Hospitals across Colorado could see their revenues slashed by $264 million unless the Legislature can reach a compromise over the hospital provider fee, an arcane mechanism through which providers receive matching federal funds for treating uninsured patients and Medicaid recipients.
A bill to avert the cut passed a key committee in the Republican-controlled Senate earlier this week, but like most budget matters, it could face a rocky path to the governor's desk.
The fee is assessed to hospitals but then refunded with a federal match, effectively doubling their money. But the formula used to pay back that money is weighted toward rural hospitals, meaning the cut would disproportionately affect providers like St. Anthony Summit Medical Center in Frisco.
The county's only hospital would stand to lose $690,312 next year if the cut isn't averted, which could lead to reductions in service across the board.
“From a budget standpoint, absolutely, we’re thinking about this, and we have to be prepared for what the future looks like. We don’t know yet, so we’re not saying the sky is falling. But we certainly want to be as prepared as we can be.”Sharon BurnetteSt. Anthony Summit Medical Center spokeswoman
"There are some critical issues that we feel could be in jeopardy based on the size of this cut," said hospital spokeswoman Sharon Burnette.
St. Anthony's emergency room sees a particularly high number of trauma patients, given its proximity to several of the state's most popular ski areas and networks of hiking and biking trails.
The cut, however, could force the hospital to dial down some of its trauma care as it shifts resources to make up for the revenue pinch.
"We might have to only provide evaluation and stabilization care and then transport patients to someone else," Burnette said. "That's not something we want to do. We want to keep them in the community and we want to be able to have the right mix of physicians and nurses who are trauma experienced."
The provider fee was established at the peak of the recession, when providers were treating higher numbers of indigent patients who couldn't pay. Hospitals asked lawmakers for a solution, and they came up with the fee as way to infuse hospitals with federal money.
The state can't actually spend the money generated by the fee, but because of an accounting quirk it still contributes to revenues that trigger a taxpayer refund under the Taxpayer Bill of Rights.
Colorado's economy has made a robust recovery since the fee was first established, however, and budget-makers this year had to cut the fee to the tune of $264 million to prevent a refund.
The Senate proposal currently being considered, SB 267, would reclassify the fee as an enterprise fund, exempting it from TABOR calculations. At the same time, however, it would lower the amount of state tax revenue subject to spending limits by $670 million, a potential stumbling block for the Democratic House that would ultimately need to approve the bill.
"What's worked for us in the past is compromise, and that's certainly a strategy that works for me personally," said Representative Millie Hamner, whose district includes Summit County. "The problem is that reducing the (TABOR) cap defeats the purpose of reclassifying this revenue."
The measure has strong support from hospitals, particularly those in rural areas who have testified that they might have to close if the cuts aren't prevented.
Other High Country hospitals would see an even bigger hit than St. Anthony: the Vail Valley Medical Center would stand to lose $1,133,297, and Valley View Hospital in Glenwood Springs would see a $3,786,269 cut, according to data from the Colorado Joint Budget Committee.
Schools have also voiced support for SB 267, which would shift $400 million in education funds to rural counties, including Summit. It would also bond $1.35 billion for transportation and infrastructure, with 25 percent earmarked for rural areas.
The Senate Appropriations Committee is currently considering the bill, which would need to be passed by the full Senate and approved by the House, where changes will likely be made.
Meanwhile, hospitals are pressing lawmakers to iron out a solution before the legislative session ends on May 10 — but also preparing for a potential hit.
"From a budget standpoint, absolutely, we're thinking about this, and we have to be prepared for what the future looks like," Burnette said. "We don't know yet, so we're not saying the sky is falling. But we certainly want to be as prepared as we can be."