Oppose Rate Setting
Reject Dangerous Rate-Setting Restrictions on Hospitals
Oppose House Bill (HB) 25-1174
What You Need to Know:
Like hospitals, Community Health Centers are struggling with Colorado’s failed Medicaid re-enrollment effort following the COVID-19 public health emergency. Solutions must support the entire health care system and force meaningful accountability for the state’s failures. Proposals that deplete one part of the safety net to save another are destabilizing, dangerous, and must be rejected.
Key Points/Hospital Perspective:
Policies cannot deplete one part of the health care safety network to save another.
- Hospitals stand in solidarity with community health centers around the state and agree that the health care safety net must be safeguarded from the financial crisis created by Colorado’s failed Medicaid redetermination.
- Proposals for rate-setting restrictions will reduce reimbursement at a time when 70 percent of Colorado hospitals are financially unsustainable and there is unprecedented uncertainty at the federal level.
- Hospitals already fund $5 billion for the state’s health care system with current payments for Medicaid, HCPF administrative costs, out-of-network hospital rate setting, Colorado Option rate setting, and more.
CHA Contact: Bridget Frazier, senior manager of public policy | [email protected]
HB 25-1174 Is Dangerous Policy
HB 25-1174 – Reimbursement Requirements for Health Insurers would cap hospital reimbursements for the State Employee Health Plan and small group market at 165 percent of Medicare, with a carve-out for critical access hospitals. The state’s anticipated savings would be applied to the Primary Care Fund to support community clinics starting in 2027.
- This misguided policy harms hospitals and further shifts costs across payers.
- Many hospitals are carved out of the bill, signaling that the policy is flawed; CHA’s rural hospitals do not support the bill.
- This bill does not enable reimbursement for the continued surge of uninsured patients; it does nothing to solve the underlying problem of re-enrolling 500,000 patients in coverage they need and qualify for.
- The bill would do nothing to help community clinics that are at risk now, as any new funding would not be available until at least 2027.
Lawmakers should instead focus on supporting the entire health care system and forcing meaningful accountability for the state’s re-enrollment failure.
In that spirit, CHA and its member hospitals are willing to participate in conversations that lead to reasonable ideas and solutions.
CHA corrected several inaccuracies at the press conference announcing the bill:
- Medicare reimbursements cover the cost of care.
- Medicare is Colorado’s worst payer – covering only $0.73 on the dollar of what it costs to provide care.
- Rural and critical access hospitals (CAHs) are one and the same.
- Of the 43 hospitals in rural Colorado, 32 of them are CAHs, leaving 11 small hospitals vulnerable to this legislation.
- Cost shifting does not exist.
- In the latest annual CHASE Fee report from the Colorado Department of Health Care Policy and Financing, which stated the payment-to-cost ratio in Colorado is 1.0, the state not only acknowledged that cost shifting exists but showed that cost shifting is necessary for hospitals to recover losses from care provided to publicly insured patients.
Other states have attempted to implement reference-based pricing, based on a percentage of Medicare, with disastrous results. These changes reduced provider reimbursement by billions and disrupted strong provider networks.
Remember: Medicare fails to reimburse hospitals for the cost of care.
Similar bills in other states drove providers out of network, decreasing access to care:
- In North Carolina, no hospital participated in the network.
- In Montana, just 14 out of 59 hospitals participated in the network.
- In Oregon, only 24 out of 70 hospitals participated in the network.
