Colorado sets rate incentives for all-private-room nursing facilities

Colorado has set rate incentives for Class I Medicaid nursing facilities where every room is private. The incentives can first show up in rates on July 1, 2027. The memo says residents' billing protections stay the same.

What's changing

The Colorado Department of Health Care Policy and Financing (HCPF) put out Operational Memo OM 26-068 on October 28, 2026. It took effect August 14, 2026. It builds on a state law, HB 23-1228, and the state Medicaid rules at 10 CCR 2505-10.

For a Class I Medicaid nursing facility where all rooms are private, two things change:

• Administrative and General reasonable price: set at 120% of the statewide median per-day cost. For other facilities it is 110% or 105%.
• Fair Rental Value: the yearly limit per bed in this part of the rate is doubled.

When the incentives start depends on the facility:

• Facilities that already have all private rooms: the incentives go into the July 1, 2027 rates if HCPF has the needed information before March 1, 2027.
• Facilities converting to all private rooms: they qualify for a year's July 1 rates when HCPF gets their information by March 1 of that year.

HCPF says the goal is to encourage resident-centered design, while keeping the billing protections residents already have.

Who it affects (and who it doesn't)

This affects Class I Medicaid nursing facilities that have only private rooms, or are changing to only private rooms.

It does not change billing protections for residents. The memo describes no direct change for residents or families.

Key dates

• August 14, 2026: The memo took effect.
• March 1, 2027: HCPF needs a facility's information by this date for the July 2027 rates.
• July 1, 2027: The incentives can first show up in rates.

What you can do

1. If your family member lives in a nursing facility, this memo describes no direct change for them.
2. If you get a notice about room changes or billing, keep a copy and ask the facility or your case manager how it applies to you.

For questions about nursing facility rates, email Christine Bates at HCPF: christine.bates1@state.co.us.