House Committee of Reference Report
Committee on Health & Human Services
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May 8, 2026
After consideration on the merits, the Committee recommends the following:
HB26-1432 be amended as follows, and as so amended, be referred to the Committee of the Whole with favorable recommendation:
Page 1, Line 1Amend printed bill, strike everything below the enacting clause and
Page 1, Line 2substitute:
Page 1, Line 3"SECTION 1. In Colorado Revised Statutes, 25.5-4-402, amend
Page 1, Line 4(3)(a) and (3)(b) as follows:
Page 1, Line 525.5-4-402. Providers - hospital reimbursement - hospital
Page 1, Line 6review program - rules.
Page 1, Line 7(3) (a) (I) In addition to the reimbursement rate process described
Page 1, Line 8in subsection (1) of this section and subject to federal approval and
Page 1, Line 9adequate funding being made available pursuant to section 25.5-4-402.4,
Page 1, Line 10the Colorado healthcare affordability and sustainability enterprise created
Page 1, Line 11in section 25.5-4-402.4 (3) shall pay an additional amount based upon
Page 1, Line 12performance in the hospital quality incentive program to those
Page 1, Line 13hospitals that provide services that improve health-care outcomes for their
Page 1, Line 14patients, including deliver safer, more effective care that
Page 1, Line 15improves patient outcomes and reduces preventable utilization
Page 1, Line 16to reduce health-care costs. The hospital quality incentive
Page 1, Line 17program must include a performance metric related to workplace
Page 1, Line 18violence. The state department shall determine this amount based upon
Page 1, Line 19nationally recognized performance measures established in rules adopted
Page 1, Line 20by the state board. The state quality standards must be consistent with
Page 1, Line 21federal quality standards published by an organization with expertise in
Page 1, Line 22health-care quality, including, but not limited to, the federal centers for
Page 1, Line 23medicare and medicaid services, the agency for healthcare research and
Page 1, Line 24quality, or the national quality forum.
Page 1, Line 25(II) (A) Prior to implementation of the program, the
Page 1, Line 26Colorado healthcare affordability and sustainability
Page 1, Line 27enterprise board shall approve the percentage of hospitals'
Page 2, Line 1reimbursement in the hospital quality incentive program,
Page 2, Line 2program structure, performance measures, and scoring
Page 2, Line 3methodology.
Page 2, Line 4(B) When approving a program pursuant to this subsection
Page 2, Line 5(3)(a), the board shall require that new measures remain in place
Page 2, Line 6for a defined period of time not to exceed three years prior to
Page 2, Line 7modification or replacement of the new measures; except that
Page 2, Line 8the board may approve modifications or replacements prior to
Page 2, Line 9the end of the defined period of time if the board is presented
Page 2, Line 10with evidence that the approved measures are not meeting the
Page 2, Line 11goals of the program or require technical adjustments. Nothing
Page 2, Line 12in this subsection (3)(a) precludes the board from renewing
Page 2, Line 13measures that meet the goals of the program after the defined
Page 2, Line 14period of time not to exceed three years has expired.
Page 2, Line 15(C) Any modifications to the hospital quality incentive
Page 2, Line 16program must be approved by the board prior to implementation;
Page 2, Line 17except that changes necessary to comply with federal law may
Page 2, Line 18be implemented immediately.
Page 2, Line 19(III) Performance measures and methodologies must be
Page 2, Line 20based on factors that are reasonably within hospitals' control,
Page 2, Line 21aligned with nationally recognized standards to the maximum
Page 2, Line 22extent practicable, and designed to minimize administrative
Page 2, Line 23burden, including by avoiding duplicative reporting and
Page 2, Line 24leveraging existing data sources when possible. The hospital
Page 2, Line 25quality incentive program should align with federal quality
Page 2, Line 26standards.
Page 2, Line 27(b) (I) The amount of the payments made pursuant to subsection
Page 2, Line 28(3)(a) of this section must be computed annually. For each state fiscal
Page 2, Line 29year, the total amount of the payments must be no more than seven
Page 2, Line 30percent of the total reimbursements made to hospitals in the previous state
Page 2, Line 31fiscal year.
Page 2, Line 32(II) Notwithstanding subsection (3)(b)(I) of this section,
Page 2, Line 33the maximum percentage of payments must not exceed seven
Page 2, Line 34percent of the total reimbursements made to hospitals in the
Page 2, Line 35previous state fiscal year unless and until the Colorado
Page 2, Line 36healthcare affordability and sustainability enterprise board
Page 2, Line 37formally approves a hospital quality incentive program
Page 2, Line 38pursuant to subsection (3)(a) of this section, developed with
Page 2, Line 39input from hospital representatives with clinical expertise,
Page 2, Line 40after which the maximum percentage of payments must not
Page 2, Line 41exceed nine percent of the total reimbursements made to
Page 2, Line 42hospitals.
Page 2, Line 43SECTION 2. In Colorado Revised Statutes, 25.5-4-402.4, amend
Page 3, Line 1(4)(a)(IV)(E), (4)(c)(I) introductory portion,(5)(b)(VIII), (7)(d)(V), and
Page 3, Line 2(7)(e)(VI); and repeal (8) as follows:
Page 3, Line 325.5-4-402.4. Hospitals - healthcare affordability and
Page 3, Line 4sustainability hospital provider fee - healthcare affordability and
Page 3, Line 5sustainability nursing facility provider fee - healthcare affordability
Page 3, Line 6and sustainability intermediate care facility fee - receipt of public
Page 3, Line 7funds - Colorado healthcare affordability and sustainability
Page 3, Line 8enterprise - federal waiver - funds created - reports - rules -
Page 3, Line 9legislative declaration - definitions - repeal.
Page 3, Line 10(4) Healthcare affordability and sustainability hospital
Page 3, Line 11provider fee.
Page 3, Line 12(a) For the fiscal year commencing July 1, 2017, and for each
Page 3, Line 13fiscal year thereafter, the enterprise is authorized to charge and collect a
Page 3, Line 14healthcare affordability and sustainability hospital provider fee, as
Page 3, Line 15described in 42 CFR 433.68 (b), or as otherwise in compliance with 42
Page 3, Line 16CFR 433, on outpatient and inpatient services provided by all licensed or
Page 3, Line 17certified hospitals, and receive public funds as described in 42 CFR
Page 3, Line 18433.51, for the purpose of obtaining federal financial participation under
Page 3, Line 19the state medical assistance program as described in this article 4 and
Page 3, Line 20articles 5 and 6 of this title 25.5, including disproportionate share hospital
Page 3, Line 21payments pursuant to 42 U.S.C. sec. 1396r-4. If the amount of hospital
Page 3, Line 22provider fee revenue collected exceeds the federal net patient
Page 3, Line 23revenue-based limit on the amount of such fee revenue that may be
Page 3, Line 24collected, requiring repayment to the federal government of excess
Page 3, Line 25federal matching money received, hospitals that received such excess
Page 3, Line 26federal matching money are responsible for repaying the excess federal
Page 3, Line 27money and any associated federal penalties to the federal government.
Page 3, Line 28The enterprise shall use the hospital provider fee revenue to:
Page 3, Line 29(IV) Provide or contract for or arrange the provision of additional
Page 3, Line 30business services to hospitals by:
Page 3, Line 31(E) Providing funding for, and in cooperation with the state
Page 3, Line 32department and hospitals supporting the implementation of a health-care
Page 3, Line 33delivery system reform incentive payments program as described in
Page 3, Line 34subsection (8) of this section the hospital quality incentive program
Page 3, Line 35created in section 25.5-4-402 (3)(a).
Page 3, Line 36(c) (I) In accordance with the redistributive method set forth in 42
Page 3, Line 37CFR 433.68 (e)(1) and (e)(2), the enterprise, acting in concert with or
Page 3, Line 38through an agreement with the state department if required by federal law,
Page 3, Line 39may seek a waiver from the broad-based hospital provider fee
Page 3, Line 40requirement or the uniform hospital provider fee requirement, or both. In
Page 3, Line 41addition, the enterprise, acting in concert with or through an agreement
Page 3, Line 42with the state department if required by federal law, shall seek any federal
Page 3, Line 43waiver necessary to fund and, in cooperation with the state department
Page 4, Line 1and hospitals, support the implementation of a health-care delivery system
Page 4, Line 2reform incentive payments program as described in subsection (8) of this
Page 4, Line 3section. Subject to federal approval and to minimize the financial impact
Page 4, Line 4on certain hospitals, the enterprise may exempt from payment of the
Page 4, Line 5hospital provider fee certain types of hospitals, including but not limited
Page 4, Line 6to:
Page 4, Line 7(5) Healthcare affordability and sustainability hospital
Page 4, Line 8provider fee cash fund.
Page 4, Line 9(b) All money in the hospital provider fee cash fund is subject to
Page 4, Line 10federal matching as authorized under federal law and, subject to annual
Page 4, Line 11appropriation by the general assembly, shall be expended by the
Page 4, Line 12enterprise for the following purposes:
Page 4, Line 13(VIII) Subject to any necessary federal waivers being obtained, to
Page 4, Line 14provide funding for a health-care delivery system reform incentive
Page 4, Line 15payments program as described in subsection (8) of this section Subject
Page 4, Line 16to federal approval, for the hospital quality incentive program
Page 4, Line 17described in section 25.5-4-402 (3);
Page 4, Line 18(7) Colorado healthcare affordability and sustainability
Page 4, Line 19enterprise board.
Page 4, Line 20(d) The enterprise board has, at a minimum, the following duties:
Page 4, Line 21(V) To direct and oversee the enterprise in seeking, in concert
Page 4, Line 22with or through an agreement with the state department if required by
Page 4, Line 23federal law, any federal waiver necessary to fund and, in cooperation with
Page 4, Line 24the state department and hospitals, support the implementation of a
Page 4, Line 25health-care delivery system reform incentive payments program as
Page 4, Line 26described in subsection (8) of this section the hospital quality
Page 4, Line 27incentive program created in section 25.5-4-402 (3)(a);
Page 4, Line 28(e) On or before January 15, 2018, and on or before January 15
Page 4, Line 29each year thereafter, the enterprise board shall submit a written report to
Page 4, Line 30the health and human services committee of the senate and the health and
Page 4, Line 31human services committee of the house of representatives, or any
Page 4, Line 32successor committees, the joint budget committee of the general
Page 4, Line 33assembly, the governor, and the state board. The report shall include, but
Page 4, Line 34need not be limited to:
Page 4, Line 35(VI) A summary of:
Page 4, Line 36(A) The efforts made by the enterprise acting in concert with or
Page 4, Line 37through an agreement with the state department if required by federal law,
Page 4, Line 38to seek any federal waiver necessary to fund and, in cooperation with the
Page 4, Line 39state department and hospitals, support the implementation of a
Page 4, Line 40health-care delivery system reform incentive payments program as
Page 4, Line 41described in subsection (8) of this section to implement the hospital
Page 4, Line 42quality incentive program required pursuant to section
Page 4, Line 4325.5-4-402 (3), including information about the structure of the
Page 5, Line 1hospital quality incentive program and any results achieved as
Page 5, Line 2a result of the hospital quality incentive program; and
Page 5, Line 3(B) The progress actually made by the enterprise, in cooperation
Page 5, Line 4with the state department and hospitals, towards the goal of implementing
Page 5, Line 5such a program and the enterprise board's legislative
Page 5, Line 6recommendations for changes to the hospital quality incentive
Page 5, Line 7program.
Page 5, Line 8(8) Health-care delivery system reform incentive payments
Page 5, Line 9program - funding and implementation. The enterprise, acting in
Page 5, Line 10concert with or through an agreement with the state department if
Page 5, Line 11required by federal law, shall seek any federal waiver necessary to fund
Page 5, Line 12and, in cooperation with the state department and hospitals, support the
Page 5, Line 13implementation, no earlier than October 1, 2019, of a health-care delivery
Page 5, Line 14system reform incentive payments program that will improve health-care
Page 5, Line 15access and outcomes for individuals served by the state department while
Page 5, Line 16efficiently utilizing available financial resources. Such a program must,
Page 5, Line 17at a minimum:
Page 5, Line 18(a) Include an initial planning phase to:
Page 5, Line 19(I) Assess needs; and
Page 5, Line 20(II) Develop achievable outcome-based metrics to be used to
Page 5, Line 21measure progress towards program goals, including the goals of
Page 5, Line 22health-care delivery system integration, improved patient outcomes, and
Page 5, Line 23more efficient provision of care; and
Page 5, Line 24(b) Address the following focus areas:
Page 5, Line 25(I) Care coordination and care transition management;
Page 5, Line 26(II) Integration of physical and behavioral health-care services;
Page 5, Line 27(III) Chronic condition management;
Page 5, Line 28(IV) Targeted population health; and
Page 5, Line 29(V) Data-driven accountability and outcome measurement.
Page 5, Line 30SECTION 3. Safety clause. The general assembly finds,
Page 5, Line 31determines, and declares that this act is necessary for the immediate
Page 5, Line 32preservation of the public peace, health, or safety or for appropriations for
Page 5, Line 33the support and maintenance of the departments of the state and state
Page 5, Line 34institutions.".