HOUSE BILL 23-1228
BY REPRESENTATIVE(S) McCluskie and Willford, Amabile, Bird,
Boesenecker, Brown, Daugherty, Dickson, Duran, Frizell, Froelich,
Hamrick, Herod, Jodeh, Joseph, Lieder, Lindstedt, Marshall, Martinez,
McCormick, Michaelson Jenet, Sharbini, Sirota, Snyder, Titone, Valdez,
Velasco, Woodrow, Young;
also SENATOR(S) Zenzinger and Smallwood, Bridges, Buckner, Cutter,
Exum, Ginal, Hansen, Marchman, Mullica, Pelton B., Pelton R., Will.
C
ONCERNING NURSING FACILITY REIMBURSEMENT RATE SETTING , AND, IN
CONNECTION THEREWITH
, MAKING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, 25.5-6-202, amend (5),
(6), (9)(b)(I), and (9)(c)(I); repeal (9)(c)(II); and add (9)(b)(I.5), (13), (14),
(15), and (16) as follows:
25.5-6-202. Providers - nursing facility provider reimbursement
- exemption - rules - repeal. (5) Subject to available moneys
APPROPRIATIONS and the priority of the uses of the provider fees as
established in section 25.5-6-203 (2)(b), in addition to the reimbursement
rate components paid pursuant to subsections (1) to (4) of this section, the
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. state department shall make a supplemental medicaid payment based upon
performance to those nursing facility providers that provide services that
result in better care and higher quality of life for their residents. This
amount shall be determined by The state department SHALL DETERMINE THE
PAYMENT AMOUNT
based upon performance measures established in rules
adopted by the state board in the domains of quality of life, quality of care,
and facility management. The payment shall be computed annually as of
July 1, 2009, and each July 1 thereafter, and shall not be less than
twenty-five hundredths of one percent of the statewide average per diem
rate for the combined rate components determined pursuant to subsections
(1) to (4) of this section. BEGINNING JULY 1, 2024, THE PAYMENT MUST NOT
BE LESS THAN TWELVE PERCENT OF TOTAL PROVIDER FEE PAYMENTS AND
MUST BE ADJUSTED FOR FISCAL YEARS
2024-25 AND 2025-26. NO LATER
THAN
JULY 1, 2026, THE PAYMENT MUST NOT BE LESS THAN FIFTEEN
PERCENT OF TOTAL PROVIDER FEE PAYMENTS AND MUST BE ANNUALLY
ADJUSTED THEREAFTER
. During each state fiscal year, the state department
may discontinue the supplemental medicaid payment established pursuant
to this subsection (5) to any nursing facility provider that fails to comply
with the established performance measures during the state fiscal year, and
the state department may initiate the supplemental medicaid payment
established pursuant to this subsection (5) to any provider who
THAT comes
into compliance with the established performance measures during the state
fiscal year.
(6) Subject to available money
APPROPRIATIONS and the priority of
the uses of the provider fees as established in section 25.5-6-203 (2)(b), in
addition to the reimbursement rate components
PAID pursuant to subsections
(1) to (5) of this section, the state department shall make a supplemental
medicaid payment to nursing facility providers that have
SERVE residents:
who have moderately to very severe mental health conditions, dementia
diseases and related disabilities, or acquired brain injury as follows:
(a) A supplemental medicaid payment shall be made to nursing
facility providers that serve residents Who have severe mental health
conditions that are classified at a level II by the medicaid program's
preadmission screening and resident review assessment tool. The state
department shall compute this payment annually as of July 1, 2009, and
each July 1 thereafter, and it shall be
MUST not BE less than two percent of
the statewide average per diem rate for the combined rate components
determined pursuant to subsections (1) to (4) of this section. B
EGINNING
PAGE 2-HOUSE BILL 23-1228 JULY 1, 2023, THE STATE DEPARTMENT SHALL ANNUALLY ADJUST THE RATE
TO ENSURE ACCESS TO CARE FOR RESIDENTS WHO HAVE SEVERE MENTAL
HEALTH CONDITIONS
.
(b) A supplemental medicaid payment shall be made to nursing
facility providers that serve residents With severe dementia diseases and
related disabilities or acquired brain injury. The state department shall
calculate the payment based upon the resident's cognitive assessment
established in rules adopted by the state board. The state department shall
compute this payment annually as of July 1, 2009, and each July 1
thereafter, and it shall be
MUST not BE less than one percent of the statewide
average per diem rate for the combined rate components determined under
PURSUANT TO subsections (1) to (4) of this section. BEGINNING JULY 1,
2023,
THE STATE DEPARTMENT SHALL ANNUALLY ADJUST THE RATE TO
ENSURE ACCESS TO CARE FOR RESIDENTS WITH SEVERE DEMENTIA DISEASES
AND RELATED DISABILITIES OR ACQUIRED BRAIN INJURY
.
(9) (b) (I) Except for changes in the number of patient days,
THE
STATE DEPARTMENT SHALL ESTABLISH
the general fund share of the
aggregate statewide average of the per diem rate net of patient payment
pursuant to subsections (1) to (4) of this section. shall be limited to an
annual increase of three percent The state's share of the reimbursement rate
components pursuant to subsections (1) to (4) of this section may be funded
through the provider fee assessed pursuant to the provisions of
section
25.5-6-203 and any associated federal funds. Any provider fee used as the
state's share and all federal funds shall
MUST be excluded from the
calculation of the general fund limitation on the annual increase SHARE. For
the fiscal year commencing July 1, 2009, and for each fiscal year thereafter,
THE STATE DEPARTMENT SHALL CALCULATE the general fund share of the
aggregate statewide average per diem rate net of patient payment pursuant
to subsections (1) to (4) of this section shall be calculated
using the rates
that were effective on July 1 of that fiscal year;
EXCEPT THAT:
(A) F
OR FISCAL YEAR 2023-24, THE STATE DEPARTMENT SHALL
INCREASE THE AGGREGATE STATEWIDE AVERAGE OF THE PER DIEM RATE BY
AT LEAST TEN PERCENT
;
(B) F
OR FISCAL YEAR 2024-25, THE STATE DEPARTMENT SHALL
INCREASE THE AGGREGATE STATEWIDE AVERAGE OF THE PER DIEM RATE BY
AT LEAST THREE PERCENT
;
PAGE 3-HOUSE BILL 23-1228 (C) FOR FISCAL YEAR 2025-26, THE STATE DEPARTMENT SHALL
INCREASE THE AGGREGATE STATEWIDE AVERAGE OF THE PER DIEM RATE BY
AT LEAST ONE AND ONE
-HALF PERCENT; AND
(D) BEGINNING IN FISCAL YEAR 2026-27, AND FOR EACH FISCAL
YEAR THEREAFTER
, THE STATE DEPARTMENT SHALL ESTABLISH THE
AGGREGATE STATEWIDE AVERAGE OF THE PER DIEM RATE
.
(I.5) W
HEN INCREASING THE AGGREGATE STATEWIDE AVERAGE OF
THE PER DIEM RATE FOR FISCAL YEARS
2023 THROUGH 2027, THE
REIMBURSEMENT RATE FOR A CLASS
I NURSING FACILITY THAT OPERATES
EFFICIENTLY AND ECONOMICALLY MUST BE REASONABLE AND ADEQUATE TO
MEET THE NURSING HOME
'S COSTS IN ORDER TO PROVIDE CARE AND SERVICES
IN CONFORMITY WITH APPLICABLE STATE AND FEDERAL LAWS
,
REGULATIONS, AND QUALITY AND SAFETY STANDARDS , AND MUST BE BASED
ON THE MOST RECENT AUDITED AND FINALIZED COST AND UTILIZATION DATA
AVAILABLE
.
(c) (I) The general assembly finds that the historical growth in
nursing facility provider rates has significantly exceeded the rate of
inflation. These increases have been caused in part by the inclusion of
medicare costs in medicaid cost reports. The state of Colorado has an
interest in limiting these exceptional increases in medicaid nursing facility
provider rates by removing medicare part B direct
costs from the medicaid
nursing facility provider rates and by imposing a ceiling on the medicare
part A ancillary costs that are included in calculating medicaid nursing
facility rates. N
O LATER THAN JULY 1, 2023, THE STATE DEPARTMENT SHALL
INITIATE A PROCESS TO REMOVE MEDICARE COSTS FROM THE PROVIDER RATE
SETTING BY
JULY 1, 2026. THE STATE BOARD SHALL PROMULGATE RULES
ESTABLISHING THE SPECIFIC METHODOLOGY USED FOR REMOVING MEDICARE
COSTS
.
(II) For all rates effective on or after July 1, 1997, for each class I
nursing facility provider, only such costs as are reasonable, necessary, and
patient-related may be reported for reimbursement purposes. Nursing
facility providers may include the level of medicare part A ancillary costs
that was included and allowed in the facility's last medicaid cost report filed
prior to July 1, 1997. Any subsequent increase in this amount shall be
limited to either the increase in the facility's allowable medicare part A
ancillary costs or the percentage increase in the cost of medical care
PAGE 4-HOUSE BILL 23-1228 reported in the United States department of labor bureau of labor statistics
consumer price index for the same time period, whichever is lower. Part B
direct costs for medicare shall be excluded from the allowable
reimbursement for facilities.
(13) (a) AS A CONDITION OF RECEIVING MEDICAID FUNDS, THE STATE
DEPARTMENT MAY REQUIRE A NURSING FACILITY TO SUBMIT ANY
DOCUMENTATION NECESSARY TO ENSURE THE STATE
'S INTEREST IN
TRANSPARENCY
, STABILITY, AND SOUND FISCAL STEWARDSHIP, INCLUDING,
BUT NOT LIMITED TO:
(I) A
NNUAL AUDITED FINANCIAL STATEMENTS , PREPARED BY AN
INDEPENDENT ACCOUNTANT
, FOR A FACILITY, MANAGEMENT COMPANY , AND
ANY RELATED PARTY CONDUCTING BUSINESS WITH A MEDICAID
-CERTIFIED
NURSING FACILITY
, INCLUDING AUDITED AND CONSOLIDATED FINANCIAL
STATEMENTS FOR ANY PARENT COMPANY THAT ACCEPTS
, OR WHOSE
SUBSIDIARIES ACCEPT
, MEDICAID PAYMENTS FROM THE STATE OF
COLORADO;
(II) D
ETAILS ON TRANSACTIONS BETWEEN RELATED PARTIES OR
ENTITIES THAT HAVE COMMON OWNERSHIP
; AND
(III) OWNERSHIP INTEREST IN REAL ESTATE , MANAGEMENT
COMPANIES
, FACILITY OPERATORS, AND ALL RELATED PARTIES.
(b) T
HE STATE DEPARTMENT SHALL DETERMINE THE FORMAT FOR
THE DOCUMENTATION PROVIDED BY EACH NURSING FACILITY
.
(c) T
HE STATE BOARD SHALL ESTABLISH BY RULE ANY PENALTIES
FOR NONCOMPLIANCE WITH THE FINANCIAL REPORTING REQUIRED PURSUANT
TO THIS SUBSECTION
(13).
(d) T
HE COSTS ASSOCIATED WITH THE FINANCIAL REPORTING
REQUIRED PURSUANT TO THIS SUBSECTION
(13), INCLUDING ANY AUDIT
COSTS INCURRED BY A NURSING FACILITY
, ARE AN ALLOWABLE EXPENSE ON
THE MEDICAID COST REPORT AND MUST BE INCORPORATED AS A COMPONENT
OF THE OVERALL REIMBURSEMENT METHODOLOGY
.
(14) T
HE GENERAL ASSEMBLY FINDS THAT THE INFLEXIBLE NATURE
OF STATUTORILY FIXED REIMBURSEMENT RATES IS NOT IN THE BEST
PAGE 5-HOUSE BILL 23-1228 INTEREST OF THE STATE OF COLORADO. THEREFORE, THE STATE
DEPARTMENT SHALL DEVELOP AND IMPLEMENT A TRANSITION PLAN TO
REGULATE NURSING FACILITY REIMBURSEMENT AIMED AT IMPROVING THE
HEALTH AND SAFETY OF RESIDENTS
, PROMOTING INNOVATION AND
IMPROVED INFECTION CONTROL EFFORTS
, IMPROVING ACCESS TO CARE, AND
PROMOTING INNOVATION IN
COLORADO NURSING FACILITIES. AS PART OF
THIS PROCESS
, THE STATE DEPARTMENT SHALL :
(a) N
O LATER THAN JULY 1, 2026, DEFINE "NURSING HOME
REIMBURSEMENT
" THROUGH RULES PROMULGATED BY THE STATE BOARD
AND PROVIDE PAYMENTS TO NURSING FACILITIES CONSISTENT WITH THE
PROMULGATED RULES
;
(b) E
NGAGE WITH STAKEHOLDERS REGULARLY TO SEEK INPUT ON
ANY PROPOSED METHODOLOGY CHANGES AND ENSURE THE METHODOLOGY
IS REASONABLE AND ADEQUATE TO MEET THE COSTS OF AN EFFICIENTLY AND
ECONOMICALLY OPERATED NURSING FACILITY THAT PROVIDES CARE AND
SERVICES IN CONFORMITY WITH APPLICABLE STATE AND FEDERAL LAWS
,
REGULATIONS, AND QUALITY AND SAFETY STANDARDS BASED ON THE MOST
RECENT AUDIT AND FINALIZED COST AND UTILIZATION DATA AVAILABLE
;
AND
(c) FROM NOVEMBER 1, 2023, TO NOVEMBER 1, 2026, SUBMIT AN
ANNUAL REPORT TO THE JOINT B UDGET COMMITTEE OF THE GENERAL
ASSEMBLY REGARDING THE IMPLEMENTATION PROGRESS DESCRIBED IN THIS
SUBSECTION
(14), INCLUDING, AT A MINIMUM:
(I) R
ECORDS OF STAKEHOLDER ENGAGEMENT ;
(II) C
ONCLUSIONS DRAWN FROM FINANCIAL OVERSIGHT ACTIVITIES ;
(III) I
SSUES REGARDING PAYMENT EQUITY AND ACCESS TO CARE
COORDINATION
; AND
(IV) EXPECTED BUDGETARY IMPACTS OF ANY METHODOLOGY
CHANGE
.
(15) (a) E
ACH NURSING FACILITY THAT RECEIVES MEDICAID FUNDS
SHALL DEVELOP AND SUBMIT A PLAN TO THE STATE DEPARTMENT THAT
MEETS STATE DEPARTMENT STANDAR DS AND DEMONSTRATES HOW THE
PAGE 6-HOUSE BILL 23-1228 NURSING FACILITY WILL:
(I) I
MPROVE THE HEALTH AND SAFETY OF THE NURSING FACILITY 'S
RESIDENTS
, INCLUDING INFECTION CONTROL AND STAFFING ;
(II) I
NCREASE ACCESS TO CARE;
(III) I
MPROVE FINANCIAL SUSTAINABILITY , INCLUDING
OPPORTUNITIES FOR DIVERSIFICATION OF BUSINESS LINES AND
STABILIZATION OF REVENUE STREAMS
; AND
(IV) PROMOTE INNOVATION TO MEET THE EMERGING NEEDS OF
INDIVIDUALS WITH DISABILITIES AND AGING AND OLDER ADULTS
.
(b) T
HE STATE BOARD SHALL PROMULGATE RULES IMPLEMENTING
THIS SUBSECTION
(15).
(16) S
UBSECTIONS 1 TO 9 OF THIS SECTION AND THIS SUBSECTION
(16) ARE REPEALED, EFFECTIVE JULY 1, 2026.
SECTION 2. In Colorado Revised Statutes, 25.5-6-203, amend
(1)(c) as follows:
25.5-6-203. Nursing facilities - provider fees - federal waiver -
fund created - rules - repeal. (1) (c) (I) In accordance with the
redistributive method set forth in 42 CFR 433.68 (e)(1) and (e)(2), the state
department shall seek a waiver from the broad-based provider fees
requirement or the uniform provider fees requirement, or both, to exclude
nursing facility providers from the provider fee. The state department shall
exempt the following nursing facility providers to obtain federal approval
and minimize the financial impact on nursing facility providers:
(I)
(A) A facility operated as a continuing care retirement
community that provides a continuum of services by one operational entity
providing independent living services, assisted living services, and skilled
nursing care on a single, contiguous campus. Assisted living services
include an assisted living residence as defined in section 25-27-102 C.R.S.,
or that provides assisted living services on-site, twenty-four hours per day, seven days per week.
PAGE 7-HOUSE BILL 23-1228 (II) (B) A skilled nursing facility owned and operated by the state;
(III) (C) A nursing facility that is a distinct part of a facility that is
licensed as a general acute care hospital; and
(IV) (D) A facility that has forty-five or fewer licensed beds.
(II) N
O LATER THAN JULY 1, 2026, THE STATE DEPARTMENT SHALL
PROMULGATE RULES MAINTAINING THE EXEMPTIONS IDENTIFIED IN THIS
SUBSECTION
(1)(c) IN ORDER TO MINIMIZE THE FINANCIAL IMPACT ON
NURSING FACILITY PROVIDERS
.
(III) T
HIS SUBSECTION (1)(c) IS REPEALED, EFFECTIVE JULY 1, 2028.
SECTION 3. In Colorado Revised Statutes, 25.5-6-208, add (7) as
follows:
25.5-6-208. Nursing facility provider reimbursement - rules -
definition - repeal. (7) T
HIS SECTION IS REPEALED, EFFECTIVE JULY 1,
2026.
SECTION 4. In Colorado Revised Statutes, 25.5-6-210, amend
(10); repeal (1)(a), (1)(b), (6), (7), (8), and (9); and add (1)(c) and (1)(d)
as follows:
25.5-6-210. Additional supplemental payments - nursing
facilities - funding methodology - reporting requirement - rules -
repeal. (1) Notwithstanding any other provision of law to the contrary and
subject to available appropriations, for the purposes of reimbursing a
medicaid-certified class I nursing facility provider, the state department
shall issue additional supplemental payments to nursing facility providers
that meet the requirements outlined in this section and the state department's
subsequent regulation as follows:
(a) For the 2021-22 state fiscal year, funds appropriated by thegeneral assembly are for the purposes of supporting nursing facility
providers experiencing increased staffing costs resulting from the
COVID-19 pandemic, nursing facility providers with high medicaid
utilization rates, or nursing facility providers currently serving individuals
with complex needs.
PAGE 8-HOUSE BILL 23-1228 (b) Payments made in addition to those specified in subsection (1)(a)
of this section may also be made to nursing facility providers that accept
new admissions of medicaid-enrollment individuals with complex needs.
(c) A PAYMENT TO A NURSING FACILITY WITH DISPROPORTIONATELY
HIGH MEDICAID UTILIZATION OR GEOGRAPHICALLY CRITICAL TO ENSURING
ACCESS TO CARE
. IN DETERMINING QUALIFYING FACILITIES FOR THIS
PAYMENT
, THE STATE DEPARTMENT SHALL CONSIDER ANY ACCESS TO CARE
IMPACTS TO INDIVIDUALS NOT COVERED BY MEDICAID
, INCLUDING, BUT NOT
LIMITED TO
, VETERANS ADMINISTRATION BENEFICIARIES , INDIVIDUALS
WITHOUT HEALTH
-CARE COVERAGE, AND INDIVIDUALS PENDING MEDICAID
COVERAGE
.
(d) A
PAYMENT TO A NURSING FACILITY ADMITTING COMPASSIONATE
RELEASE INDIVIDUALS FROM THE DEPARTMENT OF CORRECTIONS WHO NEED
ADDITIONAL SERVICES TO ENSURE ACCESS TO CARE
.
(6) To receive an additional payment pursuant to subsection (1)(b)
of this section, a nursing facility provider shall work with a hospital to
facilitate the timely discharge of medicaid members from the hospital into
the nursing facility, serve medicaid members with complex needs, or accept
compassionate release individuals from the department of corrections.
(7) On or before November 1, 2022, the state department shall
engage with stakeholders and submit a report and recommendations to the
joint budget committee, the health and human services committee of the
senate, and the public and behavioral health and human services committee
of the house of representatives, or any successor committees, concerning
suggested changes for permanently changing medicaid nursing facility
provider reimbursement policy in Colorado to prioritize quality,
sustainability, and sound fiscal stewardship to avoid further one-time cash
infusions. The report must include changes that can be made to affirm a
nursing facility provider's commitment to accountability and must include,
at a minimum:
(a) Infection control and culture change practices, including:
(I) Single occupancy rooms;
(II) Smaller facility models; and
PAGE 9-HOUSE BILL 23-1228 (III) Innovative facility models;
(b) Behavioral health needs;
(c) Practices regarding individuals who have complex needs
requiring hospital discharge;
(d) Practices regarding care and services to compassionate release
individuals from the department of corrections;
(e) Options for diversified funding streams to ensure continuity of
services;
(f) Competitive staffing practices;
(g) The timeline and costs associated with implementing the
recommended changes, including the impact on nursing facility provider
rates; and
(h) Identification of the amount of supplemental payments to each
nursing facility provider and the outcome evaluation required pursuant to
subsection (3) of this section.
(8) The state department shall meet with the following stakeholders,
at a minimum, to seek input on any proposed reimbursement methodology
changes and report as required by this section:
(a) A representative from an urban nursing facility provider;
(b) A representative from a rural nursing facility provider;
(c) A representative from a nursing facility trade organization;
(d) A representative from a nursing facility with a high medicaid
utilization rate; and
(e) A representative from a nursing facility that serves individuals
with complex needs.
(9) The state board shall promulgate any rules necessary to
PAGE 10-HOUSE BILL 23-1228 implement this section.
(10) This section is repealed, effective July 1, 2023 2026.
SECTION 5. In Colorado Revised Statutes, 25-48-102, amend (4)
as follows:
25-48-102. Definitions. As used in this article 48, unless the context
otherwise requires:
(4) "Health-care provider" or "provider" means a person who is
licensed, certified, registered, or otherwise authorized or permitted by law
to administer health care or dispense medication in the ordinary course of
business or practice of a profession. The term includes a health-care facility,
including a long-term care facility as defined in section 25-3-103.7 (1)(f.3)
and a continuing care retirement community as described in section
25.5-6-203 (1)(c)(I), C.R.S.
(1)(c)(I)(A).
SECTION 6. Appropriation. (1) For the 2023-24 state fiscal year,
$30,509,457 is appropriated to the department of health care policy and
financing. This appropriation is from the general fund, which is subject to
the "(M)" notation as defined in the annual general appropriation act for the
same fiscal year. To implement this act, the department may use this
appropriation for medical and long-term care services for Medicaid eligible
individuals.
(2) For the 2023-24 state fiscal year, the general assembly
anticipates that the department of health care policy and financing will
receive $31,754,740 in federal funds for medical and long-term care
services for Medicaid eligible individuals to implement this act. The
appropriation in subsection (1) of this section is based on the assumption
that the department will receive this amount of federal funds.
SECTION 7. Safety clause. The general assembly hereby finds,
PAGE 11-HOUSE BILL 23-1228 determines, and declares that this act is necessary for the immediate
preservation of the public peace, health, or safety.
____________________________ ____________________________
Julie McCluskie Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 12-HOUSE BILL 23-1228