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UCHealth is suing Colorado’s state agency Medicaid over classification
UCHealth on Friday sued the agency that oversees Medicaid in Colorado, saying it mislabeled two of the health network’s hospitals, costing it its fair share of reimbursement to compensate for uncompensated care.
The lawsuit, filed in Denver District Court, alleges that the Colorado Department of Health Care Policy and Financing mislabeled two UCHealth facilities as state-owned, rather than private, nonprofit hospitals.
UCHealth said the alleged misclassification reduced the amount Memorial Hospital in Colorado Springs and Poudre Valley Hospital in Fort Collins received from the government. costs for affordability and sustainability of healthcare.
Neither the lawsuit nor a UCHealth spokesperson said how much money the health care system believes it is owed.
The state collects reimbursements from most hospitals and uses them to withdraw matching federal funds. It then distributes the money raised and matching funds based on a formula to offset the costs of uncompensated care and quality improvement efforts.
It was not clear why the state classified the two hospitals as state-owned or when that happened. The Department of Healthcare Policy and Financing said Friday that its officials were reviewing the lawsuit and could not yet comment.
While the two hospitals lease their buildings from local governments, they receive no funding from them, and the private entity UCHealth manages them, said Dan Weaver, a spokesman for the health care system. The department declined to change the hospitals’ classifications after UCHealth pointed out in December that they were not in compliance with federal rules on what counts as a public hospital, he said.
If UCHealth wins and increases the share going to two of its hospitals, the shares of some other hospitals would fall. A broader ruling that caused the department to change the way it classifies hospitals could create even more winners and losers.
“As the largest provider of Medicaid services in the state, UCHealth and our hospitals are committed to serving low-income residents in our state and those who may live in a rural area. HCPF’s misclassification of our hospitals puts Medicaid patients at risk by potentially depriving them of the resources necessary for their care,” he said in a statement.
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