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HB 1432

Health-Care Payment Programs

2026 Regular Session

HB 1432 stops and withdraws federal approval for performance-based SMAP reductions under the Hospital Transformation Program, protecting rural hospital payments.

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Bill Summary · HB 1432

Summary of HB 1432 (2026A) – Colorado: Health-Care Payment Programs

Purpose and Intent

  • The bill seeks to halt and roll back the state’s participation in the Hospital Transformation Program (HTP) and related performance-based payment reductions/redistributions affecting hospital Supplemental Medical Assistance Program (SMAP) payments.
  • It directs the Department of Health Care Policy and Financing (HCPF) to withdraw or suspend the state plan amendment (SPA) 24-0043, and any substantially similar federal submissions, that authorize performance-based reductions or redistributions of SMAP payments under the HTP.
  • The overarching goal is to preserve health-care stability and rural access to care in Colorado by preventing retrospective penalties on hospitals that serve Medicaid populations.

Key Provisions and Changes

  1. Legislative Declaration (Section 25.5-4-507(1))

    • States that the HTP places a large share of hospital SMAP payments at risk through redistribution tied to performance benchmarks.
    • Highlights concerns about:
      • Reductions in SMAP occurring after services are provided (financial uncertainty for hospitals).
      • The need for timely, data-driven feedback to improve quality.
      • Perceived deficiencies in the current HCPF implementation of the HTP.
      • The importance of SMAP payments for hospital access to care statewide, including rural areas.
    • Declares it is necessary to prevent retrospective payment reductions to maintain care stability and rural access.

  2. Withdrawal of State Plan Amendment (Section 25.5-4-507(2))

    • HCPF must stop pursuing or obtaining federal approval for SPA 24-0043 or any substantially similar amendment.
    • Must not submit additional materials or revisions to facilitate federal approval.
    • If federal CMS has already approved SPA 24-0043 before withdrawal, Colorado must take action to rescind, amend, or suspend implementation as needed.

  3. Prohibition on Implementation (Section 25.5-4-507(3))

    • Prohibits implementing any reduction, recoupment, or redistribution of SMAP payments under the HTP or any successor quality-improvement program unless expressly authorized by an act of the General Assembly.

  4. Reporting Requirement (Section 25.5-4-507(4))

    • Within 30 days of withdrawing/rescinding/amending/suspending the SPA, HCPF must notify:
      • Colorado House Health and Human Services Committee (and successor)
      • Colorado Senate Health and Human Services Committee (and successor)
      • Joint Budget Committee
    • Notification must include confirmation of withdrawal and any federal review/approval actions.

  5. Rule-Making Prohibition (Section 25.5-4-507(5))

    • The state may not adopt rules implementing the HTP performance-penalty structure (or its successor) unless authorized by a future act of the General Assembly.

  6. Safety Clause

    • Standard provision declaring the act immediately necessary for public health, safety, or appropriations.

Who/What Is Affected

  • State Department: Health Care Policy and Financing (HCPF) is directly constrained in pursuing, approving, or implementing the HTP-related SPA (24-0043) and any similar amendments.
  • Hospitals Receiving SMAP Payments: Hospitals that rely on SMAP payments and potential HTP redistributions would be protected from retrospective reductions under the HTP, unless new authorization is enacted.
  • Medicaid/Health-Care Providers and Rural Communities: The bill targets preserving services and access, particularly in rural and underserved areas that might be affected by payment restructurings.
  • Federal CMS Processes: The bill interacts with any existing or potential federal approvals; it requires withdrawal actions and possible rescission if approvals exist.

Procedural and Timeline Aspects

  • Withdrawal Deadline: HCPF must formally withdraw SPA 24-0043 and similar amendments within 10 business days after the act’s effective date.
  • Reporting Deadline: Within 30 days of withdrawal/amendment/suspension, HCPF must provide written notices to relevant legislative committees and the Joint Budget Committee.
  • Rule-Making Freeze: No new rules implementing HTP penalties or successor programs can be adopted unless expressly authorized by future General Assembly action.
  • Effective Date: The act includes a safety clause; the substantive withdrawal and prohibitions become enforceable upon enactment, with the reporting deadline following shortly after.

Overall Impact

HB 1432 would:
- Stop current and prospective efforts to implement performance-based reductions or redistributions of hospital SMAP payments under the HTP.
- Require formal withdrawal from federal SPA processes and prohibit rule-making unless authorized by the legislature.
- Promote financial stability for hospitals serving Medicaid populations and maintain access to care, especially in rural Colorado.
- Increase legislative oversight by mandating prompt reporting to key committees.

Compiled from official sources — confirm details with the bill’s official record.

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