As managing attorney at CCLP, Ellen K. Giarratana advocates for the equitable enforcement of legislation, representing community members in litigation in our four focus areas (food, health, income, housing) while working to improve racial equity. Staff page ›

Jun 3, 2022

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Public benefits theft after the legislative session

by | Jun 3, 2022

Each year, dozens of Coloradans are criminally charged with Medicaid fraud. The prosecutions are not just limited to those who lie to receive public benefits for which they know they are not eligible. Defendants often include those facing poverty who may have already been receiving benefits, who provide misinformation to the counties through the application or recertification process.

The truth is, applying for public assistance is complicated, particularly for non-English speakers, and it involves a mountain of paperwork and documentation to demonstrate eligibility. Making matters more complicated, eligibility differs for each type of public benefit individuals apply for, such as Medicaid, Supplemental Nutritional Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF). What is sufficient documentation for one program may not cut it for another. As a result of these complexities, even those who may be eligible for some type of Medicaid program may inadvertently provide incorrect estimates of their monthly income or inaccurate reporting of their household composition for another benefit.

When a county discovers that an individual has provided misinformation to receive benefits, it may refer the case to the local district attorney to prosecute for theft. The grade of the theft offense differs based upon the value of the property stolen. Petty theft, for example, includes anything less than $50 and carries a maximum 6-month sentence in prison while a class 4 felony for a value between $20,000 to $100,000 carries a 2-to-6-year sentence in prison. Any theft conviction also requires that the defendant pay restitution back to the government and includes a host of collateral consequences.

In the case of Medicaid theft, the Colorado Supreme Court had the opportunity last year to determine whether the value is based on the total amount of benefits paid to the recipient or the difference between the total paid and the amount the defendant was actually eligible for.

Unfortunately, the Court held that all benefits a defendant receives through submitting false information counts towards the value calculation of property stolen. In other words, even if the defendant was entitled to the benefits that she received despite the false information, she is still criminally liable for the full amount of benefits paid by the state. This conclusion will always result in harsher penalties for those found guilty of theft.

CCLP and the National Health Law Program (NHeLP) did not agree with the Court’s holding and filed an amicus brief alongside the defendant’s petition for rehearing. Our amicus emphasized the difficulties in accurate and timely reporting of changed circumstances, the flexibility our federal government provides to beneficiaries in navigating the Medicaid program, and, perhaps most importantly, the fact that Medicaid is an entitlement for eligible individuals.

Because Medicaid is an entitlement, the benefits belong to the beneficiary and cannot be “taken” from the government. Our amicus also stressed that criminal prosecutions against eligible individuals creates a chilling effect, ultimately deterring Coloradans from enrolling in and fully benefiting from Medicaid.

Despite our efforts, the Court denied the petition for rehearing, with Justices Berkenkotter, Márquez, and Hart dissenting. Disappointed with the result, we sought a legislative fix at the capitol, taking the lead from Justice Berkenkotter’s dissenting opinion. In her dissent, Justice Berkenkotter noted how different public benefits theft is from the type of theft typically prosecuted, and she cited to other state laws that distinguish it. She then urged Colorado to adopt a similar approach.

House Bill 22-1224 and Section 10 of HB22-1257, now both signed into law, do just that. Prior to session, CCLP requested that the Commission on Criminal and Juvenile Justice (CCJJ) consider adding public benefits theft as a unique crime separate and apart from theft to the bill it was putting forward. The CCJJ agreed to include the narrow issue in the supreme court’s decision – calculating value – while Representatives Tipper and Soper and Senadora Gonzales sponsored a separate bill to address intent for these cases.

Together, these laws ensure fairer prosecutions of people receiving public benefits. Specifically, these laws prevent prosecutors from pressing charges against individuals who simply make a mistake or have difficulty navigating the public benefits process. For those that do get prosecuted, the value of the theft will be limited to the money they received beyond that to which they were entitled. CCLP is grateful to the CCJJ and the bill sponsors for swiftly addressing this issue, so that no other beneficiary will find themselves with an unnecessary criminal record.

Read our amicus in the CCLP resource library here.

Learn more about HB22-1224 on our Legislative Priorities page.

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