Statehouse designates “Protecting Rural Hospitals Day” as small towns brace for cuts

Colorado lawmakers and hospital executives on Wednesday made it clear that small town healthcare faces the fight of its life in the coming year.

A resolution to declare March 8 “Protecting Rural Hospitals Day” passed unanimously in both chambers of the Colorado legislature yesterday, but budgetary constraints are worrying rural health leaders.

Colorado hospitals face a reduction in Medicaid funding of up to $390 million under a potential cut to the hospital provider fee that Gov. John Hickenlooper suggested in his 2017-2018 budget plan.

The fee is a state program that requires hospitals to pay money each year depending on the coverage they provide — some hospitals pay a lot, and some don’t pay any. The money is then matched almost dollar for dollar by the federal government and used to expand Medicaid, provide health coverage for Coloradans who are using emergency rooms for non-emergency treatment, and reimburse hospitals, especially rural hospitals, for care.

RELATED: What’s Colorado’s hospital provider fee, who cares and why?

The fee brought in nearly $700 million in 2015. In a proposal to address a projected state budget shortfall of more than a half billion dollars for 2017-2018, the governor proposed lowering the existing cap on the fee by $195 million. By reducing that stream of revenue, the state stays below limits set by the TABOR — the Taxpayer’s Bill of Rights. Going above the limits triggers provisions that require rebates to taxpayers. But the governor’s proposed cut also means losing the federal match, hence the $390 million loss of funding to hospitals.

Healthcare expert Steven Summer, the CEO and president of the Colorado Hospital Association, called the proposed cut “unprecedented” and compared the potential community impact to the economic struggle in Burlington, Colorado after the closure of the private Kit Carson Correctional Center.

“It’s a chilling and sobering thought to wonder if we’ll be reading similar stories in six months about rural communities who have seen their hospitals close,” he said.

Lt. Gov. Donna Lynne said the proposed cut to the fee was “done really as a last resort. Our hope is that we get a solution to the hospital provider fee problem.”

But that hope may have been quashed Wednesday afternoon, after a bipartisan bill that proposes to bring in $3.5 billion for transportation was introduced. Some Democrats at the state Capitol have been holding out hope that the state’s transportation needs would prove pressing enough to persuade Republicans to move the hospital provider fee entirely out from under TABOR restrictions. That incentive now dims as the newly introduced transportation bill instead relies upon sales tax increase and reductions in the state budget.

Lynne also acknowledged that ending the Medicaid expansion program as proposed by Republicans in Congress earlier this week would hurt the state budget and put Coloradans at risk. Under the current Republican healthcare proposal, she said, the state will soon face an annual budgetary shortfall of $1 billion if it continues to provide the same care and coverage.

Konnie Martin, CEO of San Luis Valley Health in Alamosa, said “we drive the economy in the San Luis Valley.” San Luis Valley Health provides over 650 jobs to the community, the largest employer in the area.

CEO of Lincoln Community Hospital Kevin Stansbury said the cuts could devastate rural communities like his.

“If we have to shrink our services — or worse, close our hospitals — patients would lose access to care, employees would lose their jobs, and many young people would see their futures put at risk,” he said.

Republican Sen. Jerry Sonnenberg, whose northeastern District 1 is home to 11 rural hospitals, said that protecting rural healthcare is his “number one priority” and that access to a rural hospital is often “a matter of life and death.”

Sonnenberg told hospital executives that, according to the state Joint Budget Committee, the hospital provider fee currently faces cuts of $150 million to $200 million. “The scary part of that,” he said, “is it could be double that. You know as well as I do that you can’t stand a $200 million cut; we sure as hell can’t stand double that.”

Photo credit: Andrew Malone, Creative Commons, Flickr 


  1. Loss of rural hospitals is the most immediate disastrous consequence of the “health reforms” initiated by Republicans and those working within the constraints of Republican/conservative views of how government should work (e.g., TABOR, no change to hospital provider fee, devolution of Medicare and Medicaid to state control).

    Once broken, it will take years to reverse. Recruiting doctors to rural areas is not an easy task. Finding support staff will be nearly as difficult. If not reversed quickly, communities will face the need to make substantial capital investments to reconstruct facilities and buy modern equipment.

  2. of course republicans will vote against the best interests of those they are supposed to protect…republicans suck….

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