Commission hears why provider rates vary and how managed‑care capitation shifts rate authority

The commission spent a long session probing how Colorado pays providers and who controls rate movements going forward. "There's no single methodology that sets all of the rates," Josh Block told the group while walking through the department fact sheet on rates.

Block illustrated three major categories: cost‑based rates (for pharmacies, FQHCs and some nursing facilities), bundled or per‑episode hospital rates and fee‑for‑service fee schedules used by many outpatient and home‑and‑community services. He warned that fee‑schedule changes generally require legislative appropriations, so rates tend to move slowly unless the General Assembly directs otherwise.

On managed care, staff explained that capitated payments require actuarial soundness and shift payment and rate flexibility to the managed‑care entity. "Under managed care...you outsource that function to the entity that is contracted to do that," department staff said. Commissioners sought more analysis on whether dental and other services should move from ASO to risk‑based models and whether a hybrid approach would achieve savings while preserving access.

The department committed to provide additional modeling and concrete slide‑by‑slide pointers for the fact sheets in advance of the next meeting so commissioners can better compare prospective options.