July 6, 2026 · Budget Committee · 8,428 words · 9 speakers · 59 segments
. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. THE JOINT BUDGET COMMITTEE WILL COME TO ORDER. WE HAVE ONE THING ON THE AGENDA TODAY. WE'LL SEE HOW FAR WE GET BETWEEN 9 AND, WELL, NOW AND THE START OF THE MEDICAID COMMISSION AT 10. IF WE NEED TO RETURN TO HAVE ANY FURTHER DISCUSSION OR DECISION, WE CAN DO SO UPON AJOURNMENT OF THE MEDICAID COMMISSION. BUT WITH THAT, I THINK I WOULD INVITE, ARE YOU COMING UP? DIRECTOR HARPER? OKAY. DIRECTOR FERRENDINO AND WHOMEVER ELSE IS JOINING, COME ON UP AND PLEASE SHARE WITH US THIS 1331 WHICH THE COMMITTEE WORKED.
Madam Chair, for the work and work Ferrandino, Executive Director of the Office of State Planning and Budget. With me I have the Executive Director Hammer from HICPF and CFO Josh Block. To respond to the request from the last time we were together about the NEMT 1331, We come back with a request to change the pickup rate from 1215 to 1928, which is the rate that we had requested in our comeback during April, March, April timeline when we did comebacks. It seems like it was so long ago, even though it was only a few months ago. HOWEVER, WE DO, GIVEN THE INFORMATION WE HAVE, AND THERE'S THE INITIAL LETTER, THERE'S A LETTER FROM THE DEPARTMENT AS WELL AS THE OFFICIAL 1331 REQUESTING IT. WE TRY TO ANSWER A SIGNIFICANT NUMBER OF QUESTIONS ABOUT THE CONCERNS. THE DEPARTMENT IS MONITORING THE IMPACTS OF THE RATE CHANGES. WE DO THINK, AND ESPECIALLY ON THE SECOND PAGE OF THE LETTER FROM THE DEPARTMENT, IT SHOWS THE FOUR RATES THAT ARE THE ONES THAT ARE THE BIG UTILIZATION RATES WHERE ON THE M-PRAC RECOMMENDATIONS OR ANALYSIS THAT WE ARE AT OR ABOVE THE COMPARABLE STATES WITH THE RATES THAT WE ARE AT FOR OTHER FEED FOR SERVICE STATES. AND THIS IS GIVEN THE JULY IMPLEMENTATION OF THE NEW RATES. THIS IS COMPARING THAT. SO AT THIS TIME WE DON'T BELIEVE THE RATES NEED TO BE ADJUSTED. HOWEVER, GIVEN THE 1331 STATUTE AND THE NEED FOR US TO REQUEST SOMETHING, THAT IS WHY WE DID SUBMIT A 1331 THAT WOULD MOVE US up to that $19 roughly in the pickup rate. That is a cost of about $6.6 million in the general fund, 14.5 federal funds for total funds of roughly $22 million in there. The department, the department can speak to, is monitoring the impacts. Now remember this, it will take a little while for the department to get a good sense of impacts of the rate changes and any disruption given the billing cycle and how long it takes to process. It's several weeks before we'll know the impacts of those rates, but we are monitoring those. And if the department and the administration did see impacts to services, we would come with a 1331 to deal with that. But if this is not approved, given our recommendation, that we wouldn't request that this be moved forward. So with that, I or the department is happy to answer questions.
Senator Mobley.
I'm just curious if we do nothing today and then we find that people are closing up shop or we're not meeting the demand or things change dramatically. What is the impact of that? Like how quickly do we recover from that by then raising the rate? Mr. Block.
Thank you Madam Chair. My name is Josh Block. I'm the Chief Financial Officer of the Department of Health Care Policy and Financing. Senator Amabile that a difficult question right If providers do stop providing services and then there has to be a moment where the rates are increased later and then it takes time for people to re it could be disruptive And I think that the challenge associated with any rate reduction and trying to find out after the fact what the impact was.
Senator Mobley, do you have a follow-up?
But it's happened in the past. Like, how quickly do you implement a new rate? Like, if we decide today to raise the rate, how quickly does that take effect? If we don't do anything and we come back, how quickly does that take effect?
Mr. Block. Thank you, Madam Chair. Senator Mobley, we can do it pretty much instantaneously. Once the JVC gives us direction, we can submit the updates through the system. We can have it done retroactively to the date of the action. So it's a relatively simple process for us. It would happen very quickly.
Representative Taggart.
Thank you, Madam Chair. And this is more a comment for the three of you as compared to a question. I'm very uncomfortable with the analysis. It does not even remotely come close to what I had requested. And what I had requested was to look at the rural situation in particular. Let me give you a couple of examples. Montrose Hospital is 65 miles from Gunnison, where Western is. If a person has a medical need out of the Montrose Hospital, a vehicle has to drive potentially from Montrose to Gunnison, which is 65 miles, and they are uncompensated for those dollars. In my particular case, in Grand Junction, we are in fact the medical center between Salt Lake City and Grand Junction. If there's a need to go to Craig, Colorado, which happens quite often, that the Craig Hospital can't deal with a trauma situation, or excuse me, it wouldn't be trauma in this case, a non-trauma, but can't help an individual in that situation. It's 153 miles to Craig, Colorado from Grand Junction. Those are uncompensated dollars. And what you looked at were states that have fee for service. That's not what I had requested under any circumstances. Fee for service versus managed care, somebody please tell me why that's even important in this discussion. What's important in this discussion is that the rural transportation companies need to be addressed. AND WE DIDN'T HAVE TO ADDRESS IT IN THE PAST BECAUSE PERHAPS WE WERE OVERPAYING, I DON'T KNOW THAT FOR A FACT, WHEN IT WAS $36. BUT GOING TO $19 DOES NOT HAVE THE IMPACT ON RURAL. AND I READ YOUR DOCUMENT THAT WE CAN'T BE DISCRIMINATORY VERSUS URBAN VERSUS RURAL. OKAY, BUT IN AN URBAN SETTING, YOU MIGHT HAVE A MAXIMUM OF 20 TO 30 MILES WORTH OF TRANSPORTATION. IN MY NECK OF THE WOODS WE ARE DEALING WITH 50 TO 150 AND MAYBE EVEN 200 YOU ARE DISCRIMINATING AGAINST RURAL COLORADO AND THAT IS WRONG You are discriminating against rural Colorado and that is wrong I not sure who wants to respond to that but respectfully Rep Taggart I think I read something different in what they presented
which was that actually it is this cut, the pickup fee is actually impacting the urban providers to a greater degree than the rural providers because it's just this one-time fee, and the rural providers are getting a lot more mileage than the urban providers who are relying on that higher pickup fee, which is how I interpreted the issue related to not discriminating.
So if I missed that, could you explain? Madam Chair, I don't disagree with what you're saying. I ask that we look at it from a rural standpoint because of deadhead miles. $19 does not make up for traveling 50 to 150 miles with absolutely no compensation. Zero. No. That the mileage does not kick in until you pick an individual up. So the contention that maybe I misunderstood your original premise.
So what your concern was that these were challenges that these providers were having well before the reduced pickup rate?
Yes and no. They seem to be doing okay because of the fact that we had a $36 pickup fee and we had, correct me if I'm wrong, I think we were at about $4 a mile. So the two in combination seem to have sufficed, so to speak, for the rural carriers. But when we dropped that back initially to $12 and we went to $2.70, there was just absolutely no room on the Deadhead miles.
Director Ferrandino, thoughts or Director Hammer?
Thank you. Madam Chair. I understand, Representative Taggart, the point. I do think that it's the way that deadhead miles are basically paid for are by higher reimbursement rates per mile for when the rides are actually the person is in the ride. So the last page on here shows kind of the chart of the states that are comparison. You can see Colorado at 1215 and 274 per mile. you know other states their mileage even when they do like arizona new york do separate it by rural and urban they have a different both well new york has a different pickup rate and a different mileage rate both those mileage rates are lower than what the current colorado mileage rate both for rural and urban and the pickup rate is you know closer to the rural but in between and if you did approve the 1331, you'd be significantly higher than any of the other pickup rates that are there. So I do think that is why the rates, like, you know, if you think about the federal reimbursement rate for mileage is significantly below. It's in the 40 or 50 cents, I believe. You double that to deal with back and forth from a difficult thing. That would get you to about per mile And then we one and a half times higher than that to deal with cost of driver and other things to be able to deal with that So I do think the way the structure is done does compensate for deadhead miles by making sure that the mileage rate for when you have a person is significantly higher than what that cost is just for that ride during that time. So that's how that is addressed and we do think that the pickup one going up is probably the better given, as the chair mentioned, the impact of shorter rides where you don't have that, where the pickup rates do significantly impact the more urban areas. And when you look at the cuts and the letter talks about this, the reduction in the urban areas and metro areas is significantly higher as a percentage given the rates that were done. SET BY THE COMMITTEE VERSUS WHAT THEY WERE PRIOR. BOTH SAW REDUCTIONS, BUT THE RURAL SAW A MUCH BIGGER REDUCTION. THIS TRIES TO ADDRESS BOTH OF THOSE PIECES BY DOING IT THROUGH THE PICKUP AREA, WHERE WE FELT COMFORTABLE THAT WAS SOMETHING WE A COUPLE MONTHS AGO THOUGHT WAS APPROPRIATE. WE DO THINK THIS HELPS TO ADDRESS SOME OF THOSE CONCERNS. I do think I understand your point, Representative Taggart, but I think and why we look at fee for services, we are a fee for service state. So it is important to compare apples to apples with what other states who have fee for service managed care that can be bundled in. You might miss it. That's why when MPRAC looks at this, they try and look at comparative states who have similar financial models than we. And as you look at these, these are not, you know, states that are here are not that dissimilar. Alaska is very different, of course, than Colorado, but Arizona, New Mexico, Minnesota is one we usually compare ourselves to, Wisconsin. So you can see pretty similar rates in places where we are at or above what those are. Representative Brown.
Thank you, Madam Chair, and I want to thank your team for preparing this for us, especially given the sort of process, this weird process that we are faced with. It is, I know that, you know, the department may or may not agree with whether we should even be sitting here, but I appreciate the option. I guess one of the questions that I would have following up on what Director Ferrandino was saying and in sort of also in reaction to what my colleague was saying about sort of the rural perspective here, I sort of expected when we had this conversation a while ago that the department might come back with some specific rural fix, something like what you see from either New York or Arizona here where you've got sort of rural rates and urban rates. And I will just sort of note that that is, you know, that there are certainly precedent in Medicaid with certain providers who serve rural communities getting paid differently or different rates or whatever, cost-based rates. So I wanted to just understand sort of why the department came back with this particular approach. and maybe I think Director Ferrandino may have indicated that already but why you think this sort of provides for the problem that RepTagger has highlighted.
Mr. Block. Thank you Madam Chair. Representative Brown. So this question about urban versus rural is a complicated one and I think one of the things that as Director Ferrandino has talked about has kind of come to light is that the primary way in which we are accounting for the difference in cost here is via that mileage rate. And fundamentally, as our staff looked at it, and as we looked at it, it felt that that is actually a very appropriate way to compensate it. A marginal increase in the pickup rate for something, as Representative Taggart talked about, of a 130-mile trip, if you increase that pickup rate by $10, is that truly meaningful? I think that's where the mileage rate becomes the most important. And when it comes to this question of should we or should we not have a payment methodology that changes either the pickup rate or the mileage rate based on geography. That's something that I don't think that we would want to design on the fly over the course of a couple of weeks. There are a lot of complicated questions, right? What constitutes rural versus what doesn't? What happens in trips that start in rural areas but end in urban ones? And suddenly there are lots and lots of nuances. I don't think that we would shut the door associated with having a separate sort of payment policy. However, I think that's something that requires careful consideration above and beyond the way in which the mileage rate already serves to that effect. Thank you.
Senator Motley. Just on the comparing to other states. So I guess I had maybe three questions. One is, do we have the same approximate mix of Medicaid recipients who are living in rural versus urban areas? because every state has rural, even New York has rural. And then do we have the same, like, do our providers have the same payer mix? Like, I talked to a provider over the break who said that they have some Medicare patients and some Medicaid patients, and they get a different reimbursement for their Medicare patients. And then, I don't know, do other states have private insurance, a requirement that private insurance also reimburse? Because presumably that would also be at a higher rate than ours. So they might have a different payer mix that makes it easier for them to do this work for less money. Director Hammer.
Yes, thank you, Madam Chair and Senator Mamble. Those are great questions. Thank you for asking them. I don't know that we know the answers to them, but I think they're reasonable for us to evaluate. In terms of your final question, I have done a lot of work around the nation, and it would be surprising to me if there is a lot of private health insurance coverage for non-emergency medical transportation. Of course there is for emergent transportation, EMS services, but it is a unique Medicaid benefit in many ways. So I think that's worth seeing, but we can, I think, quickly see if there's any state-based mandates. Again, a state-based insurance mandate would just be applicable to plans that are regulated by the state, so small group market and individual market. So we can certainly look into that, although I would guess it's quite low. In terms of the payer mix, that would be something we could ask the All-Payer Claims Database Team at Civic to help us understand because then we could see adjudicated claims across different payers for this transportation benefit. So I can reach out to Kristen Paulson, their CEO, and see if they can help us answer the payer mix question, both for Colorado providers and then if they have any knowledge of APCDs across the country that have that too. In terms of mix of members, all of the states, if I'm looking quickly, with the exception of Wisconsin, are Medicaid expansion states in South Dakota. And so I would say probably in general, the answer is yes. The mix is probably the same in terms of urban concentration in for Minnesota the Twin Cities for Nebraska around Omaha and Lincoln and then larger places outside So we can look at that comparison but I would imagine there doesn appear to be other than probably tribal participation in Arizona and the non-expansion states. I think we'd be pretty close.
Senator Kirkmeyer. Thank you, Madam Chair. So what happens if we have no providers? We don't have anybody who's going to drive the 153 miles to go pick somebody up that's non-emergent. Then what happens? Who does it?
Mr. Block. Thank you, Madam Chair. Senator Kirkmeyer, so let's say for a minute that we do see a significant drop in number of trips and we see information that generally indicates that the service isn't being provided to the degree it was or something like that. The correct path forward for the department and executive branch is to come back to this committee with a further 1331 request with a request for funding to increase the rate. That is the most important option here. That if we do see it, the department has to come back to this committee with a request.
Senator Crookweire. I understand that part of it. I'm asking if there are no providers because it seems to me we're being pretty short-sighted because quite frankly, I don't really care what's happening in these other states. What I care about is if the service isn't provided and there's a lapse in the provision of service while we're thinking about it. So I want to know. If there isn't a provider that says we're not going to drive 153 miles when we don't know for sure we have a pickup because something may change by the time we get there. And so we lose providers because they're just like flat out. We're not making money. We're going to stop doing it. Who then has to pick up the call? Is it an ambulance? Is it emergency services? Which becomes quite a bit more expensive.
I think to add on to Senator Kirkmeyer's questions, I would just want to understand what HICPF and the Rays actually are doing to help people get connected to other providers. Because my understanding, if we're talking about out on the Western Slope, and if there's a provider that has something like 70% of the market, but there are several other providers. What can be done to ensure those other providers are stepping into this role? Because clearly sending an ambulance to take someone to a methadone clinic is not going to happen. Madam Chair.
Thank you. Senator Kirkmeyer, thank you for the question. I think there are a variety of things that could happen. One, the trip wouldn't happen. I think we would need to be honest about that. the trip wouldn't happen. And so that is one potential outcome if there are not enough providers. The second is to monitor and ensure and try and make sure we have additional providers. If some providers choose to leave serving the program, we would do active recruitment to ensure we have an adequate network. There's an opportunity to look at competition and adequacy of the network. And so that is, I think, another thing that we can monitor. There's a monitor and then there's an act on.
And so I think Senator Kirkmeyer. Having run an emergency medical services for a full county, that quite frankly this is just not a Western Slope issue. It could happen just quite frankly in Will County. You could drive 85 to 100 miles to pick somebody up, maybe, maybe not, and not get the trip and not be able to get paid. So what will happen is they call 911 and they get an emergency services and they have to head out there And it just puts that much stress on the whole system and maybe they get there maybe they don but in the meantime you know who going to get billed medicaid even if they drive all the way out there and it's an emergency service and it's an ambulance you're still going to get billed because that's how they do it so then what so then we end up paying for it anyways
DIRECTOR FARRANDINO. THANK YOU. APPRECIATE THIS. STEP BACK A SECOND. I WANT TO JUST FRAME WHY WE WERE COMFORTABLE COMING WITH THE 1331. UNDERSTAND ALL THE ANGST IN THE SYSTEM FROM THE COMMITTEE, FROM THE DEPARTMENT AS WELL AS WE LOOK AT THIS. I mean, rates from the beginning of this decade, maybe a little earlier, were significantly raised within NEMT. We saw a significant increase in cost, abnormal as the report, the Manat report showed, compared to anywhere else in the nation. And we saw a significant amount of fraud within the NEMT sector through partnership with the department, the administration and this committee were able to adjust that and be able to bring down the rates. We saw a significant change in rates to deal with what we saw as significantly higher payments than were justified. And that resulted not in, you know, a lot of providers are providing services at the rates they were providing very legitimately and with no issues, but we were paying significantly more than we should have. and that led people to come into the market and have fraudulent behavior. So we pulled that back. This last session, you and Partnership changed the rate significantly. I think what we are trying to do is say, okay, are those rates that you set comparable to what other states are having and are able to provide those services? Because we don't know what each individual, We don't have, as CFO Block has said several times to me, we don't know all the businesses, their internal cost structures, all of that. We don't get that information. We don't know if these rates. What we can do is look at in other states that have similar structures, similar areas, they are paid at or below what we're paying now on July 1st. And they're able to provide those services in both urban and rural areas across their states. So that's why we feel comfortable that the rates and why we don't recommend the change. However, given the amount of change, that's why we felt comfortable coming back with a 1331 to give this committee an option, because it is a significant, you as a committee and us change the rate significantly. So it's a big change. And maybe we change it too much because of, not because maybe those rates that we're talking about on July 1st are not legitimate, but the change in the structures that businesses have built up is not able to change on a dime as quickly as we would want to see because they've built, they've bought cars, they've built higher people. That's going to take time. This change in the payment rate will put $22 million more into the entire NEMT system, which is not an insignificant amount of money into that system, 6.6 general fund. I think the reason to do it would be it helps to stabilize and helps to ensure that the disruption is less than what could happen. Maybe there's not going to be much of a disruption, but we don't know. And the unknown is worrisome especially for individuals who need these rides And if those rides don happen they could go to higher cost options or they could lack services which could lead to higher cost options because they don't get the medical care they need to manage whatever issues they are dealing with. And that could lead to emergency care if they're not doing that. So that's why we're coming forward and saying, yes, here's an option. This is what we feel comfortable with. That doesn't, as CFO Block said, does not, you know, this was quick. We're talking three weeks from when last met, if that. You know, pulling this together and having all the analysis was pretty quick. To be able to have this long conversation, next legislative session with the next administration and what they want to do and how the next committee wants to interact is definitely something we are happy to discuss. We think this is a reasonable option to maybe mitigate the concern some to help stabilize what could be disruptions. But it's not the end of the conversation. Just like this conversation has been happening for years, this will continue to happen. We think this is a reasonable, maybe not needed in our opinion, but reasonable approach to manage the disruption that could happen from providers.
Representative Brown. Thank you, Madam Chair. And I appreciate that, Director Ferrandino, and I appreciate the analysis. I think what is particularly, what I've been particularly struggling with is the information that seems to have come before the committee that indicates that this, that the rate we've set is a problem is from providers themselves. And I don't want to discount that. It is they know their businesses. One question I would ask is it was my understanding in talking with some of the providers that the department has been provided with some information from them about costs and some of their business practices. And while I understand they don't, you all don't sort of have these independently verified cost reports, I wonder to what extent that sort of data played into the recommendation that you're making today.
Director Hamer. Yes, Madam Chair, thank you. Representative Brown, we are listening closely to our provider community, and we understand their concerns. We are looking at their data. As you said, there is not a structured way for us to look at the operating expenses of these providers like we have in some of our other benefits. It is from our analysis and what we understand we have learned from providers with this change, most if not all providers will continue to have a positive operating margin. There are without question long trips that will compromise that operating in that trip. but we, looking at the average length of trips, are actually quite short. And I understand and embrace the challenges of rural Colorado, but most rides are between seven and eight miles, which then stays within a common community. So we are listening to providers. We are actively wanting to understand what their cost structure is, how the changes in the rates, and again, it is a significant rate change, which is causing concern and disruption, which is why we felt comfortable providing the information. And I apologize, Representative Taggart, if this information was not what you were looking for. We will keep trying. Keep telling us what you need from us, and we will keep trying. It was not our intent not to give you the information that you were looking for. So if we can continue. to try and provide additional information, we're happy to do that, but we are looking at the information providers are giving us.
Rep Brown, you have a follow-up?
Yeah, thanks, Madam Chair. I appreciate that. I, Director Hammer, thank you very much for that. I think, you know, one of the challenges, so based on that information that you have analyzed, you say that it looks like everybody's, for the most part, going to be able to maintain a positive operating margin if we were to adopt this. I guess that's the real struggle to me is, you know, we don't let providers set their own rates, and certainly every provider in the Medicaid space would like to be paid more. We would like to pay them more. We can't, right? The hospitals would like to not be paid 70 cents on the dollar in terms of their costs, right? And I certainly understand that. So I guess my question is, but at the end of the day, our rates have to support sort of an adequate network. and other states who have rates that seem to be comparable to ours, who have similar challenges about urban versus rural, I mean, do we believe they have adequate networks, and do we believe that, or as, you know, and I also recognize what Senator Kirkmeyer was saying, which is like we don't really care what's going on in other states. We need to take care of ourselves. That's fine. We do look to other states for their experience and for sort of best practices, And when we're kind of dramatically out of whack with what the rest of the country is doing, then that should cause us some concern, unless there's some sort of compelling reason. So I guess the question, I guess my question is sort of, you know, to what degree can you provide a little bit more color into why you think that these, the current rates maybe even or certainly the 1331 request will maintain an adequate network, especially in our rural communities, while the providers are sort of telling us that, like, they're going to go out of business or whatever. Does that make any sense? That was a very long question. Sorry about that.
Dr. Hammer. Thank you, Madam Chair and Representative Brown. I think that you are right. This is the dynamic tension of provider community of any kind, not just transportation providers, wanting to do the right thing, wanting to serve Medicaid members, wanting to have a successful business. And in a resource-constrained environment, then there are difficult choices that have to be made. And so we have the mechanisms to track access to services. The individual who oversees these benefits is incredibly data savvy and able to look at things. We commit to monitoring it. I think this is why we chose the approach we did to come with the 1331 option to give you the potential to make the decision to put $22 million back into the system to ensure its stability. But that is a choice that you all would need to make, and we would do the pieces of implementing it as quickly as possible to ensure that stability and continuing to monitor access.
Representative Taggart. Thank you, Madam Chair. I guess I understand this as an interim strategy, but where I have a problem is what you have put forth today BEYOND THAT IS REACTIONARY IN NATURE AS COMPARED TO BEING PROACTIVE AND LET ME GIVE YOU AN EXAMPLE FOR INSTANCE NEW YORK HERE IS URBAN VERSUS REACTIONARY compared to being proactive And let me give you an example for instance New York here is urban versus rural I grew up in upstate New York. I know upstate New York like the back of my hand. The difference between upstate New York and Colorado is the delta between major hospitals is about 50 miles at max. you can get to a major hospital all along the Thruway and all along the Southern Tier. The only area would be problematic is where I grew up in the Lake Placid, Saranac Lake area, and that's about the only. So while I appreciate the comparison to New York, New York is very different than Colorado. What's not here is what's happening in Wyoming, what's happening in Montana, What's happening in Idaho and what's happening in Utah? New Mexico and Arizona here, but New Mexico is not doing anything. I don't know why, but I don't know that that helps us. And then the second part that to me seems very reactionary, because we didn't do that. We went and looked at the nine fee for service as compared to looking at states in the Rocky Mountain region, which are very different from the rest of the country in that sense that there are only a few major urban areas and the rest of the state is pretty rural to say the least. The second part that I find reactionary is let's wait and see what happens with the providers. What's said to me is, Rick, you have five other providers in Grand Junction. You're making the assumption by way of that that those folks have the assets, both from a human standpoint and a vehicle standpoint, that they can expand into those 150 to 100 mile trips. That's not a good assumption. That's not how we do business by making that kind of assumption that they can automatically flex because they may not be. So if I was hearing that, Rick, this is an interim, and give us two or three months to do more proactive work, I would be a lot more comfortable. But waiting and hoping that we don't lose providers, you have to understand, as a business executive, I find that very reactionary. And I am not comfortable with that approach.
Senator Kirkmeyer. Thank you, Madam Chair. Okay, so in all your data research, what is the mileage threshold to be able to break even? If we go from 12 to 19, what I thought I heard was it's like that satisfies if it's a 7 to 8 mile trip. What's the mileage threshold, though, for in rural Colorado? And what are the number of rural trips that are over that 7 to 8 miles? because I don't know anywhere in rural Colorado, and this is not just a western slope issue, I might point out. I mean, it could be a front-range issue, quite frankly, just as much as it is in the western slope. It's certainly an eastern plains issue. It certainly could be a Weld County issue. It certainly could be a San Luis Valley issue. I mean, it's not just a western slope issue, right? I mean, we know there are ten big counties, and the rest of the balance of the state is essentially rural. So what is it you have all this data what is it did we go look at the data for rural Colorado Because if their trips are more than seven or eight miles I don think they even going to be able to break even
Director Hammer. Madam Chair, thank you, Senator Kirkmeyer. I don't know the answer to your questions sitting here, but I'm happy to make sure we get them to you. May I continue? And Representative Taggart, I appreciate the feedback that this feels reactionary and passive. I appreciate that feedback, and we can commit to coming together over the next bit, even through the Medicaid Commission as an opportunity or through other structures with the Joint Budget Committee, to put together a more proactive approach. First of all, we can go look at Wyoming, Montana, Idaho, Utah, our Intermountain West colleagues. I think that's a very reasonable request that we're happy to look into. trying to do the Calculation Center Kirkmeyer, as you just asked, with understanding and then also providing the range of not just average, right, because when you have an average, there's obviously going to be outliers. And so the distance that we have in our claims data of the distance traveled in rural frontier and in our urban counties. As Director Block had mentioned, there is some nuance around whether or not it starts in a rural community and ends in an urban community, which often does happen because they're coming to receive medical care in an urban center. So we can continue that analysis and get it to you over the course of the summer.
Senator Kirkmeyer. Thank you. I'd also like to know what's going on with House Bill 26, 13, 28 and the service reclassification.
Yes. Yes, Madam Chair. Thank you, Senator Kirkmeyer. It's my understanding, and I can confirm this, it's my understanding, we are working on the state plan amendment that needs to be submitted to the federal government. It would be retroactive to July 1st. If we submit it within the quarter of the 1st of July, the change would be retroactive in the way those services are classified and the federal fiscal participation, financial participation of those services.
Senator Parkmeyer. So do we anticipate that that's actually going to happen? Because the reclassification is how we're able to pull down more federal dollars, which is why I'm curious as to why we need to put more general fund in here than if we're going to pull down more federal dollars because of that reclassification from administrative services to medical services. Yes. And I'm wondering why we weren't doing that before. Yes.
Director Hammer. Thank you, Madam Chair. Thank you, Senator Kirkmeyer. I don't know why we weren't doing that before. I don't have the answer to that question. I can assure you we are moving forward with the implementation of that and submitting the SPA and reclassifying.
And Director Block is going to help me out. Madam Chair Sorry I couldn't get in there faster than Gretchen on Senator Kirkmeyer the reason that we weren't doing it before was because statute prohibited us from doing so it was a weird technical thing in statute that required us to classify NEMT as administrative expenditure and not medical assistance which prevented us from getting a higher federal match rate
Sure, well then here's my next question
Senator Kirkmeyer
If we knew about that why weren't we informed and made the statute change earlier How did we not know? How did the department not know about changing from administrative services to medical services would allow us to draw down an immense amount of federal funds? And why weren't we informed three years ago, two years ago?
Mr. Block.
Thank you, Madam Chair. So, Senator Kirkmeyer, the reason that this fell into a weird area is that it only affects one particular Medicaid population, not the entire thing. This bill 1328 I think did not save general fund It reduced our costs related to hospital provider fee The reason that this became an issue was because of some changes that happened in federal regulation I think three or four years ago And it wasn't particularly clear to us that, rather, it wasn't. The timing had worked out in that we started seeing cost increase and it was the hospital association that brought it to us and brought it in there. And I think the reason that, like the fundamental reason that this didn't happen earlier, in addition to the statutory component, is that generally speaking, non-emergency medical transportation is reimbursed at the same base federal funds rate than everything else is. It's just 50%. And it's only this weird nuance associated with the expansion population. As this started to come to light, the hospital association brought it to us. We discussed what was going on. We determined statute change was needed. We worked with them to try to turn this into an issue.
Senator Mobley.
So I just want to circle back. We had a bunch of fraud and abuse. We had bad actors. We were paying way over what we should be paying. We made a correction, and now we're being asked to correct the correction. And I'm just not sure. like I'm looking at this chart and it looks like we're actually paying a lot on the mileage, which is what's supposed to help the rurals, and we're paying about the same on the pickup, which is what impacts the urban areas. So I'm just not convinced that we got it wrong on our correction. And I think, you know, if we were hot mad at you all for getting it wrong in in the wrong direction and overpaying. And so I'm okay with us seeing if this is, if we landed in the right spot. I would also be okay with us splitting the difference somehow if that's what this group wants. But I don't want to suggest that this is an, that there's something wrong with this analysis. it looks pretty eye-opening to me that we're paying almost double on the mileage from a lot of the other states. So I don't know. I don't want to pay too much. I don't want to pay too little. And I get how hard it is for us to sort that out. And I get for the providers to have gone from being dramatically overpaid to maybe even being paid now what's right is going to be jarring for your business. I mean, you hire people. You set things up. You pay rent. You do all that based on what your income is. And if their income is going to go down, they are going to have to adjust. So I don't want to suggest that we think, I don't think anyway that this is way off the mark.
Well, I would say we've got about five more minutes prior to heading over for the commission to start. I hear Senator Amabile, I don't know if anyone else has a preference for the morning if you feel like you have enough information that you just want to decide one way or the other on any sort of action or if you would all prefer to come back later after thinking about it. Rep Brown.
Thank you, Madam Chair. I think it's I agree with Senator Amabile and the only nuance that I would say is I think that Representative Taggart has raised some and Representative Kirkmeyer has raised some particular important points in terms of data and analysis and I think at this point I'm not comfortable moving forward with anything in particular until we have a better understanding of sort of what's possible what other states in the region look like and some of the other analysis that director hammer committed to get to us so I think I would prefer to at least put this conversation on pause until we can have a better understanding of sort of what the what the implications would be from based on those new data points, I guess.
I feel similarly, you know, and there's nothing that prevents us from coming back. We know we have somewhat regular meeting times with the Medicaid Commission over the next few months anyway, although I think maybe in addition to analysis, what I would really be looking for is an understanding from the department and the raise on what are you doing for outreach, not just waiting for claims data to come in, and I can't remember how many days it is, like 120, 150 days is what people have to submit their claims. So that feels to me way too long to wait to see if we are having challenges. I would want to understand, you know, what can you tell us about, are there clients not getting rides? what is happening with some of these smaller providers who may be more incentivized to, you know, pick up more trips and things if, you know, there is actually maybe more competition in the marketplace at this point. So I would appreciate maybe a deeper analysis, though I, too, think that what you have given us is reasonable, especially given the short time turnaround, but also would appreciate some more, I guess, proactive work with the providers. I don't know if anybody else has a different thought. Rep Taggart.
Thank you, Madam Chair. That's why I use the term interim. I, doing nothing to me is really problematic because we are going to lose providers. I already started to get those emails across rural Colorado that they done Several of them And if you like to see them I pass them on But they done And so that's why I said before, and I think I said to Director Ferrandino when we talked about this late last week, I'm not okay, but if this is an interim solution where there's a commitment to more analysis to really get this right in a proactive manner, I would sign off on it. But to do nothing, there's no assurance that these providers are going to stay in place. and in fact I have notification from some of them that they're done and it's not as Senator Kirkmeyer has said it's not just the western slope and in several cases it's folks that represent the alpine areas the resort areas of the state that have even more higher expense areas than even rural Colorado, in some instances because of the cost of gasoline in those markets and the cost of labor, obviously. So I would be more comfortable if we said this is an interim solution at the 1928 and leaving the 274 alone with a commitment to come back with more analysis.
Senator Bridges? Vice Chair Bridges?
Thank you, Madam Chair. I do hear, though, that Medicaid has the ability to increase these rates if they see the need without our action here. Is that you over-expenditure authority? There is no over-expenditure authority on this? Why can't you increase rates?
Director Ferentino.
Thank you, Madam Chair. Mr. Vice Chair. So yes, there is over expenditure. However, the custom is that this committee in the department in consultation with the committee sets the rates for these things. SO WE WOULDN JUST GO AND DO NOT THINK THIS COMMITTEE WOULD WANT TO ALLOW THE DEPARTMENT JUST TO CONTINUE TO CHANGE RATES OR SET RATES WITHOUT CONVERSATION ACTION BY THIS COMMITTEE BECAUSE THAT COULD OPEN UP A PRETTY BIG allow the department just to continue to change rates or set rates without conversation action by this committee because that could open up a pretty big can of worms that I don think we want in lots of different spots. So yes, technically I think the department could do that. I think from a legal perspective, but custom and tradition is that if before we change any rates, the administration comes to this committee to ask for permission and approval to do that. Did you want to follow up on that?
That could happen at any time, Mr. We could do that pretty quickly. As the director said, they could implement it very quickly. So it is something that can happen quickly, but we would want to consult with this committee.
Senator Kirtmer.
Yes. So we've noticed that sometimes things get decreased without us knowing about it. So that's why I'm sure the question, because I was thinking the same thing. But I don't know that fixing this rate actually helps. I mean, increasing it by seven bucks maybe gets them paid for an additional, I don't know, 20 miles, given what gas is and how much and what they get per mileage on their vehicle. Who knows? Maybe it's 30 miles. I don't know. But I would rather have us look at something with regard to a resolution on the long distance. And that's why I was asking the information. I was asking about how many trips do we really truly have that are over the seven to eight miles? And is there a graduated mileage reimbursement based on the number of miles that they're traveling? Because we can do that, and that's not discriminatory. That's actually looking at the cost of providing the service. I know people have looked at that in other situations with regard to the fee that they charge for ambulance services. So maybe there needs to be some type of longer distance fee. Maybe, again, it's a tiered fee. Maybe if you're over 40 miles, you're going to get this. If you're over 100 miles, you get this. I don't know. But I think that's where we need to get to because that's the issue. I mean, I don't know that I, I mean, I think maybe I agree with what Senator Mobley was saying. What we came up with, the 12 bucks, is probably working in most areas. It just doesn't work on those long distance where there's the deadhead miles. If they drive 150 miles and they don't get paid for it, they're not going to keep doing it. I mean it just like maternal health care If they don get paid adequate amount we end up with 25 counties with no maternal health care So that what we trying to avoid here is we trying to avoid not having non-emergent medical transport for people who live in rural Colorado simply because they live so far away. That's where I think the resolve is and what we should be looking at.
So what I hear from the majority of the committee is that I don't think that there is appetite to change the rate today, but just waiting and seeing is not an approach that we feel comfortable with either. So I think what I am hearing is that we would appreciate more proactive outreach with these other providers as well as deeper analysis to really feel like WE HAVE A DEEP UNDERSTANDING OF HOW THINGS ARE WORKING BOTH IN OUR URBAN AREAS AND IN OUR RURAL AREAS TO ENSURE THAT IF WE HAVE THE SAME RATE THAT THAT'S ACTUALLY CORRECT OR IF WE NEED TO TAKE A DIFFERENT APPROACH HERE TO ENSURE A PROVIDER NETWORK THAT WILL SERVE OUR CONSTITUENTS. SO I THINK THAT MEANS WE DO NOT NEED TO COME BACK LATER THIS AFTERNOON BUT WE WILL LOOK forward to frequent updates from the department on how things are looking and what steps you are taking all right so the joint budget committee will stand in recess Thank you. Thank you.