Fin/Budget: Colorado HCPF requests $14.8 billion budget, plans to increase provider reimbursements and eliminate Medicaid copays in FY 2023-2024

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[MM Curator Summary]: Workforce issues, provider rate increases and continuing the accountable care collaborate experiment top the list of things included in the $15B budget ask this year.

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Boram Kim | Jan 3, 2023 | Colorado

Led by Executive Director Kim Bimestefer, the Colorado Department of Health Care Policy and Financing (HCPF) presented its FY 2023-24 action plan while addressing questions and concerns about its budgetary requests during a Joint Budget Committee hearing on Dec. 21st. 



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The Department is requesting $14.9 billion in the upcoming fiscal year to address a declining healthcare workforce while increasing quality and affordability, which is more than $700,000 higher than the appropriation it received in FY 2022-23. 

HCPF said 96% of that request will continue to go to paying providers, $192.2 million of which will in turn go to the initiation of a 0.5% across-the-board provider rate increase and the elimination of Medicaid members’ copays in 2023. 

Other investment areas include rebalancing provider rates based on the annual rate review cycle, addressing critical needs for Nursing Home and Home and Community-Based providers, and targeted incentive payments for rural hospitals. 

An additional $8.67 million will go to support primary care medical providers’ transition to value-based payments with up-front reimbursement for care expenses. Under the Department’s value-based payment methodology, providers will have the option of receiving at least 25% of their revenue up front to allow for increased investment in care improvement.

“We can’t just keep paying as we have been, it has no future,” Bimestefer said during the hearing. “[Value-based payment] must succeed because just paying for volume is how we got to this terribly fractured system … When we increase the payments to primary care, that’s a good decision. And when we give [primary care providers] the tools to be able to better refer [to] specialty care or to refer to the right hospital systems that prescribe the right drugs, and we get to the right place with primary care, we fix a world of woes in the healthcare system.”

HCPF said this funding will help promote attribution—the process by which the department connects a Medicaid member to a provider—and strengthen the member-provider relationship through outcome-based payment flexibility. 

HCPF requested $1.1 billion for Behavioral Health Community Programs as Colorado continues to transform its behavioral health delivery system. The Behavioral Health Administration (BHA) will continue developing the state’s Hybrid Managed Care Model which aims to provide whole-person, physical and behavioral, healthcare for all Medicaid members, including prevention services, care coordination, primary, behavioral health, and specialty care. 

The Accountable Care Collaborative (ACC) has been administering that model through the state’s seven Regional Accountable Entities (RAEs) with a cost and outcome focus. RAEs will eventually administer capitation behavioral health benefits which include medical, substance-use disorder, and community-based services. 

ACC 3.0, the state’s upcoming updated value-based payment model, has already initiated community and stakeholder engagement on standardizing the processes and policies for all publicly funded behavioral health providers. HCPF plans to administer these contracts in late 2024. 

The Department is working with the BHA, providers, and community partners on establishing Certified Community Behavioral Health Clinics (CCBHC) and their roles in providing essential services.

Counties have consistently exceeded appropriated funding in conducting Medicaid eligibility determinations, forcing them to use local funds to cover the shortfall. The current budget appropriation will allow HCPF to fund counties directly through incentive payments geared around timely eligibility administration. HCPF said the direct payments should improve access and save the state money by reducing the number of inaccurate eligibility determinations. 

HCPF will focus on ensuring continuity of coverage for its Medicaid members in 2023 when the public health emergency is anticipated to end. Redeterminations for its 1.7 million Medicaid members, which Congress recently announced can begin starting April 1st, 2023, are expected to disenroll some 300,000 Coloradans from coverage.

Additionally, HCPF has requested $1 billion for the Office of Community Living, $496 million for the Indigent Care Program, and $700,000 to advance birthing equity. The legislature is expected to expand doula services in the state during the 2023 session.

“Colorado has a strong history of providing a broad array of home visitation services that complement one another,” said Adela Flores-Brennan, the state’s Medicaid Director, addressing the committee’s concerns about doula services overlapping with current midwifery services. “The Nurse Home Visitor Program, also known as the Nurse Family Partnership or NFP, provides valuable nurse services to first time parents. 

And the doula benefit complements the nurse home visitor program while improving health outcomes and equity for many of our members who may not be eligible for NFP with a support person present at their birth and may only want or be able to commit to a shorter intervention model … the NFP and doula benefit would serve slightly different populations with different models of care and different providers. Because of this, the addition of the doula benefit is not projected to undermine the sustainability or duplicate the efforts of other established home visiting models including NFP.”

Colorado Medicaid currently covers services provided by certified nurse midwives, but the push to expand both coverage and availability for doula services will be decided by lawmakers. The Medicaid benefit would be focused on improving health outcomes and reducing costs for pregnant women of color.