Colorado Expands Medicaid
May 06, 2009
Article published April 27, 2009
Colo. expands Medicaid
‘Provider fee,’ matched funds to generate $1.2 billion
By Andis Robeznieks
Posted: April 27, 2009 - 5:59 am EDT
Hospitals that treat Medicaid patients in Colorado can expect to reap a windfall of $1.2 billion as a result of a new law signed by Gov. Bill Ritter last week.
The law signed April 21 places a “provider fee,” or tax, on hospitals designed to raise $600 million that—when matched with federal funds—will add $1.2 billion to the state’s Medicaid pool and provide coverage for 100,000 uninsured state residents.
At a bill-signing ceremony, Ritter said it was one of the most important bills to go through the current Legislature and added, “It’s also, I believe, the most significant healthcare reform bill that we’ve seen in Colorado in decades.”
The bill, called the Colorado Healthcare Affordability Act, was supported by the Colorado Hospital Association. An exact formula has not been set, but CHA President and CEO Steven Summer said in February that it’s expected hospitals will be assessed a 2.5% to 3% “fee” on all discharges not paid by either Medicare or Medicaid.
Under federal regulations, the fee could not go above 5.5%. The plan outlined in the law still needs approval by the CMS.
Colorado Hospital Association board member Bob Malte, who is also president and CEO of 423-bed Exempla Lutheran Medical Center, Wheat Ridge, said that the goal is to submit the final plan to the CMS by Aug. 1, receive approval by April 1, 2010, and for the money to start moving by July 1, 2010. “We have no reason not to believe that it won’t be confirmed by the feds since we followed the path of others,” said Malte, noting that at least 20 other states have already instituted hospital provider fees.
Malte said, in particular, the extra funding will help in opening access to more behavioral health programs for Medicaid beneficiaries. Also, because Medicaid beneficiaries will be receiving healthcare that is more coordinated and less episodic, Malte said that there should be less uncompensated care delivered in the state’s emergency departments.
But, even with providing coverage for 100,000 people, that will still leave an estimated 700,000 Coloradans without insurance. “This is a law that addresses that sad reality; not unlike other parts of the country, we’ve seen uncompensated care increase dramatically,” said Gary Campbell, president and CEO of Centura Health, Englewood. “This won’t solve the problem, but it is a step in the right direction. There are going to have to be other mechanisms to address the totality of the issue.”
Campbell added that a goal of the law was the fair distribution of the fee-generated funds, so that the hospitals that provide the highest volume of Medicaid-reimbursed and uncompensated care will get the highest volume of compensation from those funds in return.
“We all share in this responsibility,” Campbell said.