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February 27, 2024 HB 24-1086
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated January 18, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0802
Rep. Holtorf; Amabile
Sen. Michaelson Jenet
Date:
Bill Status:
Fiscal Analyst:
February 27, 2024
Senate 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. 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:
This revised fiscal note reflects the reengrossed 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) for physical health services:
requiring HCPF to continue contracting with Denver Health until June 30, 2032, as long as
Denver Health meets HCPF’s criteria;
prohibiting Denver Health from reimbursing contracted Medicaid providers more than the
Medicaid fee-for-service rates, not including any quality incentive payments; 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.
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. Page 2
February 27, 2024 HB 24-1086
State Expenditures
State expenditures will likely decrease as a result of the prohibition against Denver Health
paying physical health 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 for
physical health services 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 upon signature of the Governor, or upon becoming law without his
signature.
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.