Refinancing medicaid: One state's approach

In recent years, The Colorado Medicaid Program has initiated a number of new and innovative disproportionate share payment plans for hospitals. These initiatives are designed to increase access to hospital care for Colorado citizens, to ensure the future financial viability of key safety net hospitals, and to partially offset the state of Colorado's cost of funding the Medicaid program. Between 1991 and 1994, a net of $174 million in disproportionate share hospital payments was distributed to Colorado hospitals. A combination of hospital donations, voluntary contributions, intergovernmental agency transfers, and provider taxes raised a total of $579 million. The state of Colorado received $128 million through these special refinancing efforts. These payment efforts have had a major financial impact, and despite recent changes in Federal limitations on payments, other states may find a theoretical template for refinancing efforts in the Colorado model.