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Thank you to the General Assembly, advocates, providers and other stakeholders for partnering to advance bills that support the Coloradans we cover and serve. Below are highlights of the legislative session related to the Department of Health Care Policy and Financing (HCPF). Please visit our Legislator Resource Center for our latest fact sheets on the 2025 legislative session.
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Sound stewardship of taxpayer dollars is a daily focus for HCPF. SB25-314 implements improvements to the Medicaid Recovery Audit Contractor (RAC) program such as: reducing RAC program administrative burden for providers, improving provider training to mitigate overbillings, improving program efficiencies, reducing delays in overpayment recoupments to the benefit of state General Fund, and increasing provider accountability. HB25-1033 reinforces that HCPF is the payer of last resort with commercial carriers and any inappropriate payments are refunded to HCPF.
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HCPF also streamlined waivers to create the Children with Complex Health Needs Waiver (HB25-1003); continuing the Complementary and Integrative Services Waiver through September 1, 2030 (SB25-226); developing a Workforce Capacity Development Center to train and certify more providers in evidence-based interventions so they can best serve kids with complex behavioral health needs through (SB25-292); and delaying the move of residential treatment from the child welfare block to behavioral health capitation via Regional Accountable Entities (SB25-294) for one year.
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SB 25-264, SB25-228, and SB25-270 repeal outdated cash funds and move certain cash funds to an enterprise to address state budget challenges. SB25-308 creates a cash fund for state dollars designated to 1115 waiver programs, such as health related social needs and re-entry services for those leaving prison or jail after incarceration.
HCPF Budget. Signed into law through the Long Bill, the HCPF fiscal year 2025-26 budget is $18.2 billion total fund and $5.5 billion General Fund, which represents about one-third of the state’s budget. 96% of HCPF’s budget pays our health care providers with 4% going to HCPF administration. More information about our budget can be found on our website.
Better Controlling Medicaid Claim Costs & Trends. While there were no large cuts made to Medicaid through the legislative or budget process this year, collaboration on better controlling Medicaid cost trends is a high priority as we begin the fiscal year 2026-27 budget process. HCPF’s Medicaid Sustainability Framework is designed to help us navigate Medicaid’s multi-year, fiscal challenge while fostering partnership and collaboration to achieve the shared goal of mitigating draconian cuts. The Accountable Care Collaborative (ACC) is the delivery system for Colorado’s Medicaid program and a major lever to better control Medicaid cost trends while improving quality outcomes and access. Phase III of the ACC makes comprehensive advances starting July 1, 2025, and is designed to increase accountability and transparency; advance technology across the board; enhance care and case management and health improvement programs; create Accountable Care Organization (ACO)-like primary care performance with a special focus on better supporting rural PCPs and Rural Health Clinics (RHCs) advance their infrastructure to drive quality of care, affordability and their sustainability. For more information on ACC Phase III, please visit our website.
In addition to the implementation of the ACC Phase III effective July 1, HCPF experts are diving deep into the identification of Medicaid trend drivers as well as the solutions to address them to better manage Medicaid costs. We are also seeking to increase federal funds through a State Directed Payments model prepared in collaboration with hospitals, the Colorado Hospital Association and the CHASE Board - due to CMS by July 1, 2025. As well, we are in the process of hiring third party consultants to help us compare Colorado to other Medicaid programs to identify opportunities as well as outlier trends and related drivers to further our quest to ensure sustainability for Medicaid going forward.
A Focus on Federal Actions. The U.S. House passed a federal budget reconciliation bill on May 22 and that bill is now in the Senate. In its current state, it will drive losses in Medicaid coverage due to the administrative hoops Coloradans would have to jump through to get and stay covered, especially from mandated twice a year renewals and work requirements. Read my full statement after passage of the bill in the House here. Specifically, some proposals being considered by Congress include the following, which may change as the bill moves through the process:
- Implementing work requirements for able bodied adults without dependents, creating mandates and actions for up to 377,000 Coloradans.
- Reducing federal matching funds for the Affordable Care Act expansion population (from 90% to 80% FMAP, representing an estimated reduction of $300 million in funding) if a state provides coverage or subsidizes care for undocumented individuals with state dollars (i.e., Cover All Coloradans, which has about 20,000 children and pregnant women enrolled, so far, and we are seeking further technical clarifications on impacts).
- Increasing frequency of redetermining eligibility for the expansion adults, from annually to semi-annually.
- Reducing federal matching funds during the 90-day “reasonable-opportunity” period until citizenship/immigration verified. (This period refers to a timeframe during which states must provide Medicaid or CHIP benefits to individuals who are otherwise eligible but whose citizenship or immigration status is pending verification. It allows applicants to provide the necessary documentation to verify their status or to work towards obtaining it.)
- Limiting provider fees and state-directed provider payments. (HCPF will submit the new CHASE funding request by July 1 on State Directed Payments, in collaboration with the CHASE Board and the CHASE workgroup.)
- Reducing funding for gender affirming care.
- Reducing funding for providers of family planning services, ie: Planned Parenthood.
Based on the House version of the bill, the Congressional Budget Office estimated that 10.9 million Americans could lose coverage from the bill, and a Kaiser Family Foundation poll found that more than half of the respondents are worried that Medicaid budget cuts would negatively affect their family’s ability to obtain and afford care.
The U.S. Senate has different rules and norms than the House, which include the deliberation of the Senate Parliamentarian. The Senate Parliamentarian holds the independent authority to make the determination as to if a provision in the reconciliation bill is permitted or not. Specifically, the Senate Parliamentarian ensures that the reconciliation bill’s primary focus is on fiscal matters and may eliminate any provision that is an unrelated policy change. For example, the Senate Parliamentarian has, in the past, removed provisions from reconciliation bills that do not, in their judgement, relate directly to the budget.
We will continue to monitor federal changes and update our Impact of Federal Funding Cuts to Medicaid webpage as details become known. There you will find the most recent information and a variety of tools, such as:
We will continue to voice that the more effective approach to our nation’s fiscal challenges is to drive down the U.S. cost of health care and health coverage, to the benefit of Medicaid, Medicare, the federal budget, state budgets, employers and all Americans. Certainly, this more sustainable approach is preferred over reducing federal Medicaid funding and creating administrative barriers to Medicaid coverage, which reduces enrollment, impacting Coloradans, care providers, the national economy and our state’s economy.
With all this in process, we are also finalizing our FY 2025-26 goals to formalize our priorities and the project work needed to achieve them.
Thank you for your partnership through the 2025 legislative session. We will navigate these challenges together in support of serving Coloradans who rely on our safety net coverage programs and the funding that supports them.
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