Department warns HR1‑driven cuts to provider‑fee ceiling could force eligibility or benefit cuts

HCPCF staff told commissioners that the federal changes in HR1 reduce the allowable ceiling on provider fees in phases and that Colorado’s statute establishes a funding "hierarchy" if fee revenue falls short. The statute requires that payments to hospitals and their quality incentives be fully funded first; only if revenue is insufficient may benefits or eligibility be reduced.

"If there is not enough state funding, statute requires that payments to hospitals, including their quality incentives, must be fully funded first...and then any eligibility expansion," department staff explained. Commissioners were shown preliminary projections indicating a $121 million reduction in fee revenue in the first half‑step of the federal phase‑down; depending on match rates for affected populations, the loss of federal funds could be an order of magnitude larger.

Members asked the department to produce a set of options and modeling on whether statutory ordering should change, what benefit adjustments are conceptually feasible under federal rules, and how different funding substitutions (general fund, other state sources) would affect federal match. The department agreed to work with stakeholders, the Chase board and JBC staff to present options and the fiscal implications ahead of the November budget submission.