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March 21, 2023

Bill to Support Nursing Facilities, Update Reimbursement Rates Passes Committee

HB23-1228 allocates more than $62 million toward nursing facilities and updates Medicaid reimbursement rates

DENVER, CO – The House Public & Behavioral Health & Human Services Committee today passed legislation to increase annual funding for nursing facilities and prioritize reimbursement for facilities that serve a higher rate of Medicaid patients. 

“We need to ensure Colorado’s nursing facilities are properly funded so they can provide world-class care to our grandparents, parents, and neighbors,” said Speaker McCluskie, D-Dillon. “Colorado has hit a breaking point–if nursing facilities don’t have the funding they need, they’ll be forced to close their doors and residents who need their care will be forced to find it elsewhere. This legislation boosts funding for nursing facilities so they have the resources they need to stay open and provide essential care to Coloradans. We’re working to help identify an innovative long term solution to nursing facility funding, so facilities are no longer reliant on additional federal and state funds to keep providing critical care to patients.”

“Nursing facilities in Colorado play a vital role in caring for our loved ones, but they’re in desperate need of funding to continue meeting the needs of their residents,” said Rep. Jenny Willford, D-Northglenn. “Our bill outlines stronger financial transparency to ensure nursing facilities and the Department of Health Care Policy and Financing are working in tandem to properly allocate funding. Streamlining this funding to nursing facilities ensures they’re able to keep the doors open, accept new residents and provide them all with critical care, treatment and services.”

HB23-1228, sponsored by Speaker Julie McCluskie and Representative Jenny Willford, passed committee unanimously. This bill would make several changes to the Medicaid nursing facility reimbursement rates to ensure Colorado’s nursing facilities are getting the proper funding to care for high-need residents, accept new residents and maintain their operation. 

Specifically, this bill repeals the standard core per diem rate of 3-percent annually and increases it to 10-percent next fiscal year, 3-percent in fiscal year 2024-25, 1.5-percent in 2025-2026 and then a rate to be determined by the Department of Health Care Policy and Financing (HCPF) in the following years. Targeted funding will supplement the needs of facilities that serve residents with severe mental health conditions, severe dementia and brain injuries. Increasing the core per diem rate combined with a new supplemental payment for facilities with disproportionately high Medicaid utilization, facilities that are geographically critical to ensuring access to care, and facilities that admit compassion release individuals will result in HCPF receiving more than $62 million this year to support Colorado’s nursing facilities. To ensure and increase financial transparency, nursing facilities will be required to submit audited financial statements to HCPF.

Currently, Colorado’s nursing home facilities can report costs that have already been

reimbursed by Medicare for Medicaid reimbursement, but due to complications from funding sources, nursing facilities are not currently being reimbursed for their full costs. HB23-1228 changes this Medicaid reimbursement structure by directing HCPF to undertake a three-year stakeholding process to create a more sustainable, flexible, and innovative reimbursement structure so nursing facilities are getting the full reimbursement they deserve.

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