Colorado Governor, Attorney General Intervene in Medicaid HMO Dispute

Colorado Gov. Bill Owens (R) and state Attorney General Ken Salazar (D) intervened on Nov. 9 in an "ongoing dispute" between state health department officials and Rocky Mountain HMO over Medicaid reimbursement rates, the Denver Post reports. About 24,000 low-income Coloradans are members of Rocky Mountain's Medicaid HMO. In late October, Rocky Mountain CEO Mike Weber asked a federal judge to determine whether Medicaid reimbursement rates the state Department of Health Care Policy and Financing proposed for fiscal year 2001 are legal. Weber maintains that the rates are between $3 million and $6 million are "too low." But health department Director Jim Rizzuto said that the rates are "fair and accurate." Last month, Rizzuto informed the HMO that the state would not renew its Medicaid contract because of "profound and difficult differences" in how much each side believed the state should reimburse the HMO. The federal judge postponed the court's decision in the matter until Nov. 27 "to give the state attorneys and Rocky Mountain a chance to reach an out-of-court agreement." Now the governor and attorney general have asked former U.S. Attorney Mike Norton and Chief Deputy Attorney Christine Arguello to assist the state in avoiding a "federal court showdown with Rocky Mountain HMO." Ken Lane, spokesperson for the attorney general's office, said, "We have an important interest in having this matter settled." This is not the first time the state and HMO have disagreed over reimbursement rates. In 1999, Rocky Mountain filed a lawsuit against the state alleging that health department officials "knowingly withheld" millions in back payments from the HMO. In May, a District Court judge awarded Rocky Mountain $18 million, a decision that the state has appealed. Weber said this week that he hopes to reach an agreement with the state by Nov. 21 (Austin, Denver Post, 11/10).