COLORADO SPRINGS, Colo. — US Sen. John Hickenlooper supports a strategy to reverse a Pentagon rule change that reduced TRICARE reimbursement to pediatric and cancer hospitals.
Children's Hospital Colorado estimates the change will cost them $17 million in revenue this year. The hospital is preparing to cut services in response.
"I don't think this was an intended consequence, it's a classic case of the federal government operating in a vacuum," Hickenlooper said when asked about the issued during a visit to Colorado Springs on Thursday.
"If suddenly we're going to pull the rug out from under the hospitals and institutions that are providing that care, what kind of people are we?"
Hospital leaders met with stakeholders on April 3 at Mount Carmel Veterans Service Center to explain the problem.
TRICARE is the government health plan for active duty members of the military and their families. It's administered by the Defense Health Agency (DHA.) The DHA rule change passed in October and restructured TRICARE reimbursement amounts in a manner similar to Medicare.
The rule will save the Pentagon roughly $35 million annually. However, most of that cost reduction is coming at the expense of the Colorado Springs and Aurora hospitals, President of the Children's Hospital Colorado for Southern Colorado Greg Raymond said.
Roughly 1 in 5 patients at the Colorado Springs hospital pay with TRICARE given the large military population here.
"We are not able to absorb a $17 million loss," Raymond said. "Consequently, we are in the process of evaluating what that means for the clinical services we provide for kids locally, and this is all kids. Not just TRICARE kids, but all kids in our community."
The hospital has not yet identified which services would be cut. Raymond said administrators want to limit the impact on local families. However, he anticipates many patients who receive specialized care in Colorado Springs will likely have to seek treatment in Aurora or fly out of state.
Children's sued the Pentagon claiming DHA failed to follow federal administrative procedures and ignored its own history in pushing for the rule change.
The military responded by saying they followed procedure and that the rule change was lawful. The judge overseeing the case ruled in favor of the military.
During the April 3 meeting, a representative from Congressman Doug Lamborn's office said they plan to fix the issue when the military's budget comes up for renewal later this year. Hickenlooper agreed that the National Defense Authorization Act (NDAA) is the best way to resolve the problem.
"We're 100 percent focused on trying to figure out how to either get more money into the the NDAA, or get this, get this rule-making crossed off," he said.