Report Reveals Sweeping Consequences For Colorado Patients 

DENVER – A study released today by FTI Consulting, Inc. and Colorado’s Health Care Future finds the proposed state government option would have sweeping negative consequences for Coloradans and their health care, including hospital closures, cuts in services and layoffs of hospital staff, reducing patients’ access to care across the state.

The study finds:

• Up to 23 rural hospitals in Colorado could be at increased risk of closure under the Colorado state government option, limiting access to care for thousands of patients in rural areas.
• 83 percent of Colorado’s hospitals would see a reduction in reimbursement under the proposed state government option, threatening access to care especially in hospitals across the state that are already struggling.
• The Colorado state government option would decrease the uninsured rate by only 0.1 percent. Meanwhile, enrolling Coloradans currently eligible for Medicaid under the current system could reduce the number of uninsured by 25 percent.
• The stated goals of the state government option will be undermined by the negative consequences to care. Attempts to expand coverage without ensuring access to doctors and hospitals could ultimately harm the very population the Colorado state government option aims to assist.
• Government rate setting under a state government option would result in hospital reimbursements decreasing by $100 million annually, exceeding $1 billion over a decade – leading to cuts to services, staff layoffs, and facility closures.

The study’s findings echo concerns expressed by elected officials on both sides of the aisle during a recent pre-session briefing of the Joint Budget Committee on the Department of Regulatory Agencies’ Division of Insurance and the Department of Health Care Policy and Financing proposal to create a new state government-controlled health insurance system based on forcing insurance companies to participate and making drastic cuts to hospital reimbursements via government-set rates.

To assess the impact of a proposed state government option on access to care in communities throughout the state, FTI Consulting, Inc. conducted a statewide analysis of reimbursements to Colorado hospitals and estimated the effects of rate setting on access to providers, which could be impacted by the reduction or elimination of hospital services in response to the public option.

• To read the full report, titled “Colorado State Government Option: Assessing The Impact Of Proposed Reforms On Access To Health Care,” CLICK HERE.

For additional source comments and interviews, please contact [email protected]

State Option Background: In 2019, the Colorado General Assembly enacted HB19-1004, which directed the Colorado Department of Health Care Policy and Financing (HCPF) and the Division of Insurance (DOI) to develop and submit a proposal for a state public option for health care coverage.  The resulting proposal, known as the Colorado “state option” outlines a rate setting system to determine hospital reimbursement under the public option plan.  Although details remain sparse, the payment rates are likely to fall into a range of between 160 percent and 210 percent of Medicare, significantly below commercial rates.  While the initial proposal does not mandate provider participation, Colorado officials have suggested that they have the authority to compel hospitals to participate and accept payment rates set by regulators.

HB19-1004 gave HCPF and DOI the broad ability to implement a proposal for a public option; however, legislators will likely make adjustments to existing statutory authority in the upcoming legislative session.  If the State Option is passed when the state legislature reconvenes, the plan would take effect in January 2022.

About FTI Consulting: FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional.  With more than 4,700 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities.  For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.

About Colorado’s Health Care Future: Colorado’s Health Care Future is a project of Partnership for America’s Health Care Future Action.

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