The issue of the Hospital Provider Fee is very confusing and technical. To me, this issue has good arguments on both sides and takes a lot of thought and reasoning to come to the right conclusion. The HPF, associated with Obamacare, was passed by the Legislature in 2009 as a way to get federal dollars to backfill the costs that hospitals incur from Medicaid patients and patients that cannot or do not pay.
I was originally under the impression that the Hospital Provider Fee was a fee that each patient paid, mostly through their health insurance, for each night of stay in a hospital. One of my fellow legislators ran a bill in my Health, Insurance, and Environment Committee that would have required hospitals to put this fee on a patient’s bill. I thought it was a reasonable request, but the hospitals were strongly opposed to it. Finally, they helped me to understand that patients do not pay the fee.
Simply stated, this is how the HPF works: Each hospital sends money – the amount depending on how many nights patients have spent in that hospital – to the Colorado Department of Health Care Policy and Financing. HCPF sends that money to the federal government, which, in turn, sends a check for twice the amount received back to HCPF. After doubling its money, HCPF then disperses the money to the hospitals in the state depending on how many Medicaid and non-paying customers they have. These transactions take place in a matter of minutes. The total amount received by the hospitals is about $800 million per year.
When the HPF was first passed, several Republicans argued that it should be a separate enterprise. However, it was finally decided to connect it with the General Fund. The problem now is that, even though the HPF is not income from Colorado taxpayers, because it is not separate from the General Fund, it artificially bumps the fund up against the TABOR refund trigger. To make the HPF an enterprise would free up about $300 million.
The question before the Legislature today is, do we make the HPF an enterprise like some Republicans originally wanted, and if we do, is it constitutional? Most Republican legislators believe that it would be unconstitutional to make the HPF an enterprise fund. However, Attorney General Cynthia Coffman and former Attorney General John Suthers, both Republicans, say that it would be constitutional. The Democrats in the Legislature and Gov. John Hickenlooper want the money. Almost every business and social organization in the state believes that HPF should be an enterprise.
I don’t like the idea of the HPF in the first place, but the fact is we have it for now. I believe that a mistake was made in 2009 in not making the HPF an enterprise. I agree with the attorneys general that we should fix that mistake. Because the money that will be freed up is for one time only, it should be used for capital projects like highways and building maintenance – and not for legislator pet projects.
J. Paul Brown represents House District 59 in Colorado’s General Assembly. The district encompasses La Plata, Archuleta, San Juan, Ouray and Hinsdale counties and part of Gunnison County. Reach him at jpaul.brown.house@state.co.us.
