Denver District Court Ruling Affirms Hospital Provider Fee Does Not Violate TABOR


March 6, 2019

Media Contact:
Marc Williams

Denver, CO – Today, the Denver District Court ruled that a Colorado Medicaid funding mechanism – which brought in more than $4.6 billion to Colorado – is legal and does not violate Colorado’s Taxpayers Bill of Rights (TABOR). In finding in favor of the Department of Health Care Policy and Financing (the Department) and the Colorado Department of the Treasury, the Court ruled the original Hospital Provider Fee (HPF) and the subsequent Healthcare Affordability and Sustainability Fee (HASF) are “…fees, and not taxes, and therefore are not subject to TABOR.” The ruling goes on to say that Senate Bill 17-267, which created the HASF, “…does not violate the single subject requirement of…the Colorado Constitution.”

The Court ruled that the HPF and HASF Programs do not violate TABOR and denied the plaintiff’s Motion for Summary Judgement “…in its entirety.”

“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 Department. “The second thing it does is continue funding both the Medicaid and CHP+ expansions which helped lower the uninsured rate to 6.5%. Just those two things – lower uninsured rate and increased hospital reimbursements – are powerful drivers of the economy while allowing us to take care of people who need it most.”

“Senate Bill 17-267 was a critical step towards supporting the sustainability of rural Colorado,” said State Treasurer Dave Young. “I am pleased to learn that the court affirmed the legislature’s intent of improving the lives of Coloradans across the state.”

In 2009, the Colorado legislature enacted House Bill 09-1293, which created the HPF Program administered by the Department. Under the HPF Program, the Department collected fees from Colorado hospitals, which were matched by federal dollars and then redistributed to Colorado hospitals. The HPF Program increased payments to hospitals, allowed Colorado to expand coverage to more kids and pregnant women in Child Health Plan Plus (CHP+), funded Medicaid Buy-In programs for kids and for working adults with disabilities, funded continuous eligibility for kids and funded the Medicaid expansion under the Affordable Care Act. These coverage expansions allowed more than 450,000 Coloradans to gain access to health coverage helping reduce Colorado’s uninsured rate to historically low levels.

Legislators enacted Senate Bill 17-267 which created the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) and the HASF, also ending the HPF Program. Because CHASE is an enterprise, revenues from the HASF do not count against TABOR spending limitations or the excess state revenues cap.

About the Colorado Department of Health Care Policy and Financing: The Department administers Health First Colorado (Colorado’s Medicaid Program), Child Health Plan Plus and other programs for Coloradans who qualify. For more information about the Department, please visit