Report: Higher Medicaid Rate Needed to Address Private Duty Nursing Shortage in Colorado

Families face waitlists, extended hospital stays, as result of low state reimbursement rate for nurses 

Denver, Colo. – An analysis conducted on behalf of the Home Care and Hospice Association of Colorado (HHAC) found Colorado falls short in the supply of private duty nurses to support its Medicaid enrollees as a result of the state’s low PDN Medicaid reimbursement rates.

PDN serves vulnerable Coloradans, allowing Medicaid beneficiaries – many of whom have complex health conditions – to receive health support in the home, rather than with long-term hospitalization. According to a separate 2023 study included in the report, 36% of households nationwide with a medically complex family member have experienced a longer-than-necessary hospital stay because home-based nursing support was not available.

“This is not a new issue for Colorado, but it’s eye opening to see the data that shows exactly how far behind Colorado has fallen,” said Don Knox, executive director of the Home Care and Hospice Association of Colorado. “This funding crisis has real-life impacts for Colorado families. This simply has to be addressed, now, before Colorado falls any further behind.”

According to the analysis, conducted by the Menges Group, Colorado has the 17th-lowest payment rate for RN services and the 11th-lowest payment for LPN services when compared with Medicaid PDN payment rates in all 50 states and the District of Columbia. Both rates are below the median across all states – Colorado’s Medicaid RN payment rate is $7.05 below the median and its LPN rate is $9.04 below the median. 

The analysis said Colorado needs a Medicaid rate increase of 37.8% for registered nurses (RNs) and 52.1% for licensed practical nurses (LPNs) to attract new private duty nursing capacity. This would result in a payment rate of $72.50 for RN services and $60.38 for LPN services. Payment rates cover not only RN and LPN salaries, but also administrative and equipment costs. 

If authorized by the Colorado Legislature, the higher rate could attract enough RNs and LPNs to serve an additional 122 Colorado Medicaid enrollees at home who would otherwise be hospitalized, according to the Menges Group. 

According to the Menges Group, the cost of providing in-home PDN care is $1,351 less per day than when that care is provided in a hospital. That cost savings is expected to offset 71% of the costs associated with the recommended PDN rate increases as more patients could be discharged from the hospital with increased access to home-based nursing support. 

“As a state, we now have a blueprint for how to get patients – in many cases children with medically complex conditions – discharged from more costly inpatient settings and back home with their families,” said Victoria Stewart, area vice president of operations for Aveanna Healthcare. “Not only from a quality of life perspective, but also from a cost-savings perspective, we believe this is an investment that makes sense for Colorado.”

The Home Care and Hospice Association of Colorado (HHAC) is a nonprofit representing home health, home care and hospice agencies statewide caring for tens of thousands of Coloradans, including elderly, disabled and blind individuals. Founded in 1970, the association is comprised of agencies of all sizes that provide a wide range of home-based services. They serve Coloradans in all 64 counties.