Medicaid Sustainability and Colorado's LTSS System

Actions and Fact Sheets   FAQ 

Background / Why Is This Happening   Rule Revisions   Stay Informed 

FY 2026–27 Budget Requests   HCPF Budget Reduction Fact Sheet and Summary 

HCPF Medicaid Sustainability Page 

Colorado’s long-term services and supports (LTSS) system plays a critical role in ensuring that older adults and individuals with disabilities have access to care in the setting of their choice. Over the last several years, the state has invested over $600M to expand access, improve equity, and strengthen the direct care workforce. Investments into the LTSS infrastructure to support a strong workforce and large provider network will help ensure a solid system for years to come.

However, ongoing fiscal constraints—including new federal mandates and limits on state revenue growth—require the Department of Health Care Policy and Financing (HCPF) to reassess and align its policies to ensure long-term sustainability.

Our Commitment 

The Office of Community Living (OCL) remains committed to transparency, accountability, and partnership throughout this process. Sustainability is not a one-time goal but an ongoing responsibility—to the individuals served by the Medicaid program, to the providers who deliver care, and to the taxpayers who fund it.

Summary of Stakeholder Feedback on LTSS Sustainability Changes
 

Thank you to everyone who has submitted their comments and questions to our HCPF Office of Community Living - Governor's Budget Announcement - Stakeholder Comment Form. We have been reviewing all of the submissions and have compiled them into a summary document  reflecting the major themes and concerns we have heard as of November 18, 2025.

Read the Summary of Stakeholder Feedback

 Frequently Asked Questions (FAQ)

LTSS Sustainability Actions and Resources

Addressing LTSS Trends

Through the Governor's Executive Order and FY 2026-27 Budget Requests, HCPF will pursue a number of actions to slow the trend growth within LTSS, focusing on those services and waivers that are key drivers. Included below are the actions announced through the Governor’s August 18, 2025 Executive Order, HCPF FY 2026-27 Budget Requests that impact LTSS programs (R-08, R-15, and R-17), and the newly announced R-06 Executive Order and Other Spending Reductions. 

Eliminate the nursing facility minimum wage supplemental payment

Fact Sheet

Overview

Set in statute to sunset next year, this payment was in place to supplement wages prior to the minimum wage in nursing facilities rising above $15.00/hour. With this change, the department will end the distribution of the funds one year early. Nursing Facility rates will not be impacted by the 1.6% across-the-board (ATB) reduction. Implementation Date: August 28, 2025 - payments will not go out in Spring 2026

Across the Board Provider Rate Reductions (1.6% and 0.75%)

Fact Sheet

Overview

The historic average Across the Board (ATB) increase in provider reimbursements before COVID, and the related introduction of federal stimulus dollars, averaged 0.62% annually. The ATB provider rate increases from FY 2021-22 to FY 2024-25 ranged from 2-3%, or about 3 to 5 times higher than typical, historic annual ATB rate increases. The 1.6% ATB increase was 2.5 times higher than historic averages. HCPF will post the updated rate tables on the Provider Rates and Fee Schedule page prior to July 1, 2026. Implementation Date: October 1, 2025 and  July 1, 2026

Community Connector: Rate Reduction

Fact Sheet

Overview

HCPF is aligning rates based on service scope, training requirements, and comparability to similar services to ensure the sustainability of Colorado’s Medicaid program. (Community Connector has different training requirements than certain licensed services; the rate is being aligned accordingly.) Further details are available in Informational Memo 25-025 Expected Implementation Date: January 1, 2026

Align the Individual Residential Services and Supports rates for host home and family caregiver homes

Fact Sheet

Overview

Individual Residential Services and Supports (IRSS) is a service available exclusively in the Developmental Disabilities (DD) waiver, offering access to 24/7 residential services. IRSS may be provided by rotating shift staff, with a higher rate to account for a higher cost of service provision, or by a primary caregiver who resides with the member, at a lower rate to account for the lower cost of service provision. Currently, some providers, due to conflicting Department guidance, are billing the higher rate when the primary caregiver residing with the member is family, even though the cost to provide the service is lower and therefore should be billed at the lower rate. The Department intends to change rules to clarify that IRSS provided by a family member who is the primary provider and resides with the member must be billed at the lower rate. This change will ensure consistency and equity in how this service is reimbursed. Expected Implementation Date: After Rules are passed, expected in March 2026

Delay Presumptive Eligibility for Long-Term Services and Supports

Fact Sheet

Overview

HCPF will delay the implementation of the LTSS Presumptive Eligibility program, which would have allowed individuals who appear eligible for LTSS to begin receiving a limited number of community-based services while their full Medicaid eligibility determination is pending. Our federal partners have signaled that they will need an additional year to review our proposal; therefore, the Department is leveraging the delay to revert savings. This action temporarily postpones program startup and associated expenditures. Given that it has not yet been implemented, there will be no service impacts to members. Expected Implementation Date: Delay starting October 31, 2025; anticipate final implementation of the program in Summer 2027

Auto Enrollment Changes for Certain Youth Transitions in DD Waiver

Fact Sheet

Overview

This reduction ends automatic youth-to-adult Developmental Disabilities (DD) waiver transitions for members aging out of Children’s Extensive Supports (CES) or Children’s Habilitation Residential Program (CHRP). This change to youth transitions does not affect authorizations onto the DD Waiver through Emergency Enrollment, transfers from institutions, or through child welfare services. Expected Implementation Date: Pending federal approval; Summer 2026

Reduce Developmental Disabilities Waiver Churn Enrollment

Fact Sheet

Overview

This reduction will pause churn enrollments in the DD waiver, reducing them by 50%, resulting in members staying on the waitlist and continuing to receive services under their existing waiver until the pause is lifted. This reduction in churn enrollments does not affect authorizations onto the DD Waiver through Emergency Enrollment, transfers from institutions, or child welfare services. Expected Implementation Date: Pending federal approval; Summer 2026

Align Member Cost of Care Contribution in the DD waiver with Other Residential Waiver Services

Fact Sheet

Overview

HCPF will apply Post-Eligibility Treatment of Income (PETI) for Members enrolled in the DD waiver, bringing it into alignment with other HCBS residential waivers, where Members contribute part of their income toward service costs. Aligning the cost sharing requirements in the DD waiver with the income requirements of other HCBS residential waivers will create more equity across residential waivers and contribute to the cost savings needed to sustain Medicaid programs. Expected Implementation Date: Pending federal approval; Summer 2026

Implement a Soft Cap on Certain HCBS Services

Fact Sheet

Overview

HCPF will implement a cap on Personal Care, Homemaker, and Health Maintenance Activities (HMA) that will cap annual utilization at approximately 19,000 units for HMA (about 13 hours per day), 10,000 units for Personal Care (about 6.8 hours per day), and 4,500 units for Homemakers (about 3 hours per day). There will be an exceptions process for individuals who have a demonstrated need for services above the cap. Expected Implementation Date: Pending federal approval; Spring 2026

Implement a Cap on Weekly Caregiving Hours

Fact Sheet	Overview
	This reduction will limit paid caregiving services for a member to a maximum of 56 hours per week (8 hours per day) for a single caregiver. The current 16-hour-per-day cap per caregiver will remain in place. This limit will impact Home Health Aide, Personal Care, Homemaker, HMA, and Nursing services. Expected Implementation Date: Pending federal approval; Spring 2026

Implement a Cap on Weekly Homemaker Hours for Legally Responsible Persons

Fact Sheet

Overview

This will reduce the homemaker service cap for legally responsible persons from 10 to 5 hours per week. Reducing the cap on this service will better align the hours of allowable services with what would be considered outside the typical responsibility of a legally responsible person, better ensuring long-term availability of the option. Expected Implementation Date: Pending federal approval; Spring 2026

Withdrawn - Reduce Movement Therapy Services to Align with Rate Methodology

As reflected in Supplemental/Budget Amendment-07, HCPF is requesting the withdrawal of the proposed rate reduction for Movement Therapy, including Music Therapy. At this time, we do not believe a rate reduction is justified or appropriate given the professional standards and service needs associated with these therapies.
 

Remove Equine Services in Home and Community-Based Services (HCBS)

Fact Sheet	Overview
	HCPF will remove Equine Services from all HCBS waivers due to ongoing system issues delaying implementation. Members may still access services through Physical Therapy (PT), Occupational Therapy (OT), and Speech Therapy (ST) through State Plan and Movement & Expressive Therapies in HCBS waivers. Expected Implementation Date: Pending federal approval; Summer 2026

Align Community Connector Rate with Supported Community Connections

Fact Sheet	Overview
	This action will reduce Community Connector's reimbursement to align with the Tier 3 Supported Community Connections rate—approximately $7.71 per 15-minute unit. HCPF views the rate cut as necessary for Medicaid cost control, sustainability of the benefit, and more equitable alignment with comparable direct care services. Expected Implementation Date: Pending federal approval; Spring 2026

Implement New Service Unit Limitations for Community Connector

Fact Sheet

Overview

HCPF will reduce the annual cap on Community Connector services by 50%, lowering the maximum allowable units from 2,080 to 1,040 per support plan year under the Children’s Extensive Support (CES) and Children’s Habilitation Residential Program (CHRP). This change will reduce Medicaid expenditures associated with excessive utilization while maintaining member access to the service. Expected Implementation Date: Pending federal approval; Spring 2026

New Community Connector Age Restrictions

Fact Sheet	Overview
	HCPF requests in R-17 to remove access to Community Connector services for members who are not school-aged.                                          For children who are not school-aged community engagement is a typical parental responsibility. Expected Implementation Date: Pending federal approval; Spring/Summer 2026

Establish Private Duty Nursing (PDN) 60-Day Acute Benefit

Fact Sheet	Overview
	HCPF requests in R-15 to implement an acute care period for the Private Duty Nursing (PDN) service. In connection with hospital discharges and new admissions to services, PDN may be provided for up to 60 days without a PAR in place. Expected Implementation Date: Pending federal approval; Early 2027

Establish Private Duty Nursing (PDN) Per Diem Rate

Fact Sheet

Overview

HCPF requests in R-15 to update and innovate the Private Duty Nursing (PDN) service by establishing a per-diem blended rate. The hourly unit, as well as the individual and group rates, will remain available for use where appropriate. Per diem rates will be utilized when services are provided 24/7. These rates will be based on a blending of RN and CNA components. Expected Implementation Date: Pending federal approval; Early 2027

Adjust Service Durations per Billable Unit for Long-Term Home Health (LTHH) Services

Fact Sheet

Overview

HCPF requests in R-15 to convert LTHH, including CNA and therapy services to new billing durations to better align with actual utilization. For Long-Term Home Health, the Department requests to convert LTHH - CNA to a 15-minute billing unit and PT, OT, and SLP/ST services to 30-minute billing units to better align payments with the actual duration of services provided. Expected Implementation Date: Pending federal approval; Early 2027

Create Group Rates for certain Community First Choice (CFC) and Long-Term Home Health (LTHH) Services

Fact Sheet	Overview
	HCPF requests in R-15 to establish group rates for the following services and service delivery options: IHSS, Personal Care, and Homemaker within CFC, and CNA within LTHH. This change will allow a single Direct Care Worker (DCW) and/or CNA to serve multiple members of the same household or setting simultaneously. Expected Implementation Date: Pending federal approval; Early 2027

Develop a Standardized Rate Tool for Residential Habilitation Negotiated Rates

Fact Sheet	Overview
	HCPF requests in R-15 to develop and implement a new strategy for services that have negotiated rates for the Developmental Disabilities (DD) residential waiver and the Children’s Habilitation Residential Program (CHRP) waiver. Expected Implementation Date: Spring and Fall 2026

Colorado Single Assessment

Fact Sheet

Overview

The state has developed a single assessment tool, the Colorado Single Assessment (CSA), and a corresponding Person Centered Support Plan (PCSP) for all individuals seeking or receiving long-term services and supports (LTSS). HCPF is requesting in R-08 ongoing funding for the assessment to true up SB 16-192, which provided the Department with funding for only the first year of the CSA. Because the current roll out plan for the CSA and PCSP is gradual over the first year, this request includes a reduction in funds for year one and a request for funds in subsequent years. Expected Implementation Date: FY 2026-27

Current Fiscal Environment

Federal Policy Changes: New federal legislation, H.R.1 (One Big Beautiful Bill Act), significantly alters Medicaid financing, administrative requirements, and eligibility processes, which increases state-level financial obligations.

State Budget Constraints: Medicaid comprises over one-third of Colorado’s state budget. The growth of LTSS expenditures—driven by increasing utilization, demographic shifts, and rising labor costs—has outpaced available revenue. 

As a result, several actions have been taken by HCPF and the Governor’s office: 

• The Governor’s Executive Order issued August 28, 2025, initiated $252 million in budget reductions across state agencies—including approximately $79 million in reductions to HCPF, reflective of the Department’s share of the state budget and its recent cost trends.
  • View HCPF Overview of Budget Cuts Fact Sheet
     
• The Governor’s Executive Order issued October 31, 2025, initiated an additional $537 million in budget reductions to HCPF, most of which will begin this fiscal year to quickly realize savings to address the state’s current and future budget challenges. The original Executive Order was extended on November 30, 2025. 
   
• HCPF has proposed several changes through budget requests in Fiscal Year 2026-27 as cost containment and sustainability measures.

View Colorado Medicaid & LTSS Sustainability Fact Sheet (October 2025)
 

Medicaid Sustainability Framework

HCPF is using a Medicaid Sustainability Framework to focus on trend drivers, maximize federal funds, make targeted benefit and rate adjustments, and pause or unwind unaffordable new items—to avoid draconian cuts.

1. Address Drivers of Trend: Better address all the controllable factors that drive Medicaid cost trends
2. Maximize Federal Funding: Leverage and maximize HCPF’s ability to draw down additional federal dollars
3. Invest in Coloradans: Continue investing in initiatives to drive a Colorado economy and educational system to reduce the demand for Medicaid over the long term as Coloradans rise and thrive
4. Make Reasonable Medicaid Cuts or Adjustments: Identify where programs, benefits, and reimbursements are comparative outliers or designed in such a way that we are seeing - or will experience - higher than intended trends or unintended consequences
5. Reassess New Policies: Consider pausing or adjusting recently passed policies not yet implemented
6. Exercise Caution in Crafting Increases: to the Medicaid program going forward

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Long-Term Services and Supports: Growth Is Outpacing Funding

Overall LTSS costs rose 44% between FY 2020-21 to FY 2023-24 driven by: 49% rate increases, 39% utilization, 11% enrollment. 

• A targeted approach is critical to address the areas that are most significantly driving the trend in LTSS.

Enrollment trends: Significant enrollment growth has been seen across many HCBS waivers, as well as increases in the cost per member per month.

Benefit and utilization trends: The costs for particular services are exploding, impacted by a stark increase in the number of hours being used per member.

Through the Governor's Executive Orders and FY 2026-27 Budget Requests, HCPF will pursue a number of actions to slow the trend growth within LTSS, focusing on those services and waivers that are key drivers.

Included below are the initiatives announced through the Governor’s August 18, 2025 Executive Order, HCPF FY 2026-27 Budget Requests that impact LTSS programs (R-08, R-15, and R-17), and the newly announced R-06 Executive Order and Other Spending Reductions.

The overarching objective of these efforts is to ensure that:

• Individuals continue to receive high-quality care in the most appropriate settings;
• Provider networks remain strong and sustainable;
• Program operations align with national standards and best practices; and
• Public resources are managed responsibly to support long-term system viability. 

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Rule Revisions

To help ensure the long-term sustainability of Colorado’s Medicaid program, as a part of the Governor’s Executive Order D 25 020 dated October 31, 2025, HCPF is implementing several initiatives for Home and Community Based Services (HCBS) Waiver and Community First Choice (CFC) services that require changes to the Code of Colorado Regulation. 

The following initiatives are currently under review with the Centers for Medicare and Medicaid Services (CMS) and are set to be effective in April 2026.

Spring 2026 Initiatives:

• New caps on weekly caregiving hours
• Annual service unit limits for Personal Care, Homemaker, and Health Maintenance Activities (HMA)
• Establishing a new minimum age for Community Connector utilization
• Reducing the annual, maximum limit of allowable units for Community Connector.

To ensure we have state regulations in place to comply with federal approval and Executive Order D 25 020, we need to put these changes through the emergency rulemaking process in February2026. This will give case managers enough time to complete Person-Centered Support Planning for members with an April 1, 2026 certification date or later.

View CFC Community Connector Rule Revision Draft - Updated January 5, 2026

• In this draft rule you will find revisions to 8.520.9, 8.7500, and 8.7600:
  • Clarifying language on the current 16 hour per day caregiver limit for Long-Term Home Health, Private Duty Nursing, Personal Care, Homemaker, and Health Maintenance Activities.
  • Language on the 56 hour per week per member caregiver limit.
  • Provider Agency and Financial Management Services Contractor responsibilities for the caregiver limits.
  • Changes to the following definitions:
  • Legally Responsible Person
  • Age-Appropriate Task Standards for Children (New Definition)
  • Age-Appropriate Task Standards for Adults (New Definition)
  • Parental or Legal Guardian Responsibility (New Definition)
  • Extraordinary Care (Note: There is no change to this definition, it is just moved from the Consumer Directed Attendant Support Services section of rule into general service definitions)
  • A definition for the Community Connector Service and revisions to the service inclusion language.
  • Language on the new unit limitations and an age limit for Community Connector.
  • Revised and reorganized activity exclusions from Community Connector.
  • A change to the Legally Responsible Person Homemaker hours.
  • Language on the service caps for Personal Care, Homemaker, and Health Maintenance Activities, and language for the exception process.
  • The incorporation of the new definitions listed above.

Provide feedback no later than Thursday, January 15, 2026. 

Stay Informed 

OCL will be providing regular updates about the implementation efforts surrounding the newly announced Sustainability Actions. New resources and information will be posted on this site and announced through the OCL Digest Newsletter.

Meetings and Events

• OCL Governor's Budget Announcement Webinar
  November 10, 2025
  • Presentation
  • Webinar Recording
     
• Governor's Budget and LTSS Sustainability Actions Listening Sessions - Due to the personal nature of the information shared by members and family members during these listening sessions, we will not be recording them out of respect for their privacy. 
  November 25, 2025 from 8 to 9 a.m.
  December 2, 2025 from 8 to 9 a.m.
  December 11, 2025 from 11 a.m. to Noon
   

Questions or Comments?

• Stakeholders may submit comments to the OCL - Governor’s Budget Announcement - Stakeholder Comment Form
  • OCL welcomes your comments regarding the Sustainability Actions announced on October 31, 2025. We will take all submitted comments into consideration as the new efforts are implemented over the coming months.
     
  • For transparency, we will post on this site what we are hearing from stakeholders on a regular cadence.

Other Resources

• View the HCPF Medicaid Sustainability webpage for real-time updates, member messaging resources, and policy implementation timelines
• Sign up for the At A Glance Newsletter for ongoing HCPF-wide updates
• Sign up for the OCL Digest Newsletter for LTSS updates and meeting announcements
• View the OCL Stakeholder Engagement Calendar for meeting information

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