Provider fee law sparks optimism on health care

By Richard Haugh

Colorado has joined 23 other states that assess fees on hospitals in order to boost funds available to pay for Medicaid services.

Gov. Bill Ritter signs House Bill 1293 into law as Sen. Betty Boyd, Rep. Jim Riesberg, Lt. Gov. Barbara O’Brien and CEO of Colorado Hospital Assn. Steven Summer look on.
Photo by John Schoenwalter/The Colorado Statesman

Gov. Bill Ritter signed House Bill 1293 into law on Tuesday before a gathering of elected officials, hospital executives and dignitaries at The Children’s Hospital satellite at St. Joseph’s Hospital, in Denver. The bill was sponsored by the Joint Budget Committee and 40 co-sponsors. Its primary sponsors were representatives Jim Riesberg, D-Greeley, and Mark Ferrandino, D-Denver, and senators Moe Keller, D-Wheat Ridge, and Betty Boyd, D-Lakewood.

Ritter said the new hospital fee would provide health coverage for at least 100,000 uninsured Coloradans and reduce the burden of hospitals to care for patients who can’t pay. That should reduce the need to shift those costs to insurance companies and employers, he said.

“This is the most significant piece of health care legislation to be passed in decades,” Ritter said before signing the bill.

It’s hoped the new revenue generated by the provider fee arrives in time for the state — faced with a huge budget shortfall — to prevent cuts in Medicaid payments to the state’s hospitals and doctors. Under the new law, payments to hospitals will rise to the maximum amount allowed by the federal government.

That will go a long way toward easing the impact of uncompensated care on hospitals such as The Children’s Hospital in Aurora, said Len Dryer, the hospital’s senior vice president and chief financial officer. The Children’s Hospital treats a disproportionately high number of children on Medicaid.

“The policy derived from the passage and implementation of this bill will have a tremendous positive impact on the health care of Colorado’s most vulnerable population,” Dryer said.

Riesberg added that the provider fee law would mean increased revenue to the state without raising taxes or increasing spending from the state’s general fund.

Lt. Gov. Barbara O’Brien, center, is lauded by Gov. Ritter for her efforts on behalf of health care, and is applauded by Rep. Jim Riesberg, left, Anna Sierra, Mark Laitos M.D., president-elect of the Colorado Medical Society and Steven Summer, CEO of the Colorado Hospital Assocation.
Photo by John Schoenwalter/The Colorado Statesman

“This is an ingenious way to keep health care affordable for everyone,” he said. “It’s the most vital health care expansion we’ve made in years.”

Under the law, most hospitals in the state will be assessed a fee. The amount of the fee has yet to be determined, but will be worked out by a 13-member oversight committee and sent to the state for approval, said Steven Summer, president and CEO of the Colorado Hospital Association. He noted that every hospital in the state supported the initiative.

“It’s not a silver-bullet solution to our health care problems,” Summer said. “But it’s quite a step forward.”

The state must seek approval of the program from the federal Centers for Medicare and Medicaid Services. That approval could come in as soon as six months, Summer said. Provider fee programs in other states have been operating for many years, and the government approval process is in place.

President-elect of the Colorado Medical Society Dr. Mark Laitos, center, discusses the act with Jean Nofles, left, and A.W. Schnellbacher as grandchildren Sylas Rosen-Lewis, 6, and Keelin Schnellbacher, 7, wait patiently.
Photo by John Schoenwalter/The Colorado Statesman

The money collected from each hospital will be pooled and used to draw down matching funds from the federal Medicaid program. The resulting money — as much as $1.2 billion, by some projections — will be used to expand health coverage for the state’s uninsured. It’s estimated that about 800,000 Coloradans are uninsured, including 180,000 children, and that about 440,000 residents receive Medicaid benefits.

The law will bolster the state Medicaid and Child Health Plan Plus (CHP-Plus) programs, and will provide enhanced funding for the current Medicaid system and for the Colorado Indigent Care Program (CICP). The provider fee program also will allow single adults without children to be covered under the state’s Medicaid program if they make 100 percent or less of the federal poverty level, or $10,830 per year.

Anna Sierra, a Lafayette mother of children on Medicaid, hailed the new law, and said it will benefit her family and others.

“This legislation is so important because it will provide peace of mind to all the families that need it the most,” she said. “It will slow down the cost of care and make it more affordable for working families.”

Sen. Betty Boyd said many share Sierra’s dream of improved, affordable care. She said the bill is necessary now, not later, as the uninsured “can’t persuade their illness to wait for health care reform.”

Anna Sierra of Lafayette with her 2-year-old son, Francisco, tells the audience how the Healthcare Affordability Act will help her three children, as well as other families.
Photo by John Schoenwalter/The Colorado Statesman

“That’s why it’s important that we continue moving forward with the building blocks that cover more people and provide much needed additional reimbursement (to providers) serving the disadvantaged community,” said Boyd, who is chair of the Senate Health and Human Services Committee and one of the primary bill sponsors.

“The current health care system is not sustainable. This proposal came from a group of stakeholders — the hospitals — agreeing to take on the burden of the fee so that a meaningful solution could be reached,” said Russ Johnson, CEO of the San Luis Valley Regional Medical Center. “In many rural communities, the hospital is the only health care provider. At the same time, there is often a large proportion of residents that are uninsured, or on Medicaid or CICP, so the provider fee will be very beneficial to rural hospitals in those communities.”

Ritter’s office, the Colorado Hospital Association and the Department of Health Care Policy and Financing have been working on the bill for just about a year — a fairly short time for a complex program. Other state legislatures took more time — for some, a number of years — to debate their versions of the provider fee.

Colorado, however, has some experience with the concept. Last year, the Legislature passed, and Ritter signed into law, a similar program for nursing homes.

The measure was supported by hospitals, physicians, consumer groups and business representatives. Lt. Gov. Barbara O’Brien applauded the cooperation of so many groups that often are at odds on other issues.

“We found that we have to be incredibly creative and collaborative when it comes to addressing the health care challenges that face Colorado citizens,” she said.

The plan will be submitted to the federal Centers for Medicare & Medicaid Services (CMS) for final approval. Implementation is expected to begin in the spring of 2010. A 13-member Oversight and Advisory Committee will be responsible for working with the Department of Health Care Policy and Financing to implement the new law.