The patients flocked to metro Denver methadone clinics in mid to late summer, five or six to a car. Most were users of illicit opioids, including fentanyl. Many were homeless.
And all were from Pueblo or other parts of southern Colorado, driven up Interstate 25 by independent transportation contractors who suddenly had flooded the state’s Medicaid system.
As clinics scrambled to process the patients, they thought it was odd so many were coming from outside of metro Denver — especially while clinics were open and waiting in southern Colorado, some recalled later to The Denver Post. Providers at the methadone facilities, which are tightly regulated and highly stigmatized, made note of the vehicles dropping off these new patients: new SUVs with temporary tags, driven by men who often spoke accented English and who all had enrolled in a lucrative program that paid them to drive patients to the doctor.
The drivers billed Medicaid for every mile they drove, on a per-patient basis. The more-than-200-mile round trip between Pueblo and Denver, with a packed car, could net well over $10,000 a day.
State officials now believe the drivers were part of a coordinated Medicaid scheme that exploited the most vulnerable Coloradans and the medical system designed to keep them healthy. In a matter of months, officials say, scores of drivers are believed to have flouted Medicaid rules and the law, bilking a program that providers say is vital — and which auditors previously flagged as needing tighter scrutiny.
The Post’s reporting found that drivers appeared to share the opportunity by word of mouth and often registered new businesses using the same address. And recent changes to Medicaid, intended to bolster the program here and improve access to drug treatment, increased the money-making potential.
“The organized fraud scheme and the number of individuals that have come into this state in a coordinated fashion is unprecedented,” said Kim Bimestefer, the executive director of the state Department of Health Care Policy and Financing, which oversees Colorado’s Medicaid program.
The total cost remains unclear as state officials review thousands of Medicaid claims, a process that’s expected to take weeks. The scheme was caught in a matter of months, but in that short time, Bimestefer said, it likely cost the state millions of dollars.
The alleged fraud went beyond taking advantage of permissive rules, officials said, potentially violating both state and federal law.
Bimestefer said she contacted the FBI and the Colorado Attorney General’s Office after learning about the scheme. Both agencies declined to confirm to The Post if they were investigating.
The federal Centers for Medicare and Medicaid Services also was alerted, Bimestefer said. On Oct. 1, the agency accepted Colorado officials’ request to block any more drivers from enrolling in the transportation program. The state is now working to tighten its enrollment requirements.
Long-distance patients — many of whom, providers said, were being manipulated and weren’t yet ready to start treatment of their own volition — have since stopped coming to metro Denver clinics.
The Post interviewed more than 20 treatment providers, Medicaid officials, drivers and harm-reduction advocates who described the scheme. Though methadone clinics were an attractive target because patients initially needed to visit daily, state officials said the alleged fraud covered a broad array of the health care system — including routine doctor’s visits and hospital discharges.
One man who uses fentanyl and is unhoused said he was picked up from an encampment in Pueblo every morning before the sun rose. The Post was connected to him by a harm-reduction advocate in the city who also was familiar with the transportation scheme. The man asked not to be identified because of his substance use.
The man said he was paid $100 a day to ride in a vehicle to a methadone clinic in Aurora, packed in with as many as nine other people. This went on six days a week for five months. Pueblo patients could be paid between $50 for riding to Colorado Springs and $200 for riding to metro Denver or beyond, he and others with knowledge of the incentives said.
Sometimes, he said, one of the other patients in the car would sell fentanyl pills to the riders.
“I started it because I wanted to get off the blues and get a job,” the man said, using the slang term for fentanyl pills. “I mean, $100 a day was nice, but that’s not going to pay the bills, you know? It was barely buying lunch and dinner.”
The man has since been dropped by his driver and is no longer receiving treatment.
Floodgates opened in the spring
Several drivers and health care officials described similar incentives paid to the passengers.
Providers who noticed the unusual carpools soon began asking questions, with some saying they found the drivers argumentative. Denise Vincioni, the regional director for Denver Recovery Group, which operates methadone clinics across the Front Range, said patients often had a rotating set of explanations about why they’d come so far for treatment. New patients began arriving in groups in July at the company’s Colfax and Littleton locations.
“So it was plausible — kind of, sort of believable,” she said. “It didn’t dawn on us that this was something else,” at least initially. But Vincioni said her clinic quickly stopped accepting the new patients and reported her concerns to Medicaid.
State authorities had been alerted to the scheme as early as May by a Denver homeless services nonprofit.
Cathy Alderman, the spokeswoman and chief public policy officer for the Colorado Coalition for the Homeless, said the organization told the state about its concerns after vanloads of patients with similar stories arrived at the coalition’s Stout Street Health Center, which offers drug treatment.
The clinic was among the first in the state to be targeted, Alderman said, citing discussions with other health clinics. But soon, carloads arrived at methadone clinics elsewhere in Denver, in Littleton and in Aurora, providers at those facilities said.
Some methadone clinics in Denver became overwhelmed or stopped accepting patients from Pueblo because they suspected fraud. Drivers would then switch to another clinic, the providers said.
It’s unclear how many patients were transported as part of the scheme.
Angela Bonaguidi, who works for the University of Colorado’s Addiction Research and Treatment Services program and leads the state’s opioid treatment trade group, said she estimated 500 to 600 patients were involved. At Denver Health’s methadone clinic, program supervisor Shannon Unger said the facility saw dozens of new patients in August.
Bonaguidi said drivers directly solicited patients, often recruiting one patient who then would recruit others.
“You’re talking about individuals that are unhoused, that are in the throes of their addiction, and I think waving a couple hundred dollars in front of a person who is actively using is a large incentive,” she said.
Adam Weldemeskel, who had driven for a larger established transportation provider in Denver, said he launched his own business after hearing how much money drivers could make working in southern Colorado. Rumors had spread about drivers making $100,000 a week, he said.
But Medicaid rejected his and other drivers’ recent applications, those drivers told the Post, because of fraud concerns within the program.
“What (drivers) say is like, one guy figured out he could do things like this … and they told their friends — and it essentially got out of control,” said Weldemeskel. He said he never engaged in fraudulent activity.
In nine central Colorado counties, Medicaid transport is overseen by one company, IntelliRide. In all other counties, independent companies — sometimes staffed by just one driver — enroll with Medicaid and then strike out on their own.
They advertise to potential clients and to hospitals and medical clinics.
Among the requirements they must satisfy is passing an on-site inspection handled by a third-party contractor. Weldemeskel said his inspection consisted of a video call in which he pointed the camera into his car, at his name on the building directory for the limited space he was renting, and at a lockable filing cabinet that he said he was required to have.
Dozens of drivers registered their businesses to the same address in Colorado Springs, a shared office space that charged $150 a month for a desk, according to Weldemeskel and Dejene Mekonnen, another prospective driver who spoke to The Post.
Leslie Stevens, the landlord for the Colorado Springs building, also described the video call inspection process. She said she’d tried to work with Medicaid to ensure that the drivers, who were proving to be consistent tenants, complied with the rules and could stay in business.
“These people all live in the same community. Most are family. They all know each other. They communicate,” Stevens said. “Word (of the opportunity) spreads like wildfire, so we provided the office space.”
Many of the drivers believed to be involved in the scheme spoke a language common in Ethiopia, Bimestefer said, and they used similar bank information.
But the state Department of Health Care Policy and Financing declined to provide names or information about drivers suspected of fraud, citing the ongoing investigations.
Alleged fraud exploited Medicaid changes
The scheme took advantage of multiple recent changes to the transportation program.
Colorado lawmakers repeatedly have increased Medicaid reimbursement rates since the pandemic began, in a bid to boost the health care system that treats vulnerable Coloradans. Medicaid officials had expected that bump to draw in more providers, but they took notice when scores signed up in a matter of months this year.
And in early 2023, the state agreed to ease a geographic limitation, allowing patients to travel farther to seek drug treatment, Bonaguidi and Vincioni said.
After the fraud was discovered, the providers said, the state reinstituted a 25-mile cap on travel.
State and federal auditors previously have raised concerns about the program’s vulnerabilities. Federal regulators examined programs in several states last year and determined that varying proportions of transportation claims failed to comply with federal requirements — ranging from a low of 14% in one state to a high of 86% in another one.
A Colorado audit, released in 2021, found the state had paid out more than $5 million for claims that may not have been compliant — roughly 15% of the $33 million paid during a seven-month period.
Bimestefer, the head of the health policy and finance department, said the scheme in Colorado was related in some way to fraud detected earlier this year in Arizona and New Mexico. In those cases, low-income patients were targeted and driven to fake drug treatment facilities in Phoenix.
But she suspected Colorado detected its scam early. Medicaid officials say roughly 130 drivers are believed to have participated.
The state’s investigation and pause on enrollment of drivers “allowed us to stop 632 more providers who had the same demographics from coming into our network,” Bimestefer said.
“That’s why we’re saying this is unprecedented,” she added.
Providers said the scheme put patients’ health at risk, including the drug users. Even if they benefited from treatment, receiving it 100 miles from home wasn’t a recipe for long-term recovery.
“This was the most vulnerable population, and so it makes them an easy target,” said Bonaguidi, the University of Colorado provider. “This situation increases stigma for opioid treatment programs specifically, and patients receiving medications for opioid-use disorder and treatment for opioid-use disorder.”
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