Officials from major Colorado hospitals said proposed federal funding cuts could force them to close.
The rule, set to take effect in September, would strip about $120 million, officials said. It would especially hurt hospitals that provide care for uninsured and poor patients, the report said.
The proposal would cut millions of dollars in federal funding to Denver Health Medical Center and the University of Colorado Hospital.
Peg Burnett of Denver Health Medical Center said she doesn't see how it could stay open with what would be a 13 percent cut in funding.
A federal spokesman said the new rule is not designed to deny Medicaid money to hospitals that serve the poor and uninsured, but Sean Kevelighan said hospitals might not be in the right category for such funding.
Under the proposal, Denver Health and the University of Colorado Hospital wouldn't qualify as a public hospital. The proposal redefines a public or government hospital.
"Because of the specifics of the rule and our legal status we do not qualify, or would not qualify as a government hospital should these rules take effect," said said Jeff Thompson, director of government and corporate relations at University Hospital.
In February, dozens of U.S. senators including Elizabeth Dole, Hillary Clinton and Ken Salazar signed a letter to Congress stating they strongly opposed the Medicaid cuts.
"The recently proposed cuts to the Medicaid program will have a severe impact on more than 57 million Americans who rely on the program for their health care," the letter stated. "It will also tie the hands of the individuals and organizations that serve them."
The letter states that the Centers for Medicare and Medicaid Services said the estimated cuts could reach $3.87 billion over five years.
Under the proposal, Denver Health stands to lose $75 million, while University Hospital could lose $35 million.
"It would be devastating. If we could stay in business, it would be bare bones," Burnett said.
"That kind of money can make a huge difference in whether or not we can continue to do the things we've done for the last several years in providing care for the medically underserved in this state," Thompson said. "We have the potential of literally having to shut off our care for the medically indigent."
Thompson added, "It would mean people who have chronic or long-term illness -- (like) cancer -- would suffer. They simply would not have any outlet for care."
At the state level, Colorado hospitals and state agencies will go before the state Joint Budget Committee Monday to discuss how the rule change could shut them down.
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