Monday, September 21, 2026, 11:15 a.m. (Denver time), Parr-Widener Community Room, Room 389
This Budget Hearings meeting of the Denver City Council, chaired by Council Member Watson, featured a presentation from Denver Health on its 2027 budget request and the city's operating agreement. Denver Health CEO Donna Lyn explained that the medically indigent payment has been flat at 30.7 million dollars since 1997, that Denver Health absorbed a 5 million dollar cut in 2026 (largely for Denver Cares), and that federal HR 1 Medicaid changes and a 2% state rate cut will significantly increase uncompensated care. She stated Denver Health cannot continue subsidizing Denver Cares in 2027, which it views as a core service under the operating agreement, and that nearly all of its budget requests were declined. Mayor Johnston provided context on the city's constrained general fund, noting the sheriff's agreement expansion and saying there is no scenario to fund a 22 million dollar increase. Council members questioned the administration and Denver Health staff on HR 1 impacts, the sexual assault nurse examiner request, poison center funding, jail medical funding, and Denver Cares' role in the homelessness service system. No vote was taken; Denver Health committed to circulate a schedule of all city payments.
0:29 That morning and welcome to
0:32 the 2027 budget hearings for
0:34 Denver City Council along with
0:36 a lot and I'm honored to serve
0:36 the administration might there
0:37 as a city council member
0:38 representing all of the fine
0:41 district 9 this morning. We
0:44 have a presentation hearing
0:44 from Denver health. Before we
0:47 roll into presentation, let's
0:48 have introductions around the
0:50 room and we'll start first on
0:51 my right and net chief
0:57 operating Trying to be lucky
0:58 district. 7 Kevin Flynn,
1:00 Southwest Denver's district, 2
1:05 so often bears office or water
1:12 just Denver Unit way Denver,
1:13 Justin House burned Ralph to
1:16 those And so your district,
1:21 700 temperatures Diana Romero,
1:22 district for all to a new
1:22 Campbell, southeast Denver
1:24 chief financial officer. What
1:26 I do a quick check, see
1:27 council members that are
1:27 online. If you don't line on
1:32 introduce yourselves. Good
1:33 afternoon. Paul Kashmann South
1:36 Tendra District Still good
1:41 morning. This And is member
1:49 Torres online. For a second.
1:52 Thank you all being here. Long
1:54 for Denver. Health's about 45
1:57 minutes. Presentation look
1:58 forward to possibly a 20
2:01 minute presentation opening
2:02 for council members to ask
2:03 questions to you for
2:04 Councilmembers will do the
2:06 same as our process has 2
2:08 questions and you can roll
2:09 back into the And with that,
2:11 I'll turn it first the mayor
2:12 for introduction. No, thank
2:14 you so much. And on the team
2:15 from Denver Health report card
2:17 with them on partnership over
2:18 the years. So grateful for the
2:20 service they provide excited
2:23 to about And so the street
2:24 Thanks for being We have 2
2:26 additional council are on
2:29 table. Science to I said in a
2:32 consultant is at large and
2:33 with that, we'll turn over to
2:34 see you all in for your
2:39 presentation. Thank you,
2:40 COUNCILMAN. I'm gonna try to
2:41 get through this and quickly
2:42 as possible so we can get to
2:45 any of your questions. Start
2:47 with the first slide. I'm just
2:48 I'm sorry to do a refresher,
2:51 but I think it's important the
2:53 relationship between the city
2:54 and Denver Health's goes back
2:57 many, many, many years. But as
2:58 you know, in 1997, we entered
3:00 into an operating agreement
3:01 and their 2 components. So
3:04 that operating agreement. But
3:05 we call a medically indigent
3:07 payment, which is 30.7
3:09 million. That's been
3:11 essentially flat since 1997.
3:13 And then what I call a
3:16 purchase of service component,
3:18 which is 48 million dollars of
3:19 annual program expenses for
3:22 some specific services that we
3:24 provide and 2026 for one year.
3:28 Only Denver Health's agreed to
3:29 continue all the services in
3:31 the operating agreement. But
3:32 we reduce the payments from
3:33 the city coming from the city
3:35 by 5 million dollars. And
3:37 there are several components
3:39 to that. The biggest of which
3:42 is the city support Denver
3:43 cares which in 2026 this year
3:47 is 3.2 million due to some
3:48 inflationary increases in
3:54 2027. It will be 3.9 million.
3:55 The total costs of operating
3:56 Denver cares is 12 million
3:59 dollars. So we leverage
4:00 funding from other sources to
4:02 be able to operate. Denver
4:03 cares. Just as a reminder,
4:04 Denver cares which is going to
4:07 be the core of a lot of the
4:11 discussion today. Provide
4:16 services 2, 28,000 MAY 28,000
4:19 visits for about 10,000 unique
4:20 patients. We have a staff of
4:22 the 90 people working at
4:23 Denver cares. 27 of them are
4:26 engaged in counseling. It is
4:28 housing temporarily, but more
4:30 importantly, it is providing
4:31 the connection to the
4:37 community for other services.
4:39 Ok? So again, just as a
4:40 reminder, 30.0, 7 million
4:44 dollars in the am. I
4:46 43 million this current year
4:47 with this with Denver health
4:47 subsidizing 5 million dollars
4:51 of the services. Break down
4:54 even further into these
4:55 purchases. Services contracts
4:57 go into core services of
4:58 18 million of which Denver
5:00 cares is a key component. And
5:04 then on core services
5:05 25 Million. So 5 million cuts
5:09 that we took and this current
5:10 year are highlighted in this
5:14 slide. So anything that's red
5:16 is part of our our subsidy to
5:19 the city for those services.
5:21 We always talk a little bit
5:22 about why do partner with the
5:23 city obviously and what does
5:27 that look like? We want to
5:29 make sure that in particular
5:30 behavioral health services are
5:33 provided for in the city. We
5:35 want to make sure that we have
5:37 a safe and more resilient
5:40 Denver. And we also sustain
5:41 our partnership through what
5:44 we call shared stewardship.
5:45 Alright, underlying all of
5:47 this is, you know, is of
5:48 context in the federal side
5:50 and in the state side that is
5:51 really uncertain and very
5:55 challenging. You've seen the
5:56 slide before. We used to use
5:58 that as a line graph. I
5:58 thought it was important to
6:00 break out both the city
6:04 component and the non city
6:05 components. We receive money
6:06 from our customers. Most of
6:08 pay, but many of whom don't.
6:13 So those patients are
6:15 increasingly costing Denver
6:18 health more money. And in
6:19 2026. Our estimate for the
6:21 services that we're going to
6:22 provide through which we do
6:24 not get any payment as our as
6:28 nearly 156 million dollars.
6:30 I'm going to talk about what
6:31 2027 will look like because
6:33 that's important, as you well
6:37 know, the federal government
6:37 has passed something called hr
6:40 runner the one big beautiful
6:41 bill and that one big
6:43 beautiful bill is anything but
6:45 beautiful when it comes to
6:48 Medicaid. So we are estimating
6:48 first of all, about half of
6:49 our patients at Denver health
6:52 receive Medicaid. And we are
6:54 estimating that about 54,000
6:58 of them will be impacted in
6:59 one way or another either
7:02 through eliminating coverage,
7:05 which will happen beginning in
7:07 2027 and going forward in
7:09 terms of subsequent years in
7:11 terms of their subsidies that
7:14 we get it. Denver, how so
7:16 these are significant. They
7:17 also trickle down to the stage
7:18 just in the past week you
7:21 probably saw the state saying
7:25 that it overspent its 2026
7:28 budget and is estimating
7:30 further deficits in 2027. What
7:31 the state did to us and to
7:32 other health care providers
7:35 for 2020 7. And keep in mind
7:39 the fiscal year is different.
7:41 Then this city's and Denver
7:42 Health's, they operate on a
7:45 JULY one fiscal year, but they
7:47 cut our rates by 2%. So a
7:49 significant cut that we had to
7:52 observe the ultimate impact of
7:53 hr one is going to be people
7:54 losing insurance, getting
7:58 sicker, as you can imagine and
7:59 coming into the e d which is
8:01 not the place that we want to
8:02 be providing services because
8:04 they tend to be more
8:08 expensive. So you've seen this
8:09 chart and the chart that I
8:09 showed to slide to go is
8:10 another way of looking at this
8:13 that broke out clearly that
8:14 the city's uncompensated care
8:18 is in excess of 100 million
8:19 dollars. We do see some
8:22 patients from outside of the
8:24 city, but they significantly
8:27 smaller portion of our
8:29 uncompensated care. This shows
8:31 you, as you've seen before the
8:32 medical indigent payment,
8:34 which has been essentially
8:36 flat. It was 27 million in
8:39 1996. It's grown to
8:40 30 million, 30.7 million. Even
8:43 though our expenses have
8:44 increased by 6 fold that
8:47 additional patients as well
8:48 the cost of health care being
8:54 more expensive. Equity is a
8:55 core foundation of what we do
8:56 at Denver Health. It's part of
9:00 our mission statement and
9:03 Denver cares is a vivid
9:05 example of how the sustainable
9:06 funding that we request from
9:10 the city actually advances
9:13 equity. Denver cares, as I
9:14 said, provides temporary
9:16 housing. But more importantly,
9:18 treatment for patients that
9:21 come into the system and
9:22 ultimately hopefully referred
9:23 to more intensive behavioral
9:24 health and substance use
9:26 services, but also temporary
9:29 housing. Part of But we asked
9:34 for in our budget requests was
9:35 a restatement of the Denver
9:36 cares funding. That is not
9:38 what got. And I will show you
9:41 a chart about that as we go
9:44 forward the City council's
9:45 priorities include
9:46 preservation of many of these
9:49 services, particularly for the
9:51 persons who are living on the
9:53 street and others who have
9:55 mental health and substance
9:57 use services. We have been a
9:58 strong partner with the city,
10:01 whether it's with roads to
10:03 recovery, the Department of
10:04 Public Health and the
10:04 environment and other agencies
10:07 in the city to continue to
10:09 provide stability for housing
10:13 and for services. All right.
10:16 So let me go back to the
10:17 definition, of course,
10:17 services because I think it's
10:18 important as we continue this
10:22 conversation. The language
10:24 that has existed for 30 years
10:26 and are operate nearly 30
10:27 years and our operating
10:30 agreement, I believe, is very
10:31 clear when it comes to core
10:32 services which Denver cares is
10:37 one of them. Section 3.1 says
10:38 this, too, shall not remove a
10:39 car service from the authority
10:40 unless there's been a material
10:42 violation of the authority and
10:43 the standard of care of the
10:46 Corps service. We took the
10:49 bold step last year for this
10:52 current fiscal year to
10:52 continue the services for
10:53 Denver cares and to provide
10:54 the full funding for those
10:56 services. And I said, over
10:59 10,000 people have used those
11:03 services for about 28,000
11:04 individual sits on an average
11:06 day. There's about 60 to 65
11:07 people. Inside of Denver cares
11:11 getting those services. We
11:14 cannot going into fiscal year
11:14 2027 continue to provide that
11:18 service and subsidizing. So
11:20 this was our budget that we
11:24 put forward to the city which
11:27 contains an increase in the
11:27 medically and in indigent
11:28 payments based on inflation,
11:29 which contains other
11:34 inflationary increases. A
11:36 market and married expansion
11:36 for some of the services that
11:40 we provide. This is what we
11:44 received back from the city.
11:44 And while one might
11:45 characterize it as a
11:46 negotiation, I would not
11:48 characterize it is a
11:50 negotiation. We we were
11:51 declined. Any requests that we
11:55 made with the exception of 2
11:58 for $450,000 of the 5 Million.
12:00 That was taken away from
12:04 Denver health in 2026. We also
12:07 in an unprecedented way have
12:08 traditionally gotten merit
12:11 pool's for again, not all of
12:11 Denver House. That is a huge
12:12 enterprise and we figure out
12:17 how to fund merit increases.
12:18 But we were declined. A merit
12:20 increase for the people that
12:20 work under these purchase of
12:27 service agreements. That
12:29 amount of money would have
12:30 been under a million dollars
12:31 to support merit increases and
12:33 faced with this, Denver health
12:35 has no choice. But again, to
12:37 dig into our own pockets to
12:38 provide merit increases to the
12:45 employees. This charge simply
12:47 goes into more detail to show
12:50 you the areas where we
12:51 absorbed the 5 million dollars
12:55 in this current fiscal year.
12:57 Again, Denver cares being the
12:58 majority. 3.2 million. That
12:59 does not include what we
13:00 expect the cost to be in
13:05 fiscal 2027 and several other
13:07 areas that we continue to
13:11 absorb. The city did agree to
13:12 restore the funding for the
13:13 Pena Clinic and the Clinic,
13:14 which you can see at the
13:17 bottom of the page is no
13:18 longer any relevant issue
13:20 because that kind of funding
13:26 support was discontinued. I
13:29 mentioned before the operating
13:30 agreement language, which says
13:31 that the actual cost of
13:31 providing care czar reflected
13:35 a new agreement. We put a
13:37 place holder of a dollar into
13:38 the operating agreement simply
13:41 to continue to enable us to
13:42 boost have the conversations
13:43 around the funding of Denver
13:49 cares. This is what Denver
13:51 cares. Looks like from an
13:52 expense point of view in 2027.
13:55 It will not be. That's 3.2
13:57 million that currently exists.
14:00 But there are some expanded
14:00 services that we need to
14:03 provide a regulations have
14:03 changed that require us to
14:04 provide a higher level of
14:06 service Denver. Cares which in
14:09 the scheme of things is a good
14:11 thing. We will draw down some
14:12 additional reimbursement, but
14:12 we have some additional
14:15 expenses that we we'll have to
14:16 draw down. And I have to draw
14:18 your attention again to the
14:20 top number on this chart,
14:23 which is 12.4 million. That's
14:25 the benefit that the city
14:26 receives. And I'm talking for
14:27 oddly the city, not city
14:28 administration, although you
14:29 could argue that to 7
14:34 operating Denver cares. He's a
14:35 12 million dollar item and the
14:38 city only has to put in 3.2
14:39 million. If it were this
14:41 current year. 3.9 going
14:42 forward. We do a lot of work
14:47 to try down reimbursement from
14:49 Medicaid from other insurance
14:50 in from federal grants. And so
14:51 we cover two-thirds of the
14:52 cost of operating Denver
14:59 cares. I mentioned the course
15:01 or fuss and that is, I think
15:01 fundamental to the
15:02 conversation that we've been
15:05 having with the city that this
15:06 core service needs to continue
15:08 pursuant to the operating
15:10 agreement. I know in a prior
15:13 council hearing you I was
15:15 asked is to q some place where
15:17 we could provide funding for
15:19 this and it cannot be the
15:21 ordinance is very clear. And
15:26 it says as follows. Moneys and
15:27 this fund referring back to
15:29 the 2 q dollars must be used
15:30 in accordance with this
15:32 article. Nothing here and is
15:33 intended to reduce the current
15:36 level of general fund support
15:38 for Denver health based on the
15:45 ability ability of this All
15:48 right. I'm going refresh. And
15:49 then I'm gonna let us some
15:50 questions because I suspect
15:51 there could be some related to
15:55 this presentation that so the
15:57 operating agreement, again,
15:58 30.7 million. We have not
16:01 received any material increase
16:03 in this in 29 years. The