Colorado’s Medicaid program has moved to terminate its provider agreement with home care provider FreedomCare of Colorado. 

The provider went from receiving about $1 million in Medicaid payments last year to nearly $22 million so far this year, according to the Colorado Sun. That spending increase drew scrutiny, but the grounds cited for termination center on alleged operational failures and risks to clients.

My reporting found that the Colorado Department of Health Care Policy and Financing identified what it described as a pattern of abuse, according to the termination letter sent to FreedomCare. The state alleged failures in oversight and care delivery affecting more than 700 members across 17 counties. 

FreedomCare disputes the state’s action and obtained a preliminary injunction allowing it to continue serving existing clients pending further proceedings, according to the Sun. The company did not respond to my request for comment by the time of publication. 

Regardless of the outcome of the court case, we can dive into the information and see what it says about how states are approaching Medicaid home care program integrity.

In this week’s exclusive, members-only HHCN+ Update, I’ll use the FreedomCare example to discuss program integrity and enforcement, offering analysis and key takeaways, including: 

— The allegations behind Colorado’s termination action

— How Colorado’s enforcement approach compares with Ohio’s

— What providers should know heading into 2027

Inside the FreedomCare case 

On Sept. 16, the Colorado Department of Health Care Policy and Financing sent a letter alerting FreedomCare that its agreement with the state’s Medicaid program would be terminated. 

For some background on the company: FreedomCare operates in 15 states, including Colorado. The company helps eligible Medicaid recipients choose their own in-home caregiver and ensures that the caregiver gets paid through the Medicaid program. FreedomCare manages enrollment, payroll, training and compliance while the person receiving care directs their own care plan. The company completed its initial licensing and certification surveys in May 2022.

Paid family caregiving has become part of the broader debate over Medicaid program integrity. RFK and Dr. Oz have specifically called them out as rife with fraud or as services that family members have historically provided for free. Home care advocates have responded critically to such portrayals, saying they diminish the work of direct care workers and imply that family members should give up their jobs to care for their loved ones. For additional context, Ohio lawmakers have considered, then removed, a provision that would have banned Medicaid payments to family caregivers after advocates pushed back.

The timeline for FreedomCare’s alleged violations starts in April of 2025, when Colorado officials attempted to conduct a survey inspection of the agency. According to the state, the agency reported that its owner was out of the country and no backup administrator was available. This led the state to call it a failure to complete the survey due to lack of compliance.  

FreedomCare then submitted a plan of correction regarding the regulatory compliance violations, which the Colorado Department of Public Health and Environment accepted in May 2025. But when officials revisited the agency to conduct survey inspections in October 2025, the owner was again reportedly unavailable and no backup administrator was present.

When officials successfully completed the survey between July and August 2026, they found 27 deficiency tags. The survey also resulted in nine immediate-jeopardy calls requiring immediate correction. According to the termination letter, officials found significant and widespread noncompliance. If you’re into the specifics, here are the details:

“Specifically, your agency failed to investigate, document, and resolve complaints; failed to implement an effective complaint process; failed to have alternate or back-up staff available when scheduled caregivers were unable to provide services; failed to complete required skills validations for staff; failed to conduct caregiver background checks; and failure to maintain care plans and documentation,” the letter read.

The letter also said that agency oversight conducted from outside Colorado and, at times, outside the United States was a particular concern because adequate systems and staffing were not in place to ensure members’ needs were met. In addition, the state said the agency had very limited Colorado-based staff and did not appear to have sufficient local staffing for in-person oversight or backup care when a regular caregiver was unavailable.

“Rather than effectively coordinating alternative coverage or otherwise ensuring members’ identified care needs were addressed, multiple members were placed on hold and did not receive needed services,” the letter read. “This resulted in circumstances of neglect and demonstrated a significant failure to ensure continuity and coordination of care that is required.”

Colorado told FreedomCare that the agency was no longer approved to accept new Medicaid clients and would not reimburse services rendered to them. It said it would continue to pay for covered services for existing clients for up to 60 days after the letter was sent.

FreedomCare has offered a different account of its response. According to the Sun, the company said it corrected the findings and sent a team of 36 people, including 13 registered nurses, to Colorado to address the deficiencies. Its attorney also argued that regulators did not return to verify the remediation.

The company argued that transferring its clients would disrupt care for hundreds of vulnerable people. A preliminary injunction allowed it to continue serving existing clients pending further proceedings, and the Sun reported that an administrative hearing was scheduled for Oct. 29–30.

The state alleges that FreedomCare’s operations put members at risk, while the company argues that forcing a transition would itself threaten continuity of care. The injunction does not settle the underlying dispute over the deficiencies or whether the company’s corrections were sufficient.

The bigger picture

Colorado’s move to terminate FreedomCare’s Medicaid provider agreement adds another layer to the state-level enforcement push reshaping home-based care.  

Another state Medicaid enforcement news item came in June, when Ohio’s Medicaid program suspended payments to 49 home health providers whose billing patterns triggered potential fraud concerns.

In both Ohio and Colorado, financial indicators drew attention. Ohio used billing-pattern analysis to identify providers for review, while FreedomCare’s jump from about $1 million to nearly $22 million in Medicaid payments drew state scrutiny. 

There are differences here. Ohio flagged potentially suspicious billing patterns, while Colorado saw a substantial spending increase. Additionally, Ohio interrupted payments while reviewing providers, while Colorado sought to end a provider’s participation in the program.

Financial indicators drew attention in both states, but Colorado’s case shows that enforcement grounds can extend beyond billing concerns. The termination letter cites regulatory noncompliance and alleged care-delivery, oversight and safety breakdowns —not an adjudicated finding of billing fraud.

In my earlier Ohio coverage, I focused on the shift away from “pay-and-chase” and toward efforts to prevent questionable payments in the first place. Colorado adds another dimension: Program integrity also involves whether an agency can demonstrate that members receive the services they need and that required safeguards are functioning.

That does not mean Ohio and Colorado are following an identical playbook. They are using different tools to address different concerns. But both cases illustrate how an enforcement action can threaten a provider’s revenue or continued participation before the underlying dispute reaches a final resolution.

Colorado’s budget pressure is also relevant. The Sun reported that the state faces a $1.6 billion shortfall, driven largely by Medicaid spending. That helps explain the stakes around Medicaid expenditures, but it does not establish that the termination was budget-driven. The stated grounds remain regulatory noncompliance and member safety.

For providers, the takeaway is broader than “watch your billing.” Accurate claims and evidence of service delivery matter, but so do complaint handling, caregiver screening, backup coverage and the ability to demonstrate that corrective actions have actually been implemented.

Program integrity outlook

The FreedomCare example is a potential enforcement signal, not evidence that specific regulatory changes are coming. The practical takeaway is that providers need demonstrable backup coverage, accessible leadership, completed screening and skills validation, functioning complaint investigations and current care records. 

Regardless of how the court case turns out, it’s also a reminder that an accepted plan is not the same as evidence that deficiencies were fixed and stayed fixed.

I’ll be watching the administrative outcome of this case to see how regulators weigh remediation, repeated noncompliance and continuity of care. Looking into 2027, providers should walk away knowing that their response to scrutiny needs to show what changed in practice — not just what they promised to change.

Providers should also understand the enforcement tools available in their own states. Ohio’s payment suspensions and Colorado’s termination action carry different consequences and procedural requirements. Knowing how to respond, what documentation is needed and which appeal deadlines apply is part of being prepared.

The other issue to watch in 2027 is how states protect access when they restrict a provider’s operations. Enforcement cannot be assessed solely by the number of providers suspended or the dollars withheld. It also matters whether affected members can transition to another agency without losing necessary services.

That is not an argument against enforcement. In Colorado, the state alleges that members were already going without needed care. But it all serves as a reminder that protecting Medicaid’s integrity and preserving access to care have to go hand in hand. Heading into 2027, providers should be prepared to demonstrate that their safeguards work in practice.