Optimizing Medicaid: New Federal Funding and Stronger Medicaid Program for Colorado
What You Need to Know:
A Win-Win Proposal
For 15 years, the hospital provider fee (i.e., CHASE fee) program has ensured Medicaid coverage for hundreds of thousands of Coloradans by drawing down billions in federal funds, while also supporting and stabilizing hospitals statewide. Colorado now has an opportunity to optimize this program, all within its current framework and guidelines, by drawing down at least an additional $150 million to support Medicaid patients and hospitals.
Key Points/Hospital Perspective:
- For 15 years, the hospital provider fee (i.e., CHASE Fee) program has ensured Medicaid coverage for hundreds of thousands of Coloradans by drawing down billions in federal funds, while also supporting and stabilizing hospitals statewide.
- Since its inception, significant events – including ACA Medicaid expansion, the COVID crisis, and new federal funding flexibility – have dramatically changed the health care landscape. Colorado now has an opportunity to optimize this program by drawing down an additional $150 million to support Medicaid patients and hospitals.
- This win-win proposal will protect patient access to care and help stabilize our health care infrastructure with no new investment from the state’s General Fund.
CHA Contact: Bridget Frazier, senior manager of public policy | [email protected]
The Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) Fee leverages federal funding to support Medicaid, a critically important safety net health care program. It has enabled Colorado to expand Medicaid to more than 600,000 people and significantly support state administrative costs. CHASE is overseen by a governor-appointed board consisting of hospital and health care experts, consumers, and HCPF.
Now is the time to modernize and evolve the CHASE Fee. We can substantially increase federal Medicaid revenue without any cost to the state budget by:
- Using a new “State Directed Payment” to maximize federal funding for Colorado’s Medicaid managed care program
- Refreshing and improving the CHASE program without changes to non-hospital funding allocations
While the CHASE program has been revised annually, it has not been substantially updated since its inception. In recent years, CHASE revenue distribution has gotten out of balance, with a substantially increasing percent of funding going to coverage costs and administration, not hospital payments. That trend is unsustainable for Colorado hospitals and threatens the viability of the program overall. This is an opportunity to evolve the program to ensure its long-term sustainability and success.
