May 04, 2017 11:11 AM UTC

Lawmakers Announce For-Reals Hospital Provider Fee Fix

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• by: Colorado Pols

As the Colorado Independent’s Marianne Goodland reports, the long-sought bipartisan deal to fix a vexing budgetary problem in Colorado that would free up hundreds of millions of dollars, reclassifying the state’s Hospital Provider Fee program to no longer count against revenue limits under the 1992 Taxpayer’s Bill of Rights (TABOR), is apparently close to fruition.

This week, negotiations between the bill’s sponsors became very tense over a provision hiking Medicaid co-pays for prescriptions and both inpatient and outpatient visits. Democrats led by House Majority Leader K.C. Becker and Senate Minority Leader Lucia Guzman insisted they never agreed to that, and would not–while co-sponsoring Republican Sen. Jerry Sonnenberg demanded that the copays increase as part of the deal.

As of today, as Goodland reports, Republicans appear to have successfully extracted their pound of flesh:

Two House lawmakers and two Senate leaders have reached bipartisan agreement on a high-stakes and hard-fought state finance deal that fell apart as many times as it came together.

The bill, which centers around reclassifying the state’s hospital provider fee into a government-owned enterprise, seeks to reverse a $264 million cut to hospitals statewide, which was part of the $26.8 billion budget sent to Gov. John Hickenlooper Wednesday. With just five working days left in the 2017 session, lawmakers fear what would happen to hospitals if an agreement couldn’t be reached.

If approved, the measure, “Sustainability of Rural Colorado,” would save close to a dozen rural hospitals, fund rural schools, give small businesses a break on business personal property taxes, and set aside money for long overdue transportation projects. But perhaps its most sought-after achievement — at least by Democrats — lies in reclassifying the hospital provider fee. The fee helps cover the cost of medical care for low-income Coloradans and is matched by federal dollars. Reclassifying it moves roughly $600 million to $700 million out from beneath state constitutionally-mandated revenue limits set by the Taxpayer’s Bill of Rights (TABOR).

So that’s the good news–a long-sought fix for the Hospital Provider Fee that prevents its growth from impacting other areas of the budget. But here’s what Republicans got in return:

The last major sticking point was whether to require Medicaid recipients to pay a little more for prescriptions and outpatient care. Democratic Rep. Becker of Boulder indicated that was a non-starter for her caucus, while Republican Sonnenberg of Sterling said it was not something he would back away from.

Under the agreement, the cost for prescriptions for Medicaid recipients would double from $1 to $2; outpatient copays would also double from $2 to $4. Both may vary slightly based on family income. A previous agreement also called for patients to pay more for daily inpatient hospital stays, but to appease Democrats, that provision was nixed…

What remains unchanged: The $200 million reduction in the state’s TABOR limits, currently set at about $13.3 billion. The reduction is meant to counterbalance the removal of provider fee revenues – about $656 million in 2017-18 – from the state’s revenue limit into a government-owned enterprise. TABOR allows for enterprises. Among the largest: college tuition , which pays for college costs, and fees paid at state parks, which pay for the operations of those parks.

Also unchanged: State agencies would be required for the 2018-19 fiscal year to submit budgets to the governor’s budget office showing a 2 percent across-the-board cut.

In addition, the deal includes a small business property tax cut that Republicans have wanted for some time. The added burden on Medicaid patients is the highest-profile “victory” that Republicans can claim in this deal–and given Sonnenberg’s unwillingness to compromise over costs that sound trivial to, well, everyone but poor folks on Medicaid, they can’t claim anything like the moral high ground. Other purely ideological “victories” like across-the-board cuts do nothing good politically for Republicans outside their own base voters.

As for Democrats, they accomplished significantly more of their own long-standing objectives despite some painful concessions. Whatever the momentary sticking points were in the negotiations, Republican backs were against the wall. The peril of rural conservative Republican lawmakers with hospitals in their districts that may have closed without this deal, more than any other factor, is what kept Sen. Sonnenberg and Rep. Jon Becker at the bargaining table.

In short, this deal is probably as good as you’re going to get with right-wing activist group Americans For Prosperity calling the shots in the Republican-controlled Colorado Senate. With everything weighed in the balance, Democrats got some long-sought things accomplished–and the hospitals in Jerry Sonnenberg’s district that will stay open constitute an objectively good outcome.

If you want a better deal, your next step is the 2018 elections.