DENVER – The saga of the Hospital Provider Fee came to an end Tuesday in Fowler, a town of just over 1,100 people east of Pueblo, when Gov. John Hickenlooper signed Senate Bill 267 into law.
The bill, which is perhaps the pinnacle of bipartisan effort from the 2017 legislative session, had quite the rollercoaster ride, with more twists and turns than a daytime soap opera, including multiple occasions when it appeared doomed.
The highlight came during a Republican news conference when it was announced that a deal had been struck, only to have a letter delivered from Democratic leadership calling the deal off.
By enterprising the provider fee, which is a charge assessed on health care providers that is then matched by the federal government and redistributed to subsidize the cost of providing care to Colorado’s uninsured and indigent populations, lawmakers avoided cutting $264 million from hospitals. The cuts would have been necessary to balance the budget without the change.
The fund generated by the fee counted toward the revenue limit under the Taxpayer’s Bill of Rights, TABOR, and would have taken it over the 2017-18 budget year cap.
As the formula used to disperse the hospital fee generally favors rural hospitals, the cut would have disproportionately affected small hospitals in remote areas.
Locally, three hospitals were facing funding cuts from the state if SB 267 didn’t get signed: Mercy Regional Medical Center ($1,587,002), Animas Surgical Hospital ($598,904) and Southwest Memorial Hospital in Cortez ($2,251,398).
The cuts would not have resulted in the facilities closing, unlike in some rural areas of the state, but could have led to job losses and reductions in service.
Kent Rogers, CEO of Southwest Health System, which the Cortez hospital is a part of, said in an email that the signing of SB 267 was great news for all of rural Colorado but particularly Montezuma County because of the proportion of customers who receive government assistance.
“Medicaid represents approximately one-third of the services we provide, so we are relieved that this population will not be impacted by funding cuts,” Rogers said.
He added that it was encouraging to see the bipartisan support for the measure and thanked local lawmakers Rep. Marc Catlin, R-Montose, and Sen. Don Coram, R-Montrose, both of whom spoke in favor of SB 267 and voted for its passage.
Rep. Barbara McLachlan, D-Durango, was also among those who voted for the measure.
In addition to reclassifying the hospital fee, SB 267 has a laundry list of other provisions, including lowering the TABOR revenue limit by $200 million to offset the more than $800 million in additional tax money the state can retain after removal of the fee, raising medicaide copays on medication and out-patient treatments, a tax break for small businesses and $30 million for rural schools, which is funded by increasing the special sales tax on retail marijuana to the maximum of 15 percent.
The burden on the retail pot industry is slightly lessened by exempting it from the normal sales tax of 2.9 percent
The bill also approves issuing “certificates of participation” to the tune of $2 billion for transportation and other construction projects, 25 percent of which must be used in rural areas of the state.
The certificates have been likened to taking out second mortgages on state buildings, and were the subject of considerable consternation during the closing days of the 2017 legislative session.