On Tuesday, the Colorado House Public and Behavioral Health and Human Services Committee unanimously approved House Bill 1228, which would increase Medicaid reimbursement rates to nursing facilities statewide.
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Sponsor Rep. Jenny Willford (D-Northglenn) testified that the aim is to improve reimbursement for nursing facility services by incentivizing access to care for Coloradans with complex needs, attaching funding to quality outcomes, and holding nursing facility providers financially accountable by increasing financial transparency.
“COVID-19 and the subsequent impacts to the labor market have caused substantial financial strain on nursing facilities,” Willford said. “The inflexible nature of the current statutorily derived reimbursement model limits the ability of the state to proactively adjust. Colorado has provided a series of one-time emergency cash infusions to keep these providers stable and operating over the past several years.”
Current law places a 3% limit on the annual increase in the amount of general fund money that’s used for supplemental Medicaid payment rates. The bill, which now moves to the House Finance Committee, would remove that limit for rates to nursing facilities in order to address critical workforce needs.
Based on recommendations from the Department of Health Care Policy and Financing (HCPF), the bill would immediately increase Medicaid reimbursement rates by 10% next year, 3% in 2025, and 1.5% in 2026. HCPF estimates the bill would double the current 6.5% of its funding going to pay-for-performance models for quality nursing facilities.
The increased rate would allow nursing homes to pay their staff more than the $15 minimum wage.
Advocates for the bill say the funding will help address the pandemic-linked issues of rising costs, decreased occupancy rates, and workforce instability.
There have been 11 skilled nursing facilities that have closed in Colorado over the last few years, according to Heather TerHark-Monreal, vice president of ancillary services at Vivage Senior Living.
Vivage Senior Living and Beecan Health Colorado, the state’s largest Medicaid skilled nursing provider, reported 80% of its residents are Medicaid beneficiaries. She said many residents in their care have high-acuity behavioral and medically complex needs that run the risk of hospital admission.
“There are times when as a skilled nursing facility that accepts Medicaid, we cannot afford to care for these patients and move them out of the hospital,” TerHark-Monreal said. “And we need this rate increase to be able to alleviate some of the [overcrowding] in the hospital that you’ve seen over the last three years. If this rate increase is not passed, there may also be more skilled nursing facilities that close.”