New Payment Tool Helps Colorado Businesses Save Money on Health Care

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Tool compares hospital inpatient payments to identify low-cost providers, reducing health benefit costs for businesses and employees


February 6, 2024

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Marc Williams
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720-626-0801 (Cell)

Denver, CO - Following the release of our statutorily required hospital transparency reports yesterday, the Colorado Department of Health Care Policy & Financing (HCPF) launched its Payment Variation Tool — the first public tool of its kind in the nation — to help employer groups, insurance purchasers and business leaders save money on health insurance. The new tool uses claims data to compare hospital inpatient payments statewide and identify low-cost providers by filtering medical procedure codes. It offers crucial insights into what drives the cost of hospital care, which is the largest component of Coloradans’, employers’ and the state’s health care spend.

“Colorado’s nation-leading efforts, like Reinsurance, the Colorado Option and Prescription Drug Affordability Board, are saving Coloradans money on their health care. Now this tool will build on that important work, lowering costs for employers and businesses, and increasing access to the healthcare Coloradans need,” said Governor Jared Polis.

“The release of our Payment Variation Tool, coupled with many other price transparency efforts, are all part of our focused effort to help save Coloradans and employers money on health,” said HCPF Chief Financial Officer, Bettina Schneider. “The development of these analysis tools and reports create  a suite of complementary research that both supports and evolves this important work.”

HCPF also developed a Good, Fair, and Poor rating system to measure Colorado hospitals’ adherence to federal price transparency rules. This effort follows legislation passed and signed by Governor Polis over the previous two sessions (HB22-1285 and SB23-252). HCPF’s Hospital Price Transparency Posting Evaluation Report includes a scorecard from an evaluation of 101 Colorado hospitals between August and September 2023. The scorecard frames how well hospitals comply with state and federal price transparency rules. These rules are intended to drive more competitive and affordable hospital prices to benefit Coloradans and employers.

“The federal government implemented important regulations to require hospitals to tell the public what they are actually charging their consumers,” said Professor Ge Bai, PhD, CPA, Johns Hopkins Carey Business School and Johns Hopkins Bloomberg School of Public Health. “Colorado is ahead of other states with state legislation and reports like this one that make sure hospitals do just that.”

Overall, 59% of all Colorado hospitals have a “Good” quality rating for how they make their hospital pricing information available. That is about a 33% increase from the price transparency data retrieved in November 2022. HCPF is providing technical assistance to help hospitals rated “Poor” improve their price transparency efforts. HCPF will also use the public posting of hospital prices to populate an upcoming price comparison tool. That additional tool will further assist in identifying outlier prices, while propelling more collaboration with hospitals to lower those outliers and save people money on health care.

“Hospital affordability is critical to employers across the country, as it is a major driver of overall health care premiums, which have become an increasing financial burden on American workers and their families,” said Elizabeth Mitchell, President & CEO, Purchaser Business Group on Health. “Colorado’s hospital transparency reports and their payment variation tool offer employers valuable insights that will help PBGH, insurance carriers, and employers negotiate better hospital prices thereby lowering premiums.”

Visit HCPF’s Hospital Reports Hub to view all of this year’s pricing transparency reports, along with previous HCPF hospital reports and other resources.


About the Colorado Department of Health Care Policy & Financing: The Department administers Health First Colorado (Colorado's Medicaid program), Child Health Plan Plus, and other programs for Coloradans who qualify. These health care programs now cover about one in four Coloradans. For more information about the Department, please visit