Colorado Hospital Tax to Expand Medicare, Raise Hospital Pay

Tags: Colorado | Colorado Indigent Care | hospital tax | Medicare | payments

Colorado's recently passed tax on hospital inpatient and outpatient services is expected to raise $1.2 billion by fiscal year 2013, when it is fully implemented, as well as expand Medicare eligibility to 100,000 new patients and raise hospital payments through the state Medicaid and Colorado Indigent Care Program, according to a report in American Medical News.

The hospital tax will bring in an expected $600 million, bringing in an additional $600 million in federal matching funds, according to the report. The tax, which was approved by the Centers for Medicare & Medicaid Services in April 2010, will apply retroactively to July 1, 2009.

The tax will also reduce hospitals' need to cost shift to account for uncompensated care, as Medicaid hospital pay will increase to 100 percent of Medicare, as opposed to 90 percent, according to the report. The Colorado Indigent Care Program will also pay hospitals at 100 percent of costs, up from 72 percent it currently pays.

The tax was supported by both the Colorado Hospital Association and the Colorado Medical Society.

Read the AMNews report on the Colorado hospital tax.

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