HRRMC Board Addresses Medicaid Funding Cuts and Financial Policy Updates Amid OBBBA Impact
The Heart of the Rockies Regional Medical Center (HRRMC) Board of Directors approved key financial governance updates and discussed the implications of the One Big Beautiful Bill Act (OBBBA) on the hospital's Medicaid revenue stream. The board authorized the new Vice President of Finance to sign financial documents, reflecting administrative transitions. A Colorado Open Records Act (CORA) policy was also adopted to formalize public records access, incorporating specific provisions for requests impacted by HIPAA regulations.
The OBBBA, a significant federal legislative change, is projected to reduce Medicaid funding by $1 trillion over the next decade, with an estimated 11.8 million individuals potentially losing coverage. HRRMC’s CFO presented detailed projections highlighting reduced Medicaid eligibility duration, introduction of work requirements, and shorter retroactive eligibility periods, all contributing to financial strain. Beginning in FY 2028, federal reductions will incrementally decrease funding, impacting state programs.
Colorado has already initiated adjustments by increasing the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) fee to operationalize these federal reductions. Additionally, changes in Federal Medical Assistance Percentage (FMAP) funding and new cost-sharing requirements for Medicaid expansion enrollees are expected to alter payer/provider dynamics. The act’s impact on Affordable Care Act (ACA) exchange premium tax credits was also noted.
The presentation underscored a potential positive development in the Rural Health Transformation program, which allocates $50 billion over five years to states for rural hospital stabilization. However, specifics of Colorado’s utilization remain pending. Financial modeling anticipates approximately $4.5 million in annual losses for HRRMC starting 2027, yet operating income is projected to remain positive, supported by robust cash flows and reduced long-term debt.
Board leadership emphasized cautious adjustment to capital spending amid funding uncertainties, while recognizing ongoing political efforts to mitigate Medicaid cuts. The newly approved CORA policy includes provisions for fee assessments on records requests, balancing transparency with HIPAA compliance. This multifaceted update reflects broader regulatory and financial challenges confronting rural hospitals navigating federal policy shifts and state-level implementation.