2022 Leg Session, Featured, Gold Dome, Sherrie Peif, TABOR, Taxes

Democrats set to kill GOP effort to make Colorado’s hospital provider charge transparent

DENVER — Legislative Democrats are poised to kill a Republican effort to increase transparency for their constituents where fees and spending are concerned.

While Colorado Democrats and Governor Jared Polis continue to tout new state and federal regulations that went into effect Jan. 1 requiring all emergency medical costs to be disclosed before a patient is treated, an opaque charge collected on hospital stays, passed under previous Democrat legislation isn’t getting the same reception.

The fallout is leading two GOP lawmakers to call foul on their Democrat counterparts for not requiring government to follow the same transparency rules they force private industry into.

Senate Bill 22-038, the “Healthcare Affordability and Sustainability Fee,” sponsored by Sen. Jerry Sonnenberg, R-Sterling has been assigned to the State Veterans & Military Affairs Committee, where ideas that majority Democrats don’t agree with go to die.

It’s dubbed the “kill committee” because it’s where Senate leadership sends bills it doesn’t want debated among all the senators on the floor.

Another version of Sonnenberg’s bill is being backed by Minority Leader Hugh McKean, R-Loveland in the House of Representatives. McKean’s bill has not been approved yet by the Democratic majority leadership, as it was filed as a late bill, which is a bill that exceeds a legislators limit and requires special approval. McKean said he is still waiting for confirmation if they will allow the bill.

Correcting a lack of transparency

SB 038 is a “correction” of sorts to the original Hospital Provider Fee bill, House Bill 1293, which was passed in 2009. It required hospitals to charge up to 5.5 percent of a total bill and collect that “fee” on outpatient and inpatient services.

The correction would remove a section of the law that prohibits hospitals from disclosing the fee in a line-item charge on the patients’ bill. In Sonnenberg’s version it would be up to the hospital if it wanted to disclose it as a separate charge. In McKean’s version it would require the hospital to disclose separately. Both men are carrying each other’s bill in their respective chambers.

The fee was for the purpose of supplementing Medicaid reimbursements. For example: If a day in the hospital costs $1,000, and if the federal Medicaid match was 50 percent, Colorado Medicaid would pay the hospital the $1,000, but receives $500 of that back from the federal government. If the state imposed a 5 percent “hospital provider fee” on hospital bills, the $1,000 hospital bill becomes $1,050. Colorado Medicaid would then pay the hospital $1,050. The hospital sends $50 to the Hospital Provider Fee Cash Fund and Colorado Medicaid receives $525 in matching funds from the federal government. Therefore, the $1,050 stay only cost the state $475 rather than the $500 it would have without the fee.

The fee, however, is charged to everyone, so a private pay patient would be on the hook for the entire $1,050.

It increased revenue for the state that was placed in the cash fund that then disbursed funds to hospitals to supplement their Medicaid reimbursements, rather than directly pay for actual services rendered.

HB 1293 was modified in 2017 with Senate Bill 17-267, “Sustainability of Rural Colorado,” which was supported by Sonnenberg.

SB 267, however, created the “Colorado Healthcare Affordability and Sustainability fund,” allowing the state to exceed revenue caps under the Taxpayer’s Bill of rights (TABOR). It was done during a time when the state faced large cuts and those cuts were expected to be passed on to hospitals in the form of lower Medicaid reimbursements.

Those cuts would have crippled Colorado’s hospitals, Sonnenberg said at the time, closing some in smaller, rural areas that Sonnenberg represents on the Eastern Plains.

Why hide the fee?

But Sonnenberg was never in support of hiding the fee.

Sonnenberg and McKean both say they can’t understand why Democrats continue to want to hide the charges patients are paying under this fee, that was dubbed a “bed tax” by Republicans.

“We can’t come up with an answer for that,” Sonnenberg said about why Democrats are afraid to debate his bill. “This one is simple. My bill gives hospitals the option to want to be transparent. For (Democrats) to not even consider even an option, just says volumes about their lack of transparency. It’s hard to fathom.”

McKean said his bill requiring the fee be disclosed separately is because he’s concerned where the fee is being hidden on the bill and if the money collected is being spent where it’s supposed to be spent.

“I have a feeling some are including it in their facility fees,” McKean said after hearing several reports of high facility fee costs on bills that didn’t seem appropriate. “Some are being charged facility fees on telehealth visits. It’s not so much about charging a fee as it is about hiding a tax.”

A transparency double standard

McKean also pointed out the hypocrisy among Democrats who wanted to make sure there was transparency in billing for free standing emergency rooms and other similar charges.

“Yet, in statute, they call out that this (must) stay secret,” McKean said. “It’s government trying to play by a different set of rules and that’s just wrong and not fair. We have prohibited disclosing what the tax is and what the actual cost is that we’re paying for.”

Sonnenberg was in the House when the original bill was passed in 2009. He said he opposed it then, and he hopes Democrats will see the need for transparency.

“Democrats didn’t want to disclose then; we tried to run amendments to disclose it,” Sonnenberg said. “We argued back then the same thing we continue to argue now. This is a bed tax, but the Supreme Court has said we’re wrong, so we’re just dealing with it however we can.  But the fact of the matter is, it at least ought to be transparent.”


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