2023 Leg Session, 2024 Election, Exclusives, Featured, Gold Dome, HCPF, Health Care

Emails show state health agency desperate to rationalize regulations on Colorado hospitals

(Editor’s note: All of Complete Colorado’s coverage of this issue, dating back to April, 2023 is available here.)

DENVER — Emails obtained by Complete Colorado after a lengthy legal fight with a state agency confirmed suspicions that various officials last year pushed for more regulation and fees on Colorado hospitals despite knowing that their profits were actually declining, not increasing as they tried to convince the public.

What the emails reveal is how Colorado Department of Health Care Policy and Financing (HCPF) staffers coordinated with various legislators and progressive activists to change the narrative about hospital revenues —  just a few days after the Colorado Sun published an article showing that most of Colorado’s hospitals lost hundreds of millions in revenue in 2022 because of inflation and wage increases.

They also showed that at least one Republican lawmaker, Rep. Matt Soper from Mesa County, was among the legislators included on the emails HCPF initially refused to release as part of a March 2023 Colorado Open Records Act (CORA) request by Complete Colorado.

The emails were turned over earlier this month after Denver District Court Judge Jill Dorancy ruled the HCPF wrongly withheld dozens of emails from the initial CORA request based on a vague and often abused exception in the law.

Ironically, the emails were ordered released at the same time that Democrats in the legislature were passing a law carving out an exemption for themselves from Colorado’s open meetings law — and all during “sunshine week,” a week dedicated each year to the celebrating the need for open and transparent government.

The emails were initially denied by HCPF custodian Kathy Snow because they met “attorney-client privilege or deliberative process privilege” under CORA exclusions.

Deliberative process is an exception to open records that alleges a document is “so candid or personal that public disclosure is likely to stifle honest and frank discussion,” and withholding the document outweighs the public’s right to view it.

What the emails show

The emails show agency staff and elected officials knew — before they proposed even more regulations and fees — that Colorado’s hospitals were already experiencing decreased profits.

The CORA request was part of an ongoing Complete Colorado investigation concerning three 2023 legislative bills that purported to support previous claims by both Gov. Jared Polis and HCPF that hospitals are making record profits, retaining record reserves, and spending less money to benefit the communities in which they operate.

However, the recently released emails tell a different story.

  • “Operating profits for systems have fallen in 2022 compared to the high amounts in 2021, 2020, or even 2019,” read one email to Kim Bimestefer, HCPF Director, from Nancy Dolson, HCPF’s Special Financing Division Director. “This is a result of inflationary and wage increase factors like hospitals have mentioned and is something that will continue being a major discussion.”
  • “Denver Health has had significant operating losses through 2022,” the email continues.
  • Dolson calls the decreases “one bad year,” while Bimestefer downplayed it by describing decreased margins as an “aberration” due to “supply chain inflation.”

In another email, and just weeks before Bimestefer planned to release internal reports suggesting profits were at “all-time highs” in Colorado, she asked her staff to compare those reports to the Colorado Sun story that included financials showing one of the largest hospital systems, UCHealth, reported a more than $150 million loss in 2022.

“Revenue from patient care was up by more than $100 million compared with the same period in the prior fiscal year,” the Sun article read. “But the system spent more than $100 million more on wages than it did the previous year and $45 million more on supplies, signs of how inflation is impacting the hospital industry. The trends are similar at other hospital systems in Colorado.”

Bimestefer also asked her staff to look over a separate, third-party report and find anything that could be used to support HCPF’s reports as she prepared for upcoming meetings with Colorado’s healthcare systems — meetings she inferred would be controversial.

“As we go into a transparency/financial battle with (the Colorado Hospital Association) and the hospital systems next week …” that email read in part.

Yet, when staff reported back, they said the Sun article was “not comparable to any of (HCPF’s) current reports that ran through 2021.” However, Dolson told Bimestefer that it was “most comparable” to forecasted revenue that the department generated.

“Our analysis goes beyond the Colorado Sun’s reporting by “adjusting” systems to a comparable first nine months of 2022 and also tracking reserves,” Dolson said in one email. “We can confirm that the numbers Colorado Sun quotes in this article are accurate and in line with our upcoming 2022 ‘preview profits and reserves’ for systems that we have compiled data for so far.”

Ignoring hospital losses

Bimestefer then asked Dolson to compile the department’s response to the conflicting information into one central location so everyone had access to the department’s message.

“Let’s aggregate our emerging messaging/arguments on the hospital reports … for PR etc (sic) into one place,” Bimestefer said.

In this case, PR is short for either press release or public relations.

On January 18, 2023, HCPF released its version of hospital profits that ignored the losses, and instead sent the message that revenues were at all-time highs.  And on Jan. 19, Rep. Soper sent an email to Bimestefer congratulating her for “great coverage” of her reports in the Grand Junction Sentinel.

Soper was the prime sponsor on HB23-1226, a bill that requires hospitals to be more transparent with reporting.  This is at the same time emails showing his and others’ communications on these bills were being kept from the public.

In total, the emails HCPF hid from the public for a year documented Bimestefer’s agenda to overshadow heavy financial losses to the hospital system with data supplied by her department claiming cash windfalls. HCPFs report later became the basis for three new bills forcing yet more fees and regulations on Colorado’s hospital systems.

Hospital organizations began pushing back against the reports immediately, saying the information was outdated and inaccurate and that the new regulations proposed would severely cripple their ability to do business.

In the end, however, House Bills 1215, 1243, and 1226 were introduced in the Colorado legislature in late February and March of 2023 and eventually passed by the Democrat majority and signed into law by Gov. Polis.

Complete Colorado will continue to follow HCPF and its role in forming healthcare policy, that now includes a bill to study universal healthcare for Colorado.


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