The most significant cuts to the state budget, as contained in the spending reduction plan that Gov. Jared Polis will present to the Joint Budget Committee on Thursday, are for the Department of Health Care Policy and Financing.

That’s a total is more than $79 million out of $103 million in general fund cuts. At least half of the HCPF cuts are to provider rates.

What are provider rates?

It’s what the state pays to those who provide services to Coloradans in health care covered by Medicaid, including medical, dental, children’s and behavioral health.

Providers have claimed for years that the rates don’t come close to covering the costs of those services. 

It hasn’t fallen on deaf ears at the state Capitol: Joint Budget Committee members have worked for several years to increase those rates, including a 1.6% increase in the 2025-26 state budget.

However, this has drawn concerns from Polis, who sought cuts to provider rates in his budget submission for 2025-26 and presented it to budget writers last November. That recommendation was for about $40 million in provider rate cuts, including $19 million for pediatric behavioral health services. 

That followed the actions of the JBC and the legislature in the 2024-25 budget, when the JBC decided to hike provider rates for Medicaid above both the governor’s recommendation and the JBC staff’s recommendation.

Those rates have been so low that it has raised concerns that Medicaid patients may struggle to find the care they need. Last November, Sen. Barbara Kirkmeyer, R-Brighton, the ranking Republican on the JBC, said 25 counties don’t have any maternal healthcare, a statement she repeated during the special session. Community mental health clinics are eliminating services and laying off staff, in part because of insufficient provider rates, she said. 

Kirkmeyer warned during the special session that she believed the governor would go after provider rates with his budget cuts, a concern also shared by other JBC members, including its chair, Sen. Jeff Bridges, D-Greenwood Village. 

A chart showing the impact of those provider rate cuts on pediatric home health services, including for children with autism.

Polis and the Joint Budget Committee will meet at 2 p.m. Thursday to discuss the budget cuts.