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The exterior of the University of Colorado Hospital on the Anschutz Medical Campus in Aurora, photographed on Oct. 18, 2019. The hospital is the flagship of the UCHealth system. (John Ingold, The Colorado Sun)

Executives at Colorado’s largest hospital systems on Thursday sent a blistering letter to Gov. Jared Polis and the leaders of the state Medicaid agency, saying they fear the state has “lost its focus on uninsured and Medicaid patients.”

The executives accused the state Department of Health Care Policy and Financing, which administers Medicaid in Colorado, of creating cumbersome pre-approval processes and delays for Medicaid patients to receive care, of antiquated records-management practices, of denying patients needed care and of shorting hospitals more than $30 million on drug costs.

They also said new Colorado Medicaid policies have made it more difficult for patients to remain enrolled in the program.

“Overall, it has become increasingly difficult to continue to protect Medicaid patients from the challenges imposed by HCPF,” the executives wrote in their letter. “The actions, and inaction, by HCPF is directly putting the health, safety and security of patients at risk.”

The department will review the letter thoroughly and work with the hospitals to address their concerns, HCPF spokesman Marc Williams said.

“Colorado’s hospitals are important partners in the department’s quest to serve our members,” Williams wrote in a statement. “When they voice a need, we take their views seriously and respond accordingly.”

Williams, though, did dispute one part of the hospitals’ letter, which argued that a decline in Medicaid enrollment in the state is a result of obstacles HCPF has created for patients. Williams said the state’s strong economy is the cause of the enrollment drop.

“We celebrate the fact that Coloradans are rising out of poverty, which we believe is the major contributor to the reduction in Medicaid enrollment,” he wrote.

The logo for the Colorado Department of Health Care Policy and Financing, which administers Medicaid in the state, is seen on a sign in the department’s offices on Feb. 26, 2019. (John Ingold, The Colorado Sun)

The letter is part of a boiling — and now years-long — feud between Colorado hospitals and state officials, particularly those at HCPF, who have been increasingly critical in public of hospitals’ business practices.

Kim Bimestefer (Handout)

Much of the fight concerns hospital costs, which HCPF executive director Kim Bimestefer, a former insurance executive, and other state officials are trying to push lower. The state, for instance, last year produced a scathing report accusing Colorado hospitals of foisting an extra $11 billion in health care costs on privately insured patients over nearly a decade because hospitals had not kept their administrative costs or profit margins in check. When the report came up for review by a state Medicaid board, representatives from the hospital industry who sit on the board blocked its approval.

In presentations around the state, HCPF officials have made frequent use of a report showing Colorado hospitals typically charge privately insured patients much more for services than what Medicare would pay for those services, or another that showed Denver-area hospitals earning more than $2 billion in profits last year.

And Bimestefer and state Insurance Commissioner Michael Conway just this month unveiled their final proposal for a public health insurance option, a plan in which they hope to cap what hospitals can charge.

Hospitals, meanwhile, have been battling HCPF officials over Medicaid payment issues and other concerns. The Colorado Hospital Association sent its own letter to HCPF earlier this year, and Thursday’s letter was signed by the leaders of the state’s five largest hospital systems — Centura, UCHealth, HealthONE, SCL Health and Banner Health. The leaders of Middle Park Medical Center, Colorado Plains Medical Center and Estes Park Health also signed the letter.

Dan Weaver, a spokesman for UCHealth, said the letter’s timing — coming so soon after the state’s release of its public insurance option proposal — was coincidental, and he said the letter is not in response to the state’s efforts to reduce hospital costs.

“We’ve been working on these issues and talking to the state for years now,” he said.

But he did say that inefficiency in the Medicaid system has driven up costs at Colorado hospitals. For instance, he said the state requires hospitals to provide patient records by fax, instead of sending them electronically.

“We have hired multiple people whose job it is just to print out papers from a patient’s electronic medical records and just to fax them over to the state Medicaid office,” Weaver said. “And then resubmit them 30 days later.”

The letter asks state officials to address hospitals’ concerns within 90 days, though it does not say what hospitals might do if that deadline is not met.

John Ingold is a co-founder of The Colorado Sun and a reporter currently specializing in health care coverage. Born and raised in Colorado Springs, John spent 18 years working at The Denver Post. Prior to that, he held internships at...