AVRMC Addresses Hospital Reclassification Ruling, Refutes Misleading Claims of $2.6M Repayment Risk

Description: Arkansas Valley Regional Medical Center Released the Following Statement Regarding their Position on the Hospital Reclassification Ruling and Misleading Reports Regarding Financial Impact on July 7, 2025...

AVRMC Responds to Hospital Reclassification Ruling and Misleading Reports Regarding Financial Impact

LA JUNTA, CO - (July 3, 2025) -Arkansas Valley Regional Medical Center (AVRMC) is aware of recent media reports regarding the Colorado Department of Health Care Policy and Financing (HCPF)'s handling of the reclassification of two UCHealth hospitals-Memorial Hospital and Poudre Valley Hospital-within the CHASE Fee program. Some of these reports have suggested that AVRMC and other rural hospitals may be required to repay significant funds, with estimates as high as $2.6 million.

We feel it is critical to provide clarity to our community and reaffirm our commitment to transparency and advocacy on behalf of rural healthcare providers across Colorado.

Background of the Issue

In 2023, UCHealth identified that two of its hospitals were incorrectly classified as government hospitals under federal law and notified HCPF. HCPF declined to collaborate with UCHealth to resolve the matter administratively, resulting in legal action. A court has now ruled that the hospitals were misclassified and must be reclassified as private institutions.

This reclassification has implications for the CHASE Fee program and, potentially, for how funds are distributed across hospitals statewide. However, HCPF has not provided accurate, detailed data on how this will affect specific hospitals like AVRMC.

What We Know

• No formal notice or data has been given to AVRMC detailing any repayment amount.

HCPF has yet to:

     * Share a global impact analysis;

     * Provide a breakdown of individual hospital liabilities;

     * Disclose the assumptions used in financial modeling.

• Despite rumors, HCPF's own internal document suggests any financial recovery would not occur until June 30, 2026, contradicting statements that it could begin in 30 days.

• Incomplete and inconsistent data was presented to a small group of rural hospitals late last week in a hastily called Zoom meeting.

Our Position

AVRMC, in alignment with the Colorado Hospital Association (CHA), calls on HCPF and the State of Colorado to:

• Follow federal law by properly reclassifying hospitals;

• Take full responsibility for past administrative missteps;

• Use available state and CHASE program reserve funds to eliminate or mitigate losses for rural and safety-net hospitals;

• Increase transparency and work collaboratively with hospitals across the state to ensure accurate financial projections and responsible planning.

AVRMC plays a vital role in providing care to our region. The fear and confusion generated by incomplete or speculative information not only undermines public trust-it threatens the stability of care in rural communities that are already stretched thin.

We remain committed to our patients, staff, and the Arkansas Valley community. We will continue to monitor the situation closely and advocate for a fair and transparent resolution that protects rural healthcare providers.

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