Letter From Our CEO: CHASE Fee Update, Federal Policy Changes, and MRH Financial Health

Our thoughts are with the surrounding communities as wildfires impact our friends, neighbors, and loved ones. We continue to work closely with fellow community leaders to respond to evolving needs, and our hospital doors remain open to provide care or resources as needed. We are grateful for the courage and dedication of the first responders working tirelessly to keep our community safe, and we send them our strength and support.

Dear Community Members,

Over the past five years, MRH has significantly improved its financial health. Through disciplined financial management, revenue cycle improvements, and strategic investments in our workforce and services, we ended last year with a positive operating margin. These gains allow us to reinvest in patient care, technology, and facility upgrades while preparing for the future.

Many of you may have seen recent news about state and local policy changes that have the potential to impact Memorial Regional Health, and I want to share with you what MRH is doing to ensure this community retains access to healthcare.

State Issue: CHASE Fee Court Ruling

A recent court decision involving UCHealth and the Colorado Department of Healthcare Policy and Finance (HCPF) changed how two UCHealth hospitals are classified for the CHASE Fee, a fee that all hospitals pay to the State in order to leverage federal matching funds. Part of this state and federal money is redistributed back to hospitals, with a focus on rural hospitals.

The court ruled UCHealth overpaid $59.7 million, which may require a redistribution of funding. MRH could be impacted by more than $2 million, a heavy burden that could push some small hospitals toward closure. MRH and other rural hospital leaders oppose repayment without further legal review, and meetings are underway with the Colorado Hospital Association, UCHealth, and HCPF to find a solution.

Federal Issue: HR 1 – The One Big Beautiful Bill Act (OBBBA)

HR 1 contains provisions that could significantly impact Colorado hospitals:

  • Hospital provider tax reduction: In Colorado, this is the CHASE Fee. The bill reduces the provider tax by 0.5% per year for five years beginning in 2027, lowering the cap from 6% to 3.5%. MRH currently receives $6.4 million annually from these funds to offset Medicaid shortfalls. The reduction in the provider tax may result in a reduction of over $10 billion in federal dollars over five years.
  • Medicaid enrollment changes: As many as 150,000 Coloradans could lose coverage, increasing uncompensated care as patients still need treatment even when uninsured.

What MRH is Doing

  • Advocacy and collaboration: We are working closely with the Colorado Hospital Association, our state and federal legislators, and other healthcare leaders to push for solutions that protect rural hospitals.
  • Strategic planning: We recently completed a three-year strategic plan focused on workforce, community health, and financial sustainability. This plan positions us to navigate industry changes, including those from HR 1 and the CHASE Fee ruling.
  • Commitment to patients: Regardless of these challenges, our priority remains providing high-quality, compassionate care to our community, now and in the future.

We will continue to stay engaged and share updates as they develop.

Jennifer Riley, MHA, FACHE
Chief Executive Officer

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