BY SENATOR(S) Mullica and Kirkmeyer, Bridges, Amabile, Bright, Carson, Catlin, Cutter, Daugherty, Exum, Frizell, Jodeh, Michaelson Jenet, Pelton B., Rich, Roberts, Simpson, Wallace, Ball, Gonzales J., Kipp, Liston, Lundeen, Marchman, Pelton R., Rodriguez, Weissman, Winter F., Coleman;
also REPRESENTATIVE(S) Bird and Brown, Bacon, Boesenecker, Camacho, Carter, Clifford, Froelich, Gilchrist, Gonzalez R., Joseph, Lindsay, Lukens, Mauro, McCormick, Paschal, Phillips, Ricks, Rutinel, Rydin, Sirota, Smith, Soper, Stewart K., Titone, Woodrow, McCluskie.
Concerning the creation of the provider stabilization fund to make provider stabilization payments to eligible safety net providers that serve low-income, uninsured populations in the state, and, in connection therewith, maximizing federal funds to stabilize the health-care safety net and making an appropriation.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Legislative declaration. (1) The general assembly finds and determines that:
(a) Medicaid, the program administered by the department of health care policy and financing under the name "Health First Colorado", is an essential public health coverage program that pays for health care for more than 1.2 million Coloradans;
(b) Medicaid is also a critical component of Colorado's broader health care system, with thousands of health care providers relying on payments from medicaid to help sustain their businesses as they serve Coloradans;
(c) Medicaid has a positive impact on Colorado's economy, as evidenced by data from a 2016 report commissioned by the Colorado Health Foundation showing that, after the medicaid program expansion made possible by the federal "Patient Protection and Affordable Care Act" and Senate Bill 13-200, the state's economy experienced an increase in the state gross domestic product, an increase in jobs, an increase in annual household earnings, and an increase in general fund revenues;
(d) During the public health emergency caused by the COVID-19 pandemic, the federal government allowed all people enrolled in medicaid as of March 2020 to retain their benefits during the period of the public health emergency, which lasted until May 2023;
(e) Following the public health emergency, the federal government required the state to conduct eligibility redeterminations for all medicaid enrollees;
(f) Before the eligibility redetermination, 1.8 million Coloradans were enrolled in the state's medicaid program, and as of May 2024, the state's medicaid enrollment dropped by over 500,000 to 1.27 million;
(g) From spring of 2023 to spring of 2024, Colorado health care providers experienced significant increases in the demand for care from uninsured Coloradans, suggesting that many Coloradans who lost medicaid eligibility became uninsured; and
(h) The increased demand for uncompensated care has had destabilizing financial effects on safety net providers, leading to reduced access to care for many Coloradans.
(2) The general assembly therefore declares that it is:
(a) Enacting the provider stabilization fund as a short-term solution intended to stabilize certain safety net providers; and
(b) Committed to:
(I) Protecting vital primary care safety net infrastructure in the state;
(II) Ensuring Colorado communities can provide access to care for their residents; and
(III) Working toward long-term sustainability for Colorado's health-care safety net.
SECTION 2. In Colorado Revised Statutes, add part 6 to article 3 of title 25.5 as follows:
PART 6
SAFETY NET PROVIDER STABILIZATION
25.5-3-601. Legislative declaration. (1) The general assembly finds and declares that:
(a) Safety net providers in the state incur significant costs by providing services to a large portion of the state's low-income, uninsured populations and individuals and families enrolled in medicaid or the children's basic health plan; and
(b) This part 6 is enacted to leverage money loaned from the unclaimed property trust fund to the provider stabilization fund to obtain federal matching money to make provider stabilization payments to eligible safety net providers in order to:
(I) Reduce the underpayment to safety net providers participating in medicaid or the children's basic health plan and to provide compensation to safety net providers that provide services to low-income, uninsured individuals on a sliding-fee schedule or for free;
(II) Ensure access to high-quality, affordable health care for low-income and uninsured populations; and
(III) Maintain the quality and continuity of services delivered by safety net providers to low-income, uninsured individuals and individuals and families enrolled in medicaid or the children's basic health plan.
25.5-3-602. Definitions.As used in this part 6, unless the context otherwise requires:
(1) "Children's basic health plan" has the same meaning as set forth in section 25.5-8-103 (2).
(2) "Eligible safety net provider" means a safety net provider determined, pursuant to section 25.5-3-604 (2), to be eligible for a provider stabilization payment.
(3) "Low-income, uninsured individual" means an individual:
(a) Receiving services from a safety net provider;
(b) Whose annual household income is at or below two hundred percent of the federal poverty guideline;
(c) Who is not enrolled in medicaid, medicare, or the children's basic health plan; and
(d) For whom a third party is not paying or reimbursing the safety net provider for all or a portion of the amount charged for the services provided to the individual.
(4) "Medicaid" means a medical assistance program under articles 4 to 6 of this title 25.5.
(5) "Medicare" means the "Health Insurance for the Aged Act", title XVIII of the federal "Social Security Act", as amended.
(6) "Provider stabilization fund" or "fund" means the provider stabilization fund created in section 25.5-3-603.
(7) "Provider stabilization fund advisory board" or "advisory board" means the provider stabilization fund advisory board created in section 25.5-3-605.
(8) "Safety net provider" means:
(a) A comprehensive community behavioral health provider, as defined in section 27-50-101 (11);
(b) A rural health clinic, as defined in 42 U.S.C. sec. 1395x (aa)(2);
(c) A federally qualified health center, as defined in 42 U.S.C. sec. 1395x (aa)(4); or
(d) A health-care provider that is delivering primary care services and at least fifty percent of whose client caseload is individuals who are enrolled in medicaid, medicare, or the children's basic health plan or who are low-income, uninsured individuals, or any combination of such enrollees or low-income, uninsured individuals.
(9) "Unclaimed property trust fund" means the unclaimed property trust fund created in section 38-13-801 (1).
25.5-3-603. Provider stabilization fund - creation - use. (1) (a) The provider stabilization fund is created in the state treasury. The provider stabilization fund consists of:
(I) Money credited to the fund as a loan from the unclaimed property trust fund pursuant to section 38-13-801 (6);
(II) Any other money the general assembly may appropriate, transfer, or credit to the fund; and
(III) Any gifts, grants, or donations the state department may receive from public or private sources for the fund.
(b) (I) (A) Money credited to the fund pursuant to section 38-13-801 (6) is an interest-free loan from the unclaimed property trust fund to the fund. The state department may accept and expend the money so credited and shall repay the loan received pursuant to section 38-13-801 (6) no later than January 1, 2045.
(B) If, in any state fiscal year that begins on or after July 1, 2026, state revenues from sources not excluded from state fiscal year spending, as defined in section 24-77-102 (17), do not exceed the limit on state fiscal year spending calculated pursuant to section 24-77-103, the state department shall present to the joint budget committee a proposal to repay all or a portion of the loan earlier than the loan repayment deadline specified in subsection (1)(b)(I)(A) of this section.
(C) To the extent possible and for purposes of repaying the loan from the unclaimed property trust fund, the general assembly shall prioritize making annual transfers from the general fund to the unclaimed property trust fund beginning in the 2030-31 state fiscal year, or sooner, if funds are available.
(II) A loan made from the unclaimed property trust fund to a separate fund associated with a state department:
(A) Is an interfund loan according to governmental accounting standards board codification 1800.102, meaning that the loan is not classified as revenue and is booked as an interfund receivable or payable; and
(B) Is not state fiscal year spending, as defined in section 24-77-102 (17), or state revenues, as defined in section 24-77-103.6 (6)(c), and does not count against either the state fiscal year spending limit imposed by section 20 of article X of the state constitution or the excess state revenues cap, as defined in section 24-77-103.6 (6)(b)(I)(G).
(III) Loan liabilities that are recorded in the fund but that are not required to be paid in the current fiscal year shall not be considered when calculating sufficient statutory fund balance for purposes of section 24-75-109.
(2) The state treasurer shall credit all interest and income derived from the deposit and investment of money in the provider stabilization fund to the general fund. The state treasurer shall invest, as provided by law, any money in the fund not expended for the purposes specified in section 25.5-3-604. Money in the fund, other than interest, shall not be transferred to any other fund and shall not be used for any purpose other than the purposes specified in section 25.5-3-604.
(3) Subject to annual appropriation by the general assembly, the state department shall expend the money in the fund and any federal matching money, in accordance with section 25.5-3-604 (1), to distribute provider stabilization payments to safety net providers determined eligible for payments in accordance with section 25.5-3-604 (2).
(4) The state department, in collaboration with the provider stabilization fund advisory board, may seek, accept, and expend gifts, grants, or donations from private or public sources for the purposes of section 25.5-3-604. The state department shall transmit all money received through gifts, grants, or donations to the state treasurer, who shall credit the money to the provider stabilization fund.
(5) The state department, in consultation with the provider stabilization fund advisory board, shall leverage money in the fund to obtain federal matching money, working with or through the state board to the extent required by federal law or otherwise necessary.
25.5-3-604. Provider stabilization payments - eligibility. (1) (a) The state department, in collaboration with the provider stabilization fund advisory board, shall annually allocate money appropriated by the general assembly from the provider stabilization fund as provider stabilization payments to safety net providers in the state that comply with the requirements of subsection (2) of this section and are determined to be eligible for a provider stabilization payment. The state department shall allocate the provider stabilization payments in amounts proportionate to the number of low-income, uninsured individuals served by an eligible safety net provider relative to the total number of low-income, uninsured individuals served by all eligible safety net providers.
(b) The state department, in consultation with the advisory board, shall establish a schedule for allocating the money appropriated from the provider stabilization fund for eligible safety net providers. The disbursement of money in the provider stabilization fund to eligible safety net providers pursuant to this section is exempt from the provisions of the "Procurement Code", articles 101 to 112 of title 24.
(c) Provider stabilization payments from the provider stabilization fund pursuant to this subsection (1) are made to supplement, not supplant, general fund appropriations to support safety net provider reimbursements.
(2) (a) For a safety net provider to be eligible for a provider stabilization payment pursuant to subsection (1)(a) of this section, the safety net provider shall provide sufficient information to the state department, as specified in subsection (2)(b) of this section, to establish that the provider provides services to low-income, uninsured individuals:
(I) At no cost; or
(II) On a sliding-fee schedule.
(b) A safety net provider applying for a provider stabilization payment shall annually submit to the state department information that the state department, in consultation with the advisory board, determines necessary to establish the provider's eligibility for a provider stabilization payment pursuant to subsection (1)(a) of this section. The safety net provider shall provide the following:
(I) Information demonstrating that the provider is a safety net provider as described in section 25.5-3-602 (8)(a), (8)(b), or (8)(c) or has a client caseload that satisfies the requirements of section 25.5-3-602 (8)(d);
(II) For a safety net provider described in section 25.5-3-602 (8)(d), the total number of patients served, the number of low-income, uninsured individuals that the provider served, and the number of enrollees in medicaid, medicare, or the children's basic health plan that the provider served; and
(III) Information to demonstrate that the provider provides services in compliance with subsection (2)(a)(I) or (2)(a)(II) of this section, as applicable.
(c) For purposes of this subsection (2), the number of patients served is the number of unduplicated users of health-care services and is not the number of visits by a patient.
25.5-3-605. Provider stabilization fund advisory board - creation - membership - duties - repeal. (1) (a) The provider stabilization fund advisory board is created to support the state department with the implementation of this part 6. The advisory board consists of nine members appointed by the governor as follows:
(I) Five members who are eligible safety net providers or who represent associations of eligible safety net providers, at least two of whom must be from a rural area of the state;
(II) Three members who are low-income, uninsured individuals who are Colorado residents and who rely on safety net providers for health care or who are representatives from Colorado-based consumer advocacy organizations that work on safety net health-care matters; and
(III) One member who is an employee of the state department.
(b) (I) The governor shall make the initial appointments to the advisory board as soon as possible after the effective date of this part 6, but no later than August 1, 2025.
(II) Members of the advisory board serve at the pleasure of the governor. The term of appointment is three years.
(c) Members of the advisory board serve without compensation and without reimbursement for expenses.
(d) The advisory board shall elect a chair and vice-chair from among its provider and consumer members and shall meet as necessary at the call of the chair to perform its functions as specified in this part 6.
(2) The advisory board shall consult with the state department, as well as the state board as necessary, in implementing this part 6, including assisting the state department in administering and providing oversight of the provider stabilization fund and in leveraging the fund to obtain federal matching money.
(3) This section is repealed, effective September 1, 2031. Before the repeal, the committee is scheduled for review in accordance with section 2-3-1203.
25.5-3-606. Provider stabilization fund report. (1) Beginning September 1, 2026, and by each September 1 thereafter, the state department, with assistance from the advisory board, shall prepare and submit an annual report concerning the provider stabilization fund to:
(a) The health and human services committee of the house of representatives and the health and human services committee of the senate, or their successor committees;
(b) The joint budget committee;
(c) The governor; and
(d) The state board.
(2) At a minimum, the report must include:
(a) The number of low-income, uninsured individuals and the number of medicaid, medicare, and children's basic health plan enrollees served by eligible safety net providers that received provider stabilization payments in the immediately preceding fiscal year;
(b) The allocation of money to eligible safety net providers, including an itemization of the total amount of provider stabilization payments allocated to each eligible safety net provider; and
(c) Any other information that the state department, in consultation with the advisory board, deems necessary or appropriate.
(3) Notwithstanding the requirement in section 24-1-136 (11)(a)(I), the requirement to submit the report required in this section continues indefinitely.
SECTION 3. In Colorado Revised Statutes, 2-3-1203, add (22)(a)(VIII) as follows:
2-3-1203. Sunset review of advisory committees - legislative declaration - definition - repeal. (22) (a) The following statutory authorizations for the designated advisory committees will repeal on September 1, 2031:
(VIII) The provider stabilization fund advisory board created in section 25.5-3-605.
SECTION 4. In Colorado Revised Statutes, 38-13-801, amend (1)(c); and add (2)(e), (2)(f), and (6) as follows:
38-13-801. Unclaimed property trust fund - creation - payments - interest - appropriations - records - rules. (1) (c) Except as provided in subsection (6) of this section, all interest derived from the deposit and investment of money in the trust fund shall be credited to the trust fund. Such interest is not fiscal year spending of the state for purposes of section 20 of article X of the state constitution.
(2) (e) If claims made pursuant to this article 13 exceed the balance in the unclaimed property trust fund, the state treasurer shall transfer from the general fund to the unclaimed property trust fund an amount needed to pay the claims and shall notify the joint budget committee of the general assembly of the transfer and the amount of the transfer from the general fund.
(f) Interest and, if necessary, principal credited, as required by subsection (6) of this section, as a loan to the provider stabilization fund created in section 25.5-3-603 (1) does not constitute fiscal year spending of the state for purposes of section 20 of article X of the state constitution.
(6) (a) Except as provided in subsection (6)(b) of this section, the state treasurer shall make an interest-free loan of interest derived from the deposit and investment of money in the unclaimed property trust fund to the provider stabilization fund created in section 25.5-3-603 (1) as follows:
(I) On August 1, 2025, twenty-five million dollars;
(II) On August 1, 2026, twenty million dollars; and
(III) On August 1, 2027, August 1, 2028, and August 1, 2029, fifteen million dollars.
(b) If there is an insufficient amount of interest in the unclaimed property trust fund to enable the state treasurer to credit the full amount required for a particular state fiscal year from interest alone, the state treasurer shall credit an amount of principal in the trust fund that is sufficient to enable the state treasurer to credit to the provider stabilization fund the full amount required for that state fiscal year.
SECTION 5. Appropriation. (1) For the 2025-26 state fiscal year, $25,000,000 is appropriated to the department of health care policy and financing. This appropriation is from the provider stabilization fund created in section 25.5-3-603 (1)(a), C.R.S. To implement this act, the department may use this appropriation as follows:
(a) $138,505 for personal services related to general administration, which amount is based on an assumption that the department will require an additional 2.0 FTE;
(b) $15,900 for operating expenses related to general administration; and
(c) $24,845,595 for provider stabilization payments related to other medical services.
SECTION 6. Safety clause. The general assembly finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, or safety or for appropriations for the support and maintenance of the departments of the state and state institutions.
Signed By: James Rashad Coleman, Sr., President of the Senate
Signed By: Julie McCluskie, Speaker of the House of Representatives
Signed By: Esther van Mourik, Secretary of the Senate
Signed By: Vanessa Reilly, Chief Clerk of the House of Representatives
Signed By: Jared S. Polis, Governor of the State of Colorado