Colorado health care orgs: The stage is 'set for disaster' in 2025
Federal cuts to Medicaid could further strain fledgling finances, they say.
By Analisa Romano – Senior Reporter, Denver Business Journal
Panelists discuss what could be a challenging 2025 for Colorado health care organizations during a Dec. 3 panel at Denver Health.
A group of health care organizations on Tuesday joined together to call attention to an issue that they said could get worse in 2025.
Many Coloradans no longer have Medicaid coverage due to the unwinding of a pandemic-era mandate that kept them enrolled in the program. At the same time, the state's health care leaders say they fear the new presidential administration plans to further cut Medicaid or other health program funding.
The combination could prove unsustainable for health care providers, who rely in part on Medicaid reimbursement to pay for the services they provide and who are already feeling financial pressures, they said.
"In our network, more than half the community health centers have negative financial operating margins right now," said Ross Brooks, CEO of the Colorado Community Health Network (CCHN), during a panel hosted by Denver Health on Dec. 3.
The CCHN represents a network of 20 nonprofit community health centers in the state. Across that network, Brooks said centers have reported a 20% rise in the number of uninsured patients over the last 18 months, which is when the process of re-determining eligible members for Medicaid began.
The federal mandate requiring all Medicaid members to remain enrolled during the pandemic ended in May 2023, at which point every state had to get in touch with members to re-determine whether they could stay enrolled. Since then, providers say that many people have simply continued to go uninsured.
"It really sets the stage for a disaster moving forward from a human impact and also a financial impact," Brooks said of the potential for more Medicaid cuts.
Hospitals across Colorado are reporting a dramatic rise in uncompensated care costs, which are expenses for health care that never get paid by an insurer or a patient. UCHealth said this year its uncompensated care bill totals $600 million.
Denver Health CEO Donna Lynne said in an interview after the panel that she hopes to see the state's Medicaid redetermination process streamlined so that people who lost coverage have an easier time re-enrolling.
Out of 110,000 people on Denver' Health's medical plan who were eligible for Medicaid, Lynne said 40,000 lost coverage during the dis-enrollment period.
As that process concluded this year, she said she expected to see many who now have restored coverage. But she said only about 4,000 people have successfully re-enrolled in the program.
The Colorado Department of Health Care Policy and Financing (HCPF), which took charge of the Medicaid unwind process, has reached out to 711,000 Colorado households about their coverage more than 2.4 million times through a variety of contact methods, according to the department's website.
Since last year, HCPF says that Medicaid membership has returned to pre-pandemic levels with a "slight, consistent increase in total enrollment."
The department said renewal rates have improved significantly this year, and it has launched other initiatives to improve the process. Among them are a $44.5 million state funding request that would go in part to hire more county workers who can process the enrollments, and several collaborative plans that address difficulties in administration of the program.
"It's not business as usual"
Donna Lyne, CEO of Denver Health, speaks during the Building the Future of Health Care panel at Kevin Taylors at the Opera House on July 18 in Denver.
Looking to the 2025 state legislative session, health care organizations say it will be more important than ever to protect funding for public health.
"I think our hope would be that the state, globally, the executive branch, legislative branch, would recognize that there are going to be tough decisions made to protect people's Medicaid benefits if something untoward happens in Washington [D.C.]," Lynne said during the panel.
She said that could be even more of a challenge ahead of an anticipated shortfall in the state's budget next year.
"We are going to have to make some tough decisions in the budget going forward," Lynne said. "It's not business as usual. Maybe that's not this session. Maybe it's the next session."
Jeff Tieman, CEO of the Colorado Hospital Association, said during the panel that his organization is asking state lawmakers to ease back on introducing new regulations for hospitals.
He said local hospital systems are working on 500 new state and federal laws passed over the last few years, some of which conflict with or duplicate other reporting requirements.
Tieman said the result is often a rise in the cost of complying with regulation, which has further strained some struggling hospital budgets.
"At the state level, it's going to be really important to kind of first do no harm as we're watching the federal landscape evolve," he said.
Tieman said he is bracing for the new presidential administration to potentially change the formula for Medicaid funding by transitioning to block grants or a per capita cap that would place more financial burden on states to pay for Medicaid member care.
He said pieces of the Affordable Care Act could also be scaled back or defunded, which would have a similar local financial impact.
Colorado State Rep. Kyle Brown (D-Louisville), said during the panel that more than half of the state's Medicaid budget comes from the federal government.
"We won't be able to backfill $7 billion, $8 billion, $9 billion if they decided to turn that spigot off tomorrow," he said.