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NCLEJ and Colleagues Achieve Settlements to Secure Colorado’s Timely Processing of Medicaid, SNAP, CHIP, and TANF Applications

This case was filed in 2004 following Colorado’s premature launch of a flawed new computer system to manage applications and ongoing eligibility for all of its public benefits programs. The new system, known as the Colorado Benefits Management System (CBMS), led to massive delays in processing applications and loss of benefits. Plaintiffs secured a preliminary injunction in late 2004 requiring timely benefit processing, elimination of the backlog of overdue cases, an emergency processing mechanism for those who lost benefits as a result of the new system, extensive reporting by the state agency, improved notices to program beneficiaries, and a stay on collection of overpayments caused by the new system.

After extensive negotiations, the parties agreed to a settlement in late 2007 under which the state agency must comply with federal and state requirements for timely processing of applications for Food Stamps, Medicaid, Children’s Basic Health Plan, and TANF cash assistance and engage in extensive reporting and monitoring. Other provisions included the following: the state will maintain a toll-free telephone for applicants and recipients to report problems and get resolution, instruct counties to refund collections of overpayments caused by improper operation of the computer system, require counties that are not providing telephonic access to applicants and recipients to do so, and take steps to investigate and resolve systemic computer problems identified by the plaintiffs.

Late in 2009, plaintiffs notified defendants of their failure to comply with the settlement. Following unsuccessful mediation with the Department of Health Care Policy and Financing, which is responsible for Medicaid and CHIP, plaintiffs filed a motion for contempt, enforcement, and modification of the stipulation of settlement.

Late in 2010 the court approved an amended settlement agreement between plaintiffs and the Department of Human Services (DHS), which is responsible for cash assistance and food stamps. The settlement agreement, among other things, requires the agency to reach targets by certain dates for timely processing of cash assistance and food stamp applications.

In 2011 the court approved the amended settlement agreement reached between plaintiffs and the Department of Health Care Policy and Financing (responsible for Medicaid and CHIP) which requires, among other things, that HCPF reach targets by set dates for processing Medicaid and CHIP applications. In addition, HCPF has agreed to eliminate auto-termination in Medicaid and CHIP, which results in the termination of a family’s health coverage if the worker has not redetermined eligibility by the redetermination due date. Auto-termination results in many families improperly losing health coverage because the worker has not processed the family’s renewal forms, and the state’s agreement to end this practice is a significant victory.

The litigation, settlement, and continued monitoring of this matter have been of critical importance in making sure that defendants continue to address the root causes of their processing delays and that thousands of applicants each month receive benefits in a timely fashion.

The case is Davis v. Birch (originally known as Hawthorne-Bey v. Reinertson). In addition to NCLEJ, plaintiffs’ counsel are the Colorado Center on Law and Policy and Sherman & Howard L.L.C. For more information contact the following at NCLEJ: Marc Cohan, cohan(at), Gina Mannix, mannix(at), or Tedde Tasheff, tasheff(at)