UCHealth sued the agency overseeing Medicaid in Colorado on Friday, alleging it mislabeled two of the health network’s hospitals, costing it the fair share of a fee to offset uncompensated care. The lawsuit, filed in Denver District Court, alleges the Colorado Department of Health Care Policy and Financing mislabeled two UCHealth facilities as publicly owned, rather than private nonprofit hospitals. UCHealth said the alleged misclassification had reduced the amount that Memorial Hospital in Colorado Springs and Poudre Valley Hospital in Fort Collins received from the state’s health care affordability and sustainability fee. Neither the lawsuit nor a UCHealth spokesman said how much money the health system believes it is owed. The state collects the fee from most hospitals and uses it to draw down matching federal funds.

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