HB 26-1377

HB 26-1377 is a Colorado bill that changes how state funding for mental health transitional living homes is counted under budget laws. Currently, when managed care entities (MCEs) receive money from the Department of Health Care Policy and Financing to pay for services at these homes, this transaction is considered as money leaving and then re-entering the state, affecting budget calculations. The bill proposes that if MCEs pass on federal or state funds directly to the Department of Human Services for these homes, it shouldn’t be counted twice in the state’s budget limits. This change affects how much funding can be allocated without needing voter approval under Colorado's Taxpayer Bill of Rights (TABOR). Since the bill has been signed, this new rule is now in effect and impacts the budgeting process for mental health services funded through Medicaid.

Official Summary

Joint Budget Committee. The department of human services (CDHS) operates mental health transitional living homes (transitional homes). Part of the funding for transitional homes comes from patient revenues, including Medicaid-eligible patient revenues. For Medicaid-eligible patients, the patient revenues originate in the department of health care policy and financing (HCPF), HCPF distributes this money to managed care entities (MCEs), and the MCEs then pay CDHS for the services provided at the transitional homes. At least in part, the MCEs serve as passthroughs transferring patient revenues from HCPF to CDHS for transitional homes.     Because MCEs are nonstate entities, the office of the state controller counts the payments from HCPF to MCEs for transitional homes as money leaving the state and then counts the payments from MCEs to CDHS for transitional homes as state fiscal year spending for purposes of section 20 of article X of the state constitution (TABOR).     The bill establishes that, if an MCE receives federal funds or state money from HCPF and pays those funds or that money to CDHS, the funds or money received by CDHS is not included in the calculation of state fiscal year spending for purposes of TABOR.(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

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