Colorado Medicaid agency could claw back $60 million from Denver Health and rural hospitals

Colorado s Medicaid agency says a fresh court verdict could force it to claw back and redistribute nearly million in funds from Denver Healthcare and rural hospitals but industry groups contend the state is overselling the impact and should eat the costs The Colorado Department of Soundness Care Guidelines and Financing lost a development in Denver District Court in May over a seemingly academic question whether UCHealth s Memorial Hospital in Colorado Springs and Poudre Valley Hospital in Fort Collins are publicly or privately owned Both hospitals belonged to local governments before UCHealth signed a lease to take over their operations in The state had labeled them as general hospitals but the court ruled that they were privately owned Whether they are masses or private matters because of Colorado s provider tax Last year Colorado hospitals paid about billion in provider taxes drawing down million in federal matching funds While the formulas are complicated the general upshot is that hospitals that treat more Medicaid patients receive a greater share of the combined provider tax funds and federal match while those that treat relatively scarce lose money Out of hospitals that paid the tax came out ahead Last year Memorial Hospital came out ahead by about which is one of the smaller margins among the hospitals that benefited Poudre Valley lost about million Memorial sees more patients covered by Medicaid though the hospitals also have other differences that factor into their shares of the provider tax The state pools the provider tax money from hospitals with the same ownership type That means if Memorial and Poudre Valley are privately owned their share of the tax goes into the private pool leaving less money for publicly owned hospitals to split And since each hospital s share depends on how its Medicaid recipient load compares to its specific pool the two UCHealth hospitals could get more if they compare favorably to other privately owned facilities Think of it like transferring between two classes that grade on the curve but have different curves because of their mixes of students The Department of Wellbeing Care Guidelines and Financing which runs the state s Medicaid scheme filed an appeal Wednesday HCPF believes the district court erred in its decision and is working toward a favorable outcome in the Court of Appeals the department commented in a message HCPF also continues to work with UCHealth the Colorado Hospital Association and the impacted hospitals toward a resolution that leads to a more productive outcome If the appeal doesn t go the state s way and it has to redistribute the - payments citizens hospitals would have to give back a combined million which private hospitals would then divide up the department explained It didn t specify how much would go to the two reclassified hospitals or others owned by UCHealth Greater part of the state s inhabitants hospitals belong to rural counties or special districts Denver Vitality is a notable exception The state s calculations show it would lose million but Denver Vitality declined to comment on those projections UCHealth spokesman Dan Weaver reported the system urged the Department of Medical Care Agenda and Financing to reclassify its hospitals in because of concerns the federal cabinet could determine the whole provider tax undertaking is out of compliance not as a way to bring in more money When the agency failed to take action the system sued he reported This is not about the dollar figure he noted The department should use its own funds to make rural hospitals whole so they don t bear the brunt of the clawback Weaver declared The Colorado Hospital Association declared discussing clawbacks is premature because the department requirements to discuss any changes with stakeholders and with the boards overseeing the funding Multiple revenue streams attempt to compensate hospitals for underpayments from Medicaid so the state might need to direct other money to community facilities Related Articles undocumented Coloradans could lose Medicaid coverage under Trump tax bill Colorado representatives blast Republican Senate tax bill as final passage and Medicaid cuts loom Colorado won t say if it will turn over Medicaid facts that feds could use to find immigrants Medicaid individual region physical condition insurance would be harder to get in Colorado under GOP bill Colorado s new Behavioral Soundness Administration is ready to invest Now budget cuts are on the way Zachary D Argonne president CEO of Eastern Plains Healthcare Consortium mentioned the state hasn t explained how it came up with what each hospital would owe The department s calculations show of the independent hospitals in the consortium will have to give back funding ranging from at Haxtun Robustness on the Eastern Plains to million at Arkansas Valley Regional Diagnostic Center in La Junta Not every hospital could repay those amounts and those that have sufficient funds typically were saving to invest in their services D Argonne announced If a court ordered them to turn over money they don t have hospitals would have to close unprofitable departments such as primary care behavioral fitness or obstetrics he revealed If someone has to compensate the private hospitals it should be the Department of Wellness Care Guidelines and Financing which misclassified the two UCHealth hospitals D Argonne disclosed No rural hospitals in the state created this error he explained We followed the formula We paid in what we re supposed to pay in Sign up for our weekly newsletter to get wellness news sent straight to your inbox