Legislators are eyeing several bills aimed at hospitals and lowering costs for patients, but the newest one has many in the medical profession scratching their heads over what they hope would be gained.
Three ones in particular — House Bills 1215, 1226 and 1243 — have hospitals up in arms over what they would actually do.
Two of them were part of the nine-bill package touted by Gov. Jared Polis and a bipartisan group of lawmakers, who said each is designed to help save people money on health care.
One measure, however, has opponents concerned that it might shoot the state’s efforts to reduce costs to patients in the foot. House Bill 1243 would alter how nonprofit hospitals abide by community benefit requirements, which they do in lieu of paying taxes.
Currently, hospitals dedicate the bulk of the money they spend on such community benefits as free or discounted medical care, the shortfall in what they receive from Medicaid and Medicare reimbursements compared to normal hospital rates, and training for patients in dealing with chronic illnesses and training of their own staff.
The bill would restrict or completely eliminate how much of those things they can call a community benefit, and require them to add such things as behavioral health and community-based health care.
It calls for nonprofit hospitals to dedicate at least 3% of their revenue from patient payments — slowly increasing to 5% — on community benefit programs.
That threshold, some hospital administrators say, would be required even if a hospital lost money overall.
“So in effect, a hospital could lose money — like Family Health West and many others did in 2022 — and still have to pay 3% of our revenue,” said Dr. Korrey Klein, chief executive officer at Family Health West, which operates Colorado Canyons Hospital and Medical Center in Fruita.
“So, in order to be a nonprofit hospital, you are forced to pay even if you are losing money?” he added. “At least with taxes, you don’t pay if you sustain losses, so this bill is actually worse than a tax because you are forced by government mandate to pay, even if you don’t have the money.”
Rep. Rick Taggart, R-Grand Junction, has been keeping more than just a close eye on that bill, which is slated for its first committee hearing on Wednesday.
Taggart said not allowing hospitals to consider free or discounted medical care, or training programs for medical professionals as a “community benefit” makes little sense. Consider all the money St. Mary’s Hospital has given to Colorado Mesa University for its nursing and physician assistant programs, he said.
“If that’s not a community benefit, then I don’t know what is,” Taggart said.
Beyond that, Taggart says his greatest concern with the bill is the prohibition from using what hospitals don’t earn in Medicaid reimbursements that they would normally charge, adding that the bill’s House sponsor, Rep. Judy Amabile, D-Boulder, seems willing to negotiate changes.
While the sponsors of another measure, HB1215, have scaled it back a bit, its attempt to restrict the use of charging patients “facility fees” still isn’t acceptable to Colorado hospitals.
Under that bill, at least as it stands now, hospitals wouldn’t be able to charge those fees for such things as primary care, already no-cost preventative care and telemedicine programs.
Some hospitals, but not all, charge such fees for services they provide in outpatient care off their main hospital campuses on top of the professional fees they charge for medical care. Community Hospital doesn’t charge the fee except at its cancer center, but only because it qualifies for federal discounts on cancer medications that more than makes up for the fee to patients.
The bill’s sponsors akin such fees as surprise billing, particularly since most insurance companies won’t pay them, said Rep. Emily Sirota, D-Denver, one of the bill’s sponsors.
“Patients all across Colorado are getting hit with unexpected fees up to and sometimes over a thousand dollars with no clear explanation and no recourse after they’ve already paid for medical services, these fees often aren’t covered by insurance,” Sirota said.
Opponents, however, say the bill would be particularly harmful to smaller, rural hospitals, many of which are engaged in more out-patient services than urban hospitals.
“Taking away these fees would kneecap our local hospitals financially, and lead to cost-shifting,” Soper said. “As the bill is written, it would make it impossible for our independent rural hospitals to stay independent.”
But despite some scaling back of the bill, the Colorado Hospital Association continues to oppose it, saying the bill could take away a needed revenue stream to cover the costs of other medical professionals, such as nurses and non-medical staff that also serve patients.
“While there appears to be a growing realization of some of the consequences of the introduced bill that was based on misguided and misinformed information, it is essential to recognize that any prohibition on facility fees will harm access to care,” the association said in a statement late last week.
Supporters of the measure say that while hospitals have made claims of “catastrophic loses” if the bill were to pass, they “have provided no evidence to support these claims.”
They say that under the federal Affordable Care Act, insurers are required to cover preventative care at no cost to patients. Tacking on facility fees flies in the face of that requirement, they say.
“We have been working with hospitals to address concerns since before the bill was introduced in February,” said Isabel Cruz, policy director at the Colorado Consumer Health Initiative. “With the proposed changes, we have emphasized consumer protection and included provisions that are common sense. Why should a patient get a bill for a service they thought they could count on to be free?”
At the behest of Soper and others, the bill was amended Friday in the House Health & Insurance Committee, which approved the bill on an 8-3 party-line vote, to exclude sole community hospitals such as those in Delta and Fruita. The three Republicans on the committee, including Soper, cast the dissenting votes.
The third measure, HB1226, calls for more transparency in what hospitals are required to report in their expenses, including on salaries for top executives, mergers and whether their profits are being moved out of state.
It builds on a bill the Legislature approved back in 2019, also sponsored by Kennedy and then Sen. Rob Rankin, R-Carbondale, which called on hospitals to disclose certain revenues and expenditures that the Colorado Department of Health Care Policy and Financing now compiles into an annual report.
This year’s report, released in January, called for releasing data on salaries, acquisitions and capital outlays. The report showed that hospital revenues grew faster than operating expenses, leaving them with profits in the hundreds of millions. (The hospital association disputes those findings, saying they don’t account for all hospital clinics and other programs.)
Lawmakers are becoming more concerned about the growing number of nonprofit hospital mergers with out-of-state interests, and whether their record profits are being moved out of state.
That occurred with Grand Junction’s own St. Mary’s Hospital, which, along with its parent company, SCL Health, merged with the Utah-based Intermountain Healthcare last year. At the time, the new parent company said it had no intention of moving SCL profits out of state.
Soper is pushing the bill, in part, because he now sits on the Delta Hospital board of directors, and isn’t satisfied that the 2019 hospital transparency law is requiring hospitals to reveal enough information.
“Recently, there has been conflicting data,” he said. “The bill seeks better data, which means policymakers and consumers can better see the health and values of our hospitals.”
The bill’s first hearing, in the Health & Insurance Committee, is set for Tuesday.