Medicaid Reimbursement

Page Updated: May 23, 2024

CHA Advocacy Principle: Maximize reimbursement through the annual state budget process and Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) program.

What Has Been Completed:

• • Origin: Hospitals receive reimbursement from base rates based on services provided to Medicaid enrollees. Additionally, hospitals receive supplemental payments through the Hospital Provider Fee. Within those categories, there are two pertinent areas to watch for ongoing advocacy in 2023:
    • Inpatient Base Rates: In February 2024, CMS approved HCPF revised impatient hospitals base rate methodology which will be effective July 1, 2023.
    • Hospital Provider Fee: In addition to base rates, hospitals receive supplemental payments through the Hospital Provider Fee, a program governed by the CHASE Board.
  • Background: CHA engages in significant advocacy related to HCPF’s reimbursement in coordination with member hospital CFOs.
    • Inpatient Base Rates: Over the past two years, HCPF has introduced a new inpatient base rate methodology to determine how hospitals are reimbursed for Medicaid inpatient services. In October and November 2022, HCPF held hospital stakeholder engagement meetings to discuss the final proposed changes to the inpatient base rate methodology.
    • Hospital Provider Fee: At the June 23, 2024 CHASE board meeting, HCPF will present the 2023-24 hospital provider fee calculation. Following strong advocacy from CHA and our members, during the meeting, HCPF will present a recommendation to establish the Medicaid upper payment limit (UPL) at 99.25% for the 2023-24 CHASE model, apply 99.25% retroactively to the 2022-23 CHASE model, and indicate their intent to set the UPL at 99.25% in future years. 

Outstanding Items:

• • Hospital Provider Fee: In June, HCPF will present the full CHASE model to the CHASE board including the detailed hospital reimbursement amounts. HCPF will ask the CHASE Board to approve the CHASE 2023-2024 model shared in April 23 meeting at 97.2% of UPL, located here, as an interim calculation pending preparation and support to increase payments to 99.25% for 2023-24 and 2022-23. Implementation of the 99.25% models will occur upon successful completion of a CMS financial performance review (FPR) of the 2020-21 UPL, expected in December 2024, and after review and discussion with stakeholders and the CHASE Board. Following the CHASE Board, the Colorado Medical Services Board (MSB) must approve the change.  Both the CHASE Board and MSB meetings are open to the public and hospitals will be encouraged to attend and comment. Once the updated model is approved, any further changes must go back to the CHASE Board for approval.
  • Inpatient Base Rates: HCPF updated APR-DRGs to version 40 proposed weights. The updated weights and hospital impacts, calculated by HCPF, are posted here. This payment change still needs to be approved by CMS.
  • Outpatient Rates: Based on feedback from CHA and hospitals, HCPF has begun to explore options to reimburse outpatient drugs outside the current EAPG methodology. Over the next few months HCPF will begin soliciting feedback on potential additional options to reimburse hospitals for providing drugs to patients. HCPF will be discussing this process during the hospital stakeholder engagement meetings, the schedule can be found here.

Resources: 

• • Hospital Provider Fee: HCPF CHASE Information for Providers
  • Inpatient Base Rates
  • CHA UPL sign on letter
  • CHA HCPF response lette
  • CHA UPL recommendations
  • CHA comments on the proposed CHASE 2023-24 model email
  • CHA Polis Administration long form
  • CHA Polis proposals summary
  •  

Meetings/Dates of Note:

• • Monday, June 3 – CHASE board meeting

CHA Staff Contact: Ryan Westrom, CHA senior director of finance, [email protected]