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Fact Check: Is the Polis Administration Really Giving Raises to Healthcare Bureaucrats While Cutting Funding for Actual Healthcare Services?

August 3, 2020 / CBS Denver
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According to recent press reports, the Colorado Department of Health Care Policy and Financing (HCPF) gave significant raises to senior officials while those same officials were cutting funding to healthcare providers on the front lines of the COVID-19 pandemic.

CLAIM: HCPF Executive Director Kim Bimestefer handed out significant raises in April and May to senior officials who were already making well above $100,000 per year. According to an investigation by CBS Denver, raises as high as almost 9 percent were handed out while major budget cuts were being planned in healthcare and across the rest of the state government.

FACT:

This is true. CBS Denver investigative reporter Brian Maas found that the raises began two weeks after state budget officials warned a severe recession and a major shortfall in state revenues was coming due to COVID-19:

Kim Bimestefer, executive director of Colorado’s Health Care Policy and Financing agency, handed out pay raises to her executive staff in April and May after it became clear the pandemic would severely impact the state’s budget. …

Bimestefer awarded a 5% pay increase to her human resources director pushing the HR director’s salary to $120,000 per year … [A]warded another of her administrators a nearly 9% raise to $148,000 per year … [A]nother senior executive was given a discretionary raise from $157,000/year to $161,000 annually. Another of Bimestefer’s executives received a 5% increase on April 1 raising her salary from $150,000 to [$158,000] per year.

When CBS Denver asked Bimestefer directly about the raises amid the state’s budget crisis, she defended them, partly because in previous years she had awarded even bigger raises:

They are good decisions, sound decisions and in the best interest of the Coloradans we need to serve.

However, at the very same time these raises were being awarded, Bimestefer’s department – which oversees the state’s Medicaid program – along with officials in the state legislature were preparing funding cuts for hospitals and other healthcare providers. As Kaiser Health News reported after the cuts were approved:

They cut $1 million from a program designed to keep people with mental illness out of the hospital and another million from mental health services for juvenile and adult offenders. Lawmakers reduced funding for substance abuse treatment in county jails by $735,000 and eliminated $5 million earmarked for addiction treatment programs in underserved communities. And that’s all on top of a 1% cut to Medicaid community providers who offer health care to the state’s poorest residents.

At face value, it’s hard to grasp the impact of these cuts, especially the one percent cut in Medicaid reimbursement. But Medicaid already pays hospitals below the cost of treating patients and Colorado health systems are already bracing for billions of dollars in revenue losses due to the impacts of the COVID-19 pandemic. When you combine that trend with an expected surge in Medicaid enrollment due to the recession caused by COVID-19, the result is a major reduction in funding for the front lines of the Colorado healthcare system.

This explains why the HCPF raises discovered by CBS Denver are so newsworthy: If HCPF leaders are awarding themselves pay raises, can the public have confidence that funding cuts to healthcare were really necessary?

And this may be a deeper problem than CBS Denver was able to tackle in a single report. The State Controller’s Office publishes regular payroll and headcount reports for state agencies, including HCPF. Those reports break out the number of employees in the state personnel system and the number of “exempt” employees, which includes political appointees.

In January 2019, there were 9 full-time exempt employees at HCPF with a combined total payroll of $88,772 per month. By March 2020, that number had skyrocketed to 33 employees with a combined total payroll of $212,404 per month.

At the same time, however, the number of employees in the state personnel system – the career-level civil servants who handle the day-to-day operations of HCPF and the state’s Medicaid program – fell from 585 to 570.

At a minimum, these numbers and recent press reports suggest HCPF’s operations and management deserve even closer scrutiny than they have received to date.