, and then to whoever figures out how to game the rules first.
If Colorado wants better outcomes, start with accountability, hard controls, and basic competence. Because “trust the system” is not a health care plan. It is a punchline.
Source: The Denver Post
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