Health-Care Payment Programs

HOUSE BILL 26-1432

BY REPRESENTATIVE(S) Soper and Stewart K., Bacon, Boesenecker, Bradley, Brown, Carter, Duran, English, Flanell, Froelich, Gonzalez R., Hamrick, Johnson, Lindsay, McCormick, Nguyen, Rydin, Story, Titone, Winter T., Woodrow, McCluskie; also SENATOR(S) Roberts and Pelton R., Catlin, Kipp, Coleman.

CONCERNING HEALTH-CARE PAYMENT PROGRAMS.

Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 25.5-4-402, amend (3)(a) and (3)(b) as follows: 25.5-4-402. Providers - hospital reimbursement- hospital review program - rules. (3) (a) (I) In addition to the reimbursement rate process described in subsection (1) of this section and subject to FEDERAL APPROVAL AND adequate funding being made available pursuant to section 25.5-4-402.4, the Colorado healthcare affordability and sustainability enterprise created in section 25.5-4-402.4 (3) shall pay an additional amount based upon performance IN THE HOSPITAL QUALITY INCENTIVE PROGRAM to those

Capital letters or bold & italic numbers indicate new material added to existing law; dashes through words or numbers indicate deletions from existing law and such material is not part of the act.

hospitals that provide set vices that improve hcalth-catc outcomes fut thcit patients, including DELIVER SAFER, MORE EFFECTIVE CARE THAT IMPROVES PATIENT OUTCOMES AND REDUCES PREVENTABLE UTILIZATION TO REDUCE HEALTH-CARE COSTS. THE HOSPITAL QUALITY INCENTIVE PROGRAM MUST INCLUDE a performance metric related to workplace violence. The state department shall dctctminc this amount based upon nationally tccognizcd pctfotmancc measures established in 1ulcs adopted by the state boatd. The state quality standat ds must be consistent with federal quality standat ds published by an 01 ganization with expertise in health-cat c quality, including, but not limited to, the federal ccntcts fut medicate and mcdicaid set vices, the agency fut hcalthcat c rcs car ch and quality, or the national quality forum.

(II) (A)

PRIOR TO IMPLEMENTATION OF THE PROGRAM, THE

COLORADO HEALTHCARE AFFORDABILITY AND SUSTAINABILITY ENTERPRISE BOARD SHALL APPROVE THE PERCENTAGE OF HOSPITALS' REIMBURSEMENT IN THE HOSPITAL QUALITY INCENTIVE PROGRAM, PROGRAM STRUCTURE, PERFORMANCE MEASURES, AND SCORING METHODOLOGY.

(B) WHEN APPROVING A PROGRAM PURSUANT TO THIS SUBSECTION

(3)(a), THE BOARD SHALL REQUIRE THAT NEW MEASURES REMAIN IN PLACE FOR A DEFINED PERIOD OF TIME NOT TO EXCEED THREE YEARS PRIOR TO MODIFICATIONORREPLACEMENTOFTHENEWMEASURES;EXCEPTTHATTHE BOARD MAY APPROVE MODIFICATIONS OR REPLACEMENTS PRIOR TO THE END OF THE DEFINED PERIOD OF TIME IF THE BOARD IS PRESENTED WITH EVIDENCE THAT THE APPROVED MEASURES ARE NOT MEETING THE GOALS OF THE PROGRAM OR REQUIRE TECHNICAL ADJUSTMENTS. NOTHING IN THIS SUBSECTION (3)(a) PRECLUDES THE BOARD FROM RENEWING MEASURES THAT MEET THE GOALS OF THE PROGRAM AFTER THE DEFINED PERIOD OF TIME NOT TO EXCEED THREE YEARS HAS EXPIRED. (C)

ANY MODIFICATIONS TO THE HOSPITAL QUALITY INCENTIVE

PROGRAM MUST BE APPROVED BY THE BOARD PRIOR TO IMPLEMENTATION; EXCEPT THAT CHANGES NECESSARY TO COMPLY WITH FEDERAL LAW MAY BE IMPLEMENTED IMMEDIATELY.

(Ill)

PERFORMANCE MEASURES AND METHODOLOGIES MUST BE

BASED ON FACTORS THAT ARE REASONABLY WITHIN HOSPITALS' CONTROL, ALIGNED WITH NATIONALLY RECOGNIZED STANDARDS TO THE MAXIMUM EXTENT PRACTICABLE, AND DESIGNED TO MINIMIZE ADMINISTRATIVE

BURDEN,

INCLUDING

BY

A VOIDING

DUPLICATIVE

REPORTING

AND

LEVERAGING EXISTING DATA SOURCES WHEN POSSIBLE. THE HOSPITAL QUALITY INCENTIVE PROGRAM SHOULD ALIGN WITH FEDERAL QUALITY STANDARDS.

(b) (I) The amount of the payments made pursuant to subsection (3)(a) ofthis section must be computed annually. For each state fiscal year, the total amount of the payments must be no more than seven percent of the total reimbursements made to hospitals in the previous state fiscal year. (II) NOTWITHSTANDING SUBSECTION (3)(b )(1) OF THIS SECTION, THE MAXIMUM PERCENTAGE OF PAYMENTS MUST NOT EXCEED SEVEN PERCENT OF THE TOTAL REIMBURSEMENTS MADE TO HOSPITALS IN THE PREVIOUS STA TE FISCAL YEAR UNLESS AND UNTIL THE COLORADO HEALTH CARE AFFORDABILITY AND SUSTAINABILITY ENTERPRISE BOARD FORMALLY APPROVES A HOSPITAL QUALITY INCENTIVE PROGRAM PURSUANT TO SUBSECTION

(3)(a) OF THIS SECTION, DEVELOPED WITH INPUT FROM

HOS PITAL REPRESENTATIVES WITH CLINICAL EXPERTISE, AFTER WHICH THE MAXIMUM PERCENTAGE OF PAYMENTS MUST NOT EXCEED NINE PERCENT OF THE TOTAL REIMBURSEMENTS MADE TO HOSPITALS.

SECTION 2. In Colorado Revised Statutes, 25.5-4-402.4, amend (4 )( a)(IV)(E), (4 )( c)(I) introductory portion, ( 5)(b )(VIII), (7)( d)(V), and (7)( e)(VI); and repeal (8) as follows: 25.5-4-402.4. Hospitals - healthcare affordability and sustainability hospital provider fee - healthcare affordability and sustainability nursing facility provider fee - healthcare affordability and sustainability intermediate care facility fee - receipt of public funds - Colorado healthcare affordability and sustainability enterprise federal waiver - funds created - reports - rules - legislative declaration - definitions - repeal. (4) Healthcare affordability and sustainability hospital provider

fee. (a) For the fiscal year commencing July 1, 201 7, and for each fiscal year thereafter, the enterprise is authorized to charge and collect a healthcare affordability and sustainability hospital provider fee, as described in 42 CFR 433 .68 (b ), or as otherwise in compliance with 42 CFR 433, on

outpatient and inpatient services provided by all licensed or certified hospitals, and receive public funds as described in 42 CFR 433.51, for the purpose of obtaining federal financial participation under the state medical assistance program as described in this article 4 and articles 5 and 6 of this title 25 .5, including disproportionate share hospital payments pursuant to 42 U.S.C. sec. 1396r-4. If the amount of hospital provider fee revenue collected exceeds the federal net patient revenue-based limit on the amount of such fee revenue that may be collected, requiring repayment to the federal government of excess federal matching money received, hospitals that received such excess federal matching money are responsible for repaying the excess federal money and any associated federal penalties to the federal government. The enterprise shall use the hospital provider fee revenue to: (IV) Provide or contract for or arrange the provision of additional business services to hospitals by: (E) Providing funding for, and in cooperation with the state department and hospitals supporting the implementation of a health-care delivery system reform incentive payments prngranr as described in subsection (8) of this section THE HOSPITAL QUALITY INCENTIVE PROGRAM CREATED IN SECTION 25.5-4-402 (3)(a). (c) (I) In accordance with the redistributive method set forth in 42 CFR 433.68 (e)(l) and (e)(2), the enterprise, acting in concert with or through an agreement with the state department if required by federal law, may seek a waiver from the broad-based hospital provider fee requirement or the uniform hospital provider fee requirement, or both. In addition, the entetptise, acting in concert (\iith 01 thrnugh an agreement with the state department if required by federal law, shall seek any federal waiver necessary to fund and, in cooperation with the state department and hospitals, support the implementation of a health-eat e deliv cry system reform incentive payments prngram as described in subsection (8) of this section. Subject to federal approval and to minimize the financial impact on certain hospitals, the enterprise may exempt from payment of the hospital provider fee certain types of hospitals, including but not limited to: (5) Healthcare affordability and sustainability hospital provider fee cash fund.

(b) All money in the hospital provider fee cash fund is subject to federal matching as authorized under federal law and, subject to annual appropriation by the general assembly, shall be expended by the enterprise for the following purposes: (VIII) Subject to any necessary federnl waivers being obtained, to provide funding for a health-care delivery system 1eform incentive payments progrnm as desetibed in subsection (8) ofthis section SUBJECT TO FEDERAL APPROVAL, FOR THE HOSPITAL QUALITY INCENTIVE PROGRAM DESCRIBED IN SECTION 25.5-4-402 (3); (7) Colorado healthcare affordability and sustainability enterprise board. (d) The enterprise board has, at a minimum, the following duties: (V) To direct and oversee the enterprise in seeking, in concert with or through an agreement with the state department if required by federal law, any federal waiver necessary to fund and, in cooperation with the state department and hospitals, support the implementation of a health-eate delivery system 1efo1m incentive payments progrnm as desetibed in subsection (8) of this section THE HOSPITAL QUALITY INCENTIVE PROGRAM CREATED IN SECTION 25.5-4-402 (3)(a); (e) On or before January 15, 2018, and on or before January 15 each year thereafter, the enterprise board shall submit a written report to the health and human services committee of the senate and the health and human services committee of the house ofrepresentatives, or any successor committees, the joint budget committee of the general assembly, the governor, and the state board. The report shall include, but need not be limited to: (VI) A summary of: (A) The efforts made by the enterprise acting in concert with m through an agteement with the state department iftequited by federnl law, to seek any fedet al wai vet necessary to fund and, in eoopet ation with the state department and hospitals, support the implementation of a health-eat e delivery system 1efo1m incentive payments progrnm as desetibed in subsection (8) of this section TO IMPLEMENT THE HOSPITAL QUALITY

INCENTIVE PROGRAM REQUIRED PURSUANT TO SECTION 25.5-4-402 (3), INCLUDINGINFORMATIONABOUTTHESTRUCTUREOFTHEHOSPITALQUALITY INCENTIVE PROGRAM AND ANY RESULTS ACHIEVED AS A RESULT OF THE HOSPITAL QUALITY INCENTIVE PROGRAM; and

(B) The progress actually made by the enterprise, in cooperation with the state department and hospitals, towards the goal of implementing such a program AND THE ENTERPRISE BOARD'S LEGISLATIVE RECOMMENDATIONS FOR CHANGES TO THE HOSPITAL QUALITY INCENTIVE PROGRAM.

(8) Ilealth-ca1 e deli\1e1-, system I efo11n incenti\1e payments pr og1 a111 - funding and implementation. The ente1p1 ise, acting in conccrt with m through an agreement with the state departinent if required by federal law, shall seek any federal waiver necessary to fund and, in cooperation with the state department and hospitals, support the implementation, no earlier than October 1, 2019, of a health-care delivery system refunn incentive payments program that will improve health-care access and outcomes fur individuals set ved by the state department while efficiently utilizing available financial resomces. Such a program must, at a mtn1mmn: (a) Include an initial planning phase to. (I) Assess needs, and (II) Dev clop achievable outco1ne-based met1 ics to be used to measme progt ess towards progratn goals, including the goals of health-care deli vcry system integration, imp1 O'V ed patient outcomes, and more efficient pr O'V ision of care, and (b) Addi ess the fullo wing focus at eas: (I) Care coordination and care transition management, (II) Integration ofph)isieal and behavioral health-care set vices, (III) Chronic condition nranagement, (IV) Targeted population health, and

(V) Data-di iv en accountability and outcome measurement.

SECTION 3. 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.

Julie McCluskie SPEAKER OF THE HOUSE OF REPRESENTATIVES

James Rashad Coleman, Sr. PRESIDENT OF THE SENATE

Vanessa Reilly CHIEF CLERK OF THE HOUSE OF REPRESENTATIVES

Esther van Mourik SECRETARY OF THE SENATE

APPROVED on Thursday June 4th 2026 at 12:30pm (Date and Time)

Jared S. Polis GOVERNOR OF THE STATE OF COLORADO