Lawmakers pull provider fee bill back from the brink, negotiations continue

The state Capitol erupted this morning in dueling press conferences as lawmakers worked to salvage a deal that would convert the state’s hospital provider fee program into a government-owned business, freeing up millions of dollars for state spending.

The bill, known as Sustainability of Rural Colorado, would change the provider fee, a program that funds health care for low-income Coloradans, into an enterprise, or government-owned business. Doing so would keep the state from reaching constitutionally mandated revenue limits, allowing Colorado to bring in more money to pay for such things as education and transportation projects. Also included in the bill, a “Christmas tree” of dollars for rural schools, transportation, higher education and small business.

The bill is in its “Golden Hour,” said Steve Summer, CEO of the Colorado Hospital Association, referring to the hour after a critical injury or medical emergency when a person needs to reach life-saving care. Summer and the CEOs of Denver Health and Children’s Hospital applauded the work already done by lawmakers and encouraged them to get the bill to the finish line. “Time is of the essence,” Summer added. “Lives are at stake.”

If the bill doesn’t pass, as many as a dozen rural hospitals could close and other hospitals will have to cut back on services and medical programs for low-income Coloradans who currently rely on Medicaid and provider-fee dollars to pay for those services, according to the hospital executives.

The current point of contention: Medicaid co-pays. Under a draft of the agreement, Medicaid recipients would have to pay the maximum co-pay allowed under federal law, which varies by income. Currently, certain Medicaid patients in Colorado pay about $2 for doctor visits, $10 per day for inpatient hospital stays and $1 for generic prescriptions. The agreement would quadruple the copays for some services.

Becker’s write-up of the deal, with Sonnenberg’s signature

Republican Senate President Pro Tem Jerry Sonnenberg of Sterling, who led off the dueling press conferences this morning, told reporters that all of the sponsors had signed off on the agreement last Wednesday in a breakfast meeting at the Fork and Spoon. As he described it, Democratic House Majority Leader KC Becker of Boulder, one of two House sponsors, wrote down the details on a piece of paper  and slid it across the table to Sonnenberg, asking him to sign it, which he did.

Sonnenberg pointed to a whiteboard in his office that showed those details as of last Tuesday, before the Wednesday meeting. Medicaid copays was included on that list.

But the note signed by Sonnenberg, which was shared with reporters, does not include the provision on Medicaid co-pays. Sonnenberg told The Colorado Independent that much of what’s on that Wednesday breakfast note is no longer accurate and that he should have read it more closely before signing it. 

Related: Provider fee deal falling apart, rural schools say “leave us out.”

In a press conference of her own, Becker told reporters that she had never agreed to provision on the Medicaid copays. She acknowledged that it was discussed but said it was not something to which Democrats would agree.

The deal, while hitting a stumbling block, is not dead, lawmakers insist. Becker and Sonnenberg were optimistic that they can still come up with an agreement in the waning days of the session. ”It’s fantastic that we’ve reached a lot of bipartisan compromise on the biggest issues,” Becker said. “We’re working through some of these because all the pieces don’t always fit,” and the numbers are still moving as more information comes in,” said Sonnenberg. “We’ve worked very hard on this and we will continue to work hard to solve it…I’m not giving up.” 

Up until today, the biggest sticking point was by how much to reduce the state’s revenue limit set by the Taxpayer’s Bill of Rights (TABOR) if the hospital provider fee is reclassified. Because that fee is currently counted against the state’s limits, moving it into its own enterprise fund would mean the state can now bring in more revenue — somewhere between $500 million and $600 million a year. For Republicans, reclassification amounts to a circumvention of the will of voters, and they argued that the limits should be lowered by roughly the same amount reclassified to keep the state on a tight spending leash.

Think of it as the state having two jars: one brimming to the top, the other empty. Reclassification essentially pours water from the first jar to the second. Democrats want to refill the first jar. Republicans want to replace it with a smaller jar. To carry the analogy further, without that second jar, lawmakers must figure out a way to keep the first from overflowing (triggering tax refunds). The solution was to ask hospitals to reduce the provider fee they send to the state, which, in turn, reduces the federal matching grant. That’ll lower overall revenues, but will also leave hospitals grappling with a more than $500 million budget cut. 

Democrats initially said they would not go for any lowering of the revenue limit, but, after some back-and-forth, both sides agreed to lowering the limit by $200 million.

The two sides also have agreed on $1.8 billion in transportation funding, paid for with $50 million in state revenues, another $50 million from a transportation trust fund and $50 million from Department of Transportation funds that had previously been used to pay for a bond measure from 2000 that is now paid off. Another agreed-upon provision would allow small businesses to receive a tax credit against taxes paid on business property valued at up to $25,000.

Smaller sticking points also remain: how much should go to rural schools, which this morning was at $10 million for each of the next three years. There’s also some discussion about how much to lower the administrative fees on the provider fee program, which is paid to the Colorado Department of Health Care Policy and Financing. Initially, Republicans wanted the fee lowered from 5 percent to 2 percent, but realizing administrative costs were higher than initially expected, that number is now at 3 percent but not finalized.

The clock is ticking toward the May 10 adjournment of the General Assembly, just over seven working days away.

The bill was scheduled to be heard in Senate Appropriations Tuesday morning, but Sonnenberg said that would not happen because the agreement is not finalized. He’s now aiming for a hearing later in the week.

That committee can meet any day between now and Monday and still have time to get the bill through the full Senate and the House, but it will need wings.

Stay tuned.

Photo by Marianne Goodland for The Colorado Independent

has been a political journalist since 1998. She covered the state capitol for the Silver & Gold Record from 1998 to 2009 and for The Colorado Statesman in 2010-11 and 2013-14. Since 2010 she also has covered the General Assembly for newspapers in northeastern Colorado. She was recognized with awards from the Colorado Press Association for feature writing and informational graphics for her work with the Statesman in 2012.