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April 15, 2023

Bipartisan Bills to Reduce Rx Costs and Improve Funding for Nursing Facilities Pass House

DENVER, CO - The House today passed two bipartisan bills to save patients and business owners money on prescription drugs and increase annual funding for nursing facilities while prioritizing reimbursement for facilities that serve a higher rate of Medicaid patients.

“Spread pricing is taking money out of the pockets of hardworking Coloradans, small businesses and local pharmacies,” said Rep. Lindsey Daugherty, D-Arvada, sponsor of HB23-1201. “Our bill prohibits Pharmacy Benefit Managers from charging employers one price and reimbursing pharmacies less while profiting from the difference. Creating a health care system that is affordable for everyone is one of our top priorities this session, and this bill is one step of many that we’re taking to save people money on healthcare and prescription drugs.”

Currently PBMs can charge employers one price, but reimburse pharmacies less and keep the difference, a practice known as spread pricing. HB23-1201, also sponsored by Representative Matt Soper, R-Delta, makes it an unfair business practice for PBMs to charge employers more for a drug than what they pay pharmacies for the same drug and increase transparency for employers into PBM and carrier behavior that impacts their costs. The bill passed 55-8.

“Nursing facilities provide care and support to our grandparents, parents and family members, but without proper funding, many are at risk of closing,” said Speaker McCluskie, D-Dillon, sponsor of HB23-1228. “After losing so much of our workforce during the pandemic, we’re at a crossroads in Colorado - if nursing facilities don’t receive the funding they need, they won’t be able to continue to retain and attract the caregivers our communities so critically need. Our legislation allocates $62 million toward nursing facilities so they can stay open, hire staff and continue to provide essential care to our loved ones. We’re taking steps to identify long term funding solutions to nursing facilities, so facilities can focus on providing critical care rather than barely making ends meet.” 

“Nursing facilities provide around-the-clock care for our loved ones, but some have closed and others are struggling from low reimbursement rates,” said Rep. Jenny Willford, D-Northglenn, sponsor of HB23-1228. “This legislation includes stronger financial transparency to ensure nursing facilities and the Department of Health Care Policy and Financing are working in tandem to properly allocate funding. Directing this additional funding toward nursing facilities allows them to keep their doors open, accept new residents and provide them with the critical care, treatment and services they need.”

HB23-1228, which passed by a vote of 60-3, 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. This bill increases 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 compassionate release individuals will result in HCPF receiving more than $62 million this year to support Colorado’s nursing facilities. To ensure 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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