Why Colorado hospitals just sued the Polis administration over the health care reinsurance program
The association that represents Colorado’s hospitals filed a lawsuit Tuesday against the Polis administration over the state’s new health care reinsurance program — a fresh challenge to a program that has been one of Gov. Jared Polis’ signature achievements but is also facing a clouded budget picture.
The reinsurance program, which is currently planned to run for two years, has helped reduce what some people who buy health coverage on their own pay in insurance premiums and is financed in part by $40 million in new fees on hospitals per year. The Colorado Hospital Association’s lawsuit specifically targets a regulation telling hospitals they have to collectively pay the first year’s installment of $40 million in the first half of this year.
The hospital association argues that the rule was enacted through an “improper and illegal” process that didn’t provide the requisite notice or opportunity for public comment. The lawsuit says collecting the fees in the first half of the year — instead of the second half — will hurt cash-strapped smaller hospitals that have already set their budgets for the 2019-2020 fiscal year.
And the hospital association also takes issue with a provision in the regulation that would allow the state’s Division of Insurance to potentially revoke the license of a hospital that doesn’t pay on time.
“(T)he Division enacted the Emergency Regulation in an improper and unlawful attempt to increase the Division’s jurisdictional and enforcement authority over Colorado hospitals,” the lawsuit argues.
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