DENVER – Hospitals in rural Colorado and they people they serve can breathe a little easier as a measure to undo a $264 million cut to the healthcare system passed its first hurdle.
Senate Bill 267, which would remove the need to cut hospital funding to balance the state’s budget, passed the Senate Finance Committee Tuesday, 4-1.
The bill would undo the cut by removing the funds generated from the Hospital Provider Fee from the limit of taxpayer dollars Colorado is allowed to retain.
The provider fee accesses a charge on hospitals that is matched by the federal government and paid back to hospitals to subsidize care for Medicaid recipients and those without healthcare coverage.
The money is paid back under a formula that generally favors rural hospitals, which means any cuts to it would affect them disproportionately.
Multiple hospitals, including Mercy Regional Medical Center and Southwest Memorial Hospital in Cortez, have said the cut would affect their ability to offer the current level of services.
For Southwest Memorial, it would mean at least a $2 million reduction in funding, and Mercy estimates it could see a 27 percent reduction in Medicaid repayments.
“It’s a significant loss that would negatively affect Mercy,” said David Bruzzese, spokesman for Mercy.
But SB 267 doesn’t stop there as it has several other portions that would benefit rural parts of the state including: shifting almost $400 million to rural schools and bonding for $1.35 billion for transportation infrastructure and other construction needs, 25 percent of which would go toward rural roadways, by leveraging state buildings.
While the bill passed committee it did so begrudgingly because of concerns over its scope and the way it achieves the many goals of its sponsors.
The funding mechanism for the transportation bond is one example of sticky portions of the bill, and contributed to plenty of hand-wringing during Tuesday’s hearing.
“My fear is we are putting a ‘for sale’ sign on the state of Colorado and its facilities, and if ever we run into a problem or issue with paying that bill I’m not sure who’s going to end up owning those facilities,” said Sen. Tim Neville, R-Littleton, who was the only no vote on SB 267.
Sen. Jerry Sonneberg, R-Sterling, said the bill is a chance to give rural Colorado a fair shake despite its under representation in a Legislature that assigns seats in both chambers based on population.
To reinforce the point, representatives from multiple rural hospitals and schools testified in favor of the bill.
Kevin Stansbury, CEO of Lincoln Community Hospital in Hugo, said if nothing is done to correct the provider fee it could lead to closing of hospitals in rural counties.
That would have an immediate economy impact by reducing the number of high paying jobs, and would also halt community growth, Stansbury said. “Can you imagine being a business owner trying to recruit employees to a community that has no healthcare?”
All of that may be for naught, however, for while the bill makes the revenue generated by the provider fee no longer count towards the amount of tax dollars the state is allowed to retain, it also reduces the limit set by the Taxpayer’s Bill of Rights by roughly the same amount.
In the past, enterprising the provider fee was touted as a way to free up funds for schools and transportation. By lowering the revenue limit it would prohibit that, and instead removes hospitals from funding cuts to balance the state’s budget.
That was a sticking point for Democrats who have supported past efforts to make the fee an enterprise fund, and Democratic leadership in the House has all but flat out said the reduction in the revenue limit must be removed or reduced for SB 267 to gain traction in that chamber.
But that is a portion of the bill that Republicans are not willing to let go.
Sonneberg said he is willing to negotiate on the amount that the revenue limit is lowered, but if is removed entirely Republicans would kill the bill by not allowing it to receive a final look by the Senate before the session ends.
“If they’re just going to ultimately take the (revenue limit) and not move it at all I can tell you the bill’s dead… it will die on the calendar,” Sonneberg said.
The bill heads to the Senate Appropriations Committee so it can analyze the fiscal impact of the measure.
lperkins@durangoherald.com