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January 18, 2024 HB 24-1086
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0802
Rep. Holtorf; Amabile
Date:
Bill Status:
Fiscal Analyst:
January 18, 2024
House Health & Human Services
Kristine McLaughlin | 303-866-4776
kristine.mclaughlin@coleg.gov
Bill Topic: OPERATION OF DENVER HEALTH & HOSPITAL AUTHORITY
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☒ Statutory Public Entity
The bill places requirements on the Department of Health Care Policy and Financing’s
contract with Denver Health and Hospital Authority. The bill decreases state
expenditures, and may decrease revenue and expenditures for Denver Health, on an
ongoing basis.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Summary of Legislation
The bill places requirements on the Department of Health Care Policy and Financing’s (HCPF)
contract with Denver Health and Hospital Authority (Denver Health) including:
requiring HCPF to continue contracting with Denver Health until it ceases to operate a managed care
program;
prohibiting Denver Health from reimbursing contracted Medicaid providers more than the Medicaid
fee-for-service rates, not including any quality incentive payments;
requiring Denver Health to provide physical and behavioral health care services to the state’s
Medicaid population; and
authorizing HCPF to continually distribute funds appropriated for payment to Denver Health.
Background
HCPF directly contracts with Denver Health Medical Plan (Denver Health), which is a health
insurance company operating as a Medicaid managed care organization (MCO) providing
healthcare to Medicaid members who live in Denver, Jefferson, Arapahoe, and Adams counties.
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January 18, 2024 HB 24-1086
As an MCO, Denver Health receives set monthly payments from HCPF, also known as a
capitation rate, for each person enrolled in the plan to receive physical and behavioral health
services through the providers that Denver Health contracts with. The monthly capitation rate is
based on actuarial analysis and negotiations with Denver Health.
State Expenditures
State expenditures will likely decrease as a result of the prohibition against Denver Health
paying providers more than the Medicaid fee-for-service rates, excepting incentive payments.
Denver Health will be required to renegotiate with its relevant providers and HCPF will adjust its
monthly payments to Denver Health accordingly. The extent of any potential decrease will
depend on the results of the negotiations, as well as any resulting increase in the use of
incentive payments. It is assumed that any impacts will be addressed through the annual
budget process once contract negotiations are finalized and the impact on rates/payments is
known.
Statutory Public Entity
Denver Health and Hospital Authority is a statutorily created safety net provider. Similar to the
state, restricting Denver Health to charging no more than the Medicaid fee-for-service rates will
likely decrease costs incurred and paid through its managed care organization. To the extent
that this reduces the capitated rate paid by HCPF, revenue to Denver Health will also decrease.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State and Local Government Contacts
Health Care Policy and Financing
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.