Sneak Peek: Appeal Helps Reduce Colorado’s CHIP Disallowance

October 20, 2011 | By Jerry Ashworth | Post a Comment

(This post is based on an upcoming article in the Federal Grants Management Handbook.) A Colorado health care agency avoided having more than $2 million in Children’s Health Insurance Program claims rejected by appealing a determination by the Centers for Medicare and Medicaid Services about what constitutes unallowable administrative costs. As a result, only about $318,000 of the questioned claims was disallowed.

The Colorado Department of Health Care Policy and Financing appealed a CMS determination to disallow $2.56 million in federal CHIP funds. CMS asserted that certain payments Colorado made to Anthem Blue Cross Blue Shield were administrative costs rather than the costs of child health assistance. It contended that Colorado had about $3.9 million in administrative costs and other “nonprimary expenditures” in fiscal year 2007 and disallowed $2.56 million, the federal share that exceeded the 10 percent statutory limit on such expenditures.

However, the Department of Health and Human Services Departmental Appeals Board concluded that part of the disallowed amount had paid for child health assistance in the form of health benefits coverage under the state’s self-funded plan. Therefore, the board reduced the disallowance to $318,635, the amount by which Colorado exceeded the statutory limit after some of the payments to Anthem were reclassified as administrative expenditures.

See more of this story in the November issue of the Federal Grants Management Handbook.


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