Hospital fees that have generated billions of dollars in Colorado are legal and do not violate Colorado’s Taxpayers Bill of Rights, according to a Denver District Court ruling.
The ruling is in favor of the health care policy department and the Colorado Department of the Treasury.
In 2015, the TABOR Foundation filed a lawsuit challenging the constitutionality of the fees. The hospital provider fee is a charge imposed on hospital stays that other states refer to as a “bed tax.”
The ruling states that Sen. Bill 17-267, which created the sustainability fee, “does not violate the single subject requirement of … the Colorado Constitution,” the release said. The court denied the plaintiff’s motion for summary judgment “in its entirety.”
The fees, a Colorado Medicaid funding mechanism, have generated more than $4.6 billion over the past decade, the release said.
“With this ruling, Medicaid is able to pay higher reimbursements to hospitals, which is especially important to rural hospitals,” said Kim Bimestefer, executive director for the HCPF.
The ruling will help hospitals to “take care of people who need it most,” Bimestefer said in the release.
Plaintiffs in the lawsuit are considering possible next steps after Wednesday’s ruling.
The original Hospital Provider Fee program enacted by the Colorado legislature in 2009, is matched by federal dollars and the money, more than $500 million annually, is redistributed to Colorado hospitals to pay for uncompensated care among other uses.
The fees, state officials said, have also been used to bring Colorado’s uninsured rate down to historically low levels, under seven percent.