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State officials propose small early‑intervention cuts, vow more analysis amid provider pushback
Summary
CDEC proposed narrowly targeted administrative savings and changes to provider payments that together would save roughly $1 million in FY 2026, but providers and some legislators warned the measures risk squeezing an already stressed workforce.
The Department of Early Childhood (CDEC) recommended four modest cost‑containment measures for Colorado’s Early Intervention (Part C) program and said it will continue community engagement and analysis before proposing larger changes in December.
What was proposed: Program leadership told the Joint Budget Committee they reviewed 12 potential strategies and — based on provider and parent input — prioritized changes that would produce savings while minimizing immediate harm to children’s services. For fiscal year 2026 the department recommended: (1) internal administrative reductions including holding vacancies and pausing some system enhancement work; (2) ending an existing payment providers receive when families cancel within 24 hours or fail to show; (3) discontinuing mileage and travel reimbursement for subcontracted providers (15% of providers bill mileage today); and (4) discontinuing a $250 training/stay stipend for providers. The department estimated those measures would save about $953,000 in FY 2026 and about $1.6 million in FY 2027.
Context and reaction: CDEC staff emphasized they ruled out more disruptive options that would directly cut children’s services. Kendra Dunn (CDEC deputy director) and Jeanne Stefanik (CDEC CFO) said the department will start implementing administrative cuts July 1 but would phase provider rules in January 2026 so they can mitigate impacts in rural and mountain regions. Committee members and provider representatives warned the recommended measures would reduce provider income and could worsen recruitment and retention at a time when many programs are already short‑staffed. Senator Kirkmeyer and others pressed for clearer data on how many children rely on Medicaid versus private insurance, how much Medicaid draws down federal match for the program, and the split of contractor‑employed versus subcontracted direct services.
Department process and follow‑up: Department staff described extensive outreach — 18 listening sessions with planning groups, breakout sessions and a public survey — and have posted responses and a request‑for‑information summary with hundreds of comments. CDEC said it will continue to explore three structural options for a future change package: (a) improved Medicaid billing through the Early Intervention Services Trust; (b) requiring providers to be in‑network with private insurers that operate in the Colorado market; and (c) redesigning intake/referral routing to reduce duplication and administrative costs. The department promised further public sessions and a second report with additional recommendations in December.
Budget context: Early Intervention is funded by a mix of state general fund, federal Part C IDEA dollars and Medicaid reimbursements. CDEC reported approximately 19,459 unduplicated children served in 2024–25 (year‑to‑date in the presentation) and estimated per‑child costs near $4,568 in the most recent model. Jeanne Stefanik said invoicing lags and seasonality complicate month‑to‑month projections; staff estimated year‑end spending near appropriation for 2024–25 and that the 2025–26 appropriation can cover currently projected caseloads.
Ending: Committee members asked CDEC for additional detail on provider costs, the share of services billed to Medicaid and to the Early Intervention Services Trust, and for further analysis of how proposed changes would affect rural providers and children. CDEC will continue engagement and present further recommendations in December.
