Colorado Bill Changes Nursing Home Penalty Fund Distribution

CO Legislature Bill Search

Published January 1st, 2026

Detected March 13th, 2026

Summary

Colorado Bill HB26-1244 amends the criteria for distributing funds from the nursing home penalty cash fund. The bill shifts distribution priorities to align with CMS guidelines and changes the annual reporting deadline. It also expands the definition of 'benefit residents' to include training and removes restrictions on governmental entities applying for grants.

View original document View source feed page

What changed

Colorado Bill HB26-1244 significantly alters the distribution criteria for the nursing home penalty cash fund, managed by the Department of Public Health and Environment (CDPHE). The bill replaces existing grant distribution criteria with priorities and allowable uses identified by the Centers for Medicare and Medicaid Services (CMS). It also modifies the requirements for grant recommendations to align with CMS grant cycles and priorities, changes the annual report submission deadline from October 1 to January 1, broadens the definition of 'benefit residents' to explicitly include training for nursing facility staff, and removes a restriction that prevented governmental entities from applying for grants unless they were licensed nursing care facilities.

This legislation will require the CDPHE and the nursing home innovations grant board to revise their grant distribution processes to align with federal CMS guidelines. Compliance officers at healthcare providers and government agencies involved in nursing home operations should review the updated criteria and reporting requirements. The change in reporting deadline necessitates adjustments to internal timelines for annual reporting. The expanded eligibility for governmental entities may create new opportunities for state-operated facilities to access these funds. While no specific compliance deadline is mentioned for the distribution changes, the bill's effective date implies these changes will apply to the 2026 session's reporting and grant cycles.

What to do next

Review updated nursing home penalty fund distribution criteria aligned with CMS guidelines.
Adjust internal processes for grant recommendations and reporting to meet the new January 1 deadline.
Evaluate eligibility for grant applications under the revised criteria, particularly for governmental entities.

Source document (simplified)

HB26-1244

Department of Public Health and Environment Nursing Home Penalty Fund

| Type | Bill |
| --- | --- |
| Session | 2026 Regular Session |
| Subjects | Public Health |
Concerning considerations for the department of public health and environment to use as a basis for making distributions from the nursing home penalty cash fund.

Recent Bill (PDF) Recent Fiscal Note (PDF) Bill Summary:

Current law requires the department of public health and environment (CDPHE) to consider certain criteria as a basis for distributing grants from the nursing home penalty cash fund (fund). The bill strikes these criteria and instead requires CDPHE to distribute such grants in accordance with priorities and allowable uses identified by the centers for medicare and medicaid services within the federal department of health and human services (centers).

Current law requires the nursing home innovations grant board (board) to make recommendations for the approval of grants from the fund. The bill requires such recommendations to be consistent with the processes for grant cycles of, and priorities and allowable uses identified by, the centers.

Current law requires CDPHE and the department of health care policy and financing, with the board's assistance, to jointly submit an annual report to the governor and certain legislative committees of reference regarding the expenditure of money in the fund. The bill changes the due date of the report from October 1 to January 1.

In current law, the term "benefit residents of nursing facilities" is defined to mean that a grant has a direct impact on the residents of nursing facilities or has an indirect impact on the residents through education of nursing facility staff. The bill amends this definition to include training, as well as education, of nursing facility staff.

Current law states that a governmental entity may not apply for or receive a grant from the fund unless the entity is a facility that is owned or operated by a governmental agency and licensed as a nursing care facility. The bill removes this restriction.

(Note: This summary applies to this bill as introduced.)