A 53-year-old alliance between Denver Public Schools and Kaiser Permanente Colorado may be coming to an end, a split that has pitted two of the metro area’s largest employers against each other, left one district administrator on leave and, if realized, would force thousands of educators and their families to switch doctors in a matter of months.
The potential breakup comes as leaders of Colorado’s largest K-12 district have asked the Board of Education to approve a plan to remove Kaiser Permanente as a provider available to employees who purchase health insurance via DPS and instead require staff to get coverage from either MotivHealth Insurance Company or UnitedHealthcare.
The seven-member board is scheduled to vote on the plan next week, but directors could decide during the Feb.19 meeting to extend DPS’s current health insurance contracts — including with Kaiser, MotivHealth and UnitedHealthcare — for a year and restart the bidding process. That proposal was added after the teachers union raised concerns about educators losing access to their doctors.
About 5,800 people — DPS employees and their family members — receive their health care via Kaiser, said Rob Gould, president of the Denver Classroom Teachers Association. Kaiser is the insurer that DCTA members use most.
“This is a significant disruption in the system,” Gould said. “I’m not really sure why they want to get rid of it other than cost and trying to push us to a lower cost system.”
The relationship between DPS and Kaiser soured after district officials said the provider was outbid last year by three other insurers on a three-year contract. Kaiser submitted a revised proposal for DPS last year, an action that drew criticism from the district and, ultimately, spurred an outside investigation into the bidding process as DPS officials placed the district’s human resources director on administrative leave.
The feud escalated this week in response to The Denver Post’s questions about potential changes to the district’s health care plans.
In the middle of the potential breakup is the teachers union, which alleges employees were unaware they would lose access to their doctors until Kaiser sent a notice in December alerting them that coverage for DPS staff would end on July 1.
“I was shocked I learned, not from DPS, but directly from Kaiser, that it would no longer be an option during enrollment,” Susan Fortney, an occupational therapist with the district, told the school board last week.
In a statement, DPS spokesman Scott Pribble accused Kaiser leaders of repeatedly violating the district’s bidding process, including by speaking during the school board’s public comment session last week — an attempt, he alleged, to “improperly influence the decision that had been made during a legal and appropriate process.”
Amy Whited, a spokeswoman for Kaiser Permanente Colorado, disputed DPS’s claims
“Kaiser Permanente has carefully followed the DPS procurement process,” she said in a statement.
Health care expenses are increasing
At the crux of the DPS-Kaiser dispute are rising health care costs.
K-12 districts across Colorado are facing significant financial constraints as enrollment, and therefore state per-pupil funding, declines. Uncertainty swirls around the future of state and federal funding amid a nearly $1 billion shortfall in the Colorado budget and the Trump administration’s threats to cut K-12 money.
At the same time, costs, including health insurance, are going up. School districts spend most of their money on employees, and districts such as DPS have begun reducing their budgets by placing raises and unfilled positions on the chopping block.
DPS’s budget for employee health insurance has increased 20% — or by about $12 million — since the 2023-24 fiscal year, from $60.2 million to more than $72 million for 2025-26.
Unlike some of its peers in metro Denver, DPS is expected to balance its $1.5 billion budget this year without having to use any money set aside in reserves. In fact, DPS officials project the district will have a $4.4 million surplus for the 2025-26 year, according to its proposed budget.
But that may not always be the case. DPS is projected to run a deficit starting in the 2027-28 fiscal year. Such projections can always change, but DPS could find itself in a more dire situation — and sooner — if the Trump administration pulls K-12 funding.
Four providers placed bids to offer health insurance for DPS employees last year, including Kaiser, MotivHealth, UnitedHealthcare and Anthem Blue Cross Blue Shield. A fifth company, National Script Rx Services, was non-compliant, so the company’s bid was not reviewed, according to a document posted to the agenda for the school board’s Feb. 19 meeting.
The insurers competed for a three-year contract that will run from July 1 through June 30, 2029, with the option for renewals.
A team of nine people, including representatives from DPS’s human resources and finance departments, evaluated the insurers’ bids and gave them scores out of 100, based on costs, technology and other criteria.
MotivHealth and UnitedHealthcare received the highest scores, 77.7 and 76, respectively. Kaiser received the lowest score, 69.3, mostly because the review team gave the insurer such a low score — 8.9 out of 20 — for costs, the document showed.
“Denver Public Schools is accountable to the Denver taxpayers and good stewards of money that is provided to the district,” Pribble said. “…(W)ith health care costs rising across the country, employers and employees will see higher costs no matter which vendor or vendors are selected.”
Kaiser officials defended the nonprofit’s costs.
“…(W)e believe there is a fundamental mistake or misunderstanding related to the total cost of our Kaiser Permanente health plan coverage,” Whited said in a statement.
Kaiser officials have contacted DPS’s team three times in an effort “to clear up this misunderstanding and have received zero responses,” she added.
An investigation and a top administrator on leave
DPS officials criticized actions they said Kaiser took after it became apparent the district no longer wanted to include the nonprofit as a health insurance option for employees.
Pribble said Kaiser “violated” the proposal process by reaching out to Moreton & Company, a third-party consultant retained by DPS, “to ascertain the validity of their bid.”
“Once they learned that they were not competitive, they then submitted an additional proposal after the (bidding) process had closed,” he said. “Once they learned they had not been selected, they directly contacted DPS staff, calling out the district for not choosing them as an insurance provider.”
Whited pushed back on DPS’s allegations, saying that a Moreton representative contacted the insurer rather than the other way around. A broker for the consulting firm reached out a second time on Nov. 18, 2025, asking “explicitly” on behalf of DPS Chief of Talent Edwin Hudson for Kaiser to reduce an administrative fee in its proposal, which the insurer agreed to do that same day, she said.
“Kaiser Permanente did not initiate contact with a Moreton broker,” she said. “We have nothing to hide and would welcome transparency about this process. We have done nothing but dutifully follow DPS’s direction and that of its authorized agents throughout this process.”
Whited copied the DPS school board on her response to The Post’s questions, adding at the end of her email that Kaiser officials “are troubled by these accusations and believe transparency is essential and would welcome the opportunity to speak to the Board of Education, share documentation such as call logs, text messages and emails to verify this version of events.”
DPS officials, after seeing Kaiser’s email to The Post, responded by revealing that the district had conducted an outside investigation after “questions were raised by a Denver Public Schools administrator” about the health insurance proposal process.
DPS leaders also placed Hudson, the chief human resources officer, on administrative leave on Nov. 21, 2025 — three days after Kaiser said it was asked to revise its proposal, according to a memo obtained by The Post.
“The investigation found that the (proposal) process was run with integrity and that Mr. Hudson did not have inappropriate communication with Kaiser Permanente or any other vendor,” Pribble said.
DPS hired Employment Matters to conduct the investigation, which ran from Dec. 1 to Jan 26, Pribble said.
He declined to share the findings of the investigation with The Post, saying the results are “privileged.” DPS does not know the total cost of the investigation because the district has not yet received the bill, Pribble said.
Hudson’s leave was lifted by DPS on Jan. 27, but district officials declined to say whether he has returned to work.
“Our (proposal) selection process for medical provider vendors was conducted diligently, resulting in the selection of the most cost-effective providers for all employees and the district,” Hudson said in a statement to The Post. “Throughout the process, committee members refrained from engaging in any direct or indirect communication, except for a reminder to a vendor that DPS would not accept any communication during the silent period of the selection process.”
Hudson did not respond to a question asking whether he was still on administrative leave.
A Moreton representative could not be reached for comment.
‘…(E)rodes employee trust’
DPS administrators sent an email to employees on Dec. 8 — the same day Kaiser alerted staff that their coverage would end — apologizing for not telling them first. District officials, in the letter reviewed by The Post, said Kaiser sent its notice out “prematurely.”
“Please know that we will do everything we can to ensure a smooth transition,” district officials wrote. “…This means if you are pregnant, are undergoing cancer treatments or have another significant medical need, we will work with you and our other providers to develop a plan to transition at the appropriate time.”
But the damage was done. DCTA filed a grievance with DPS, alleging administrators violated the teachers union’s contract by bypassing the district’s benefits board in deciding not to move forward with Kaiser.
Two other employee unions — the Denver School Leaders Association and the Association for Building, Grounds and Warehouse Workers — also filed grievances, DCTA spokewoman Angelina Reed said.
Pribble declined to comment on the unions’ claims, saying that DPS doesn’t comment on grievances.
“A final decision hasn’t been made,” he said. “…(T)he district has a plan in place for continuity of care for critical cases.”
At last week’s board meeting, DPS employees asked the school board to extend Kaiser’s contract.
“Canceling Kaiser would force educators to change providers mid-care, disrupt prescriptions and delay critical services,” East High School educator Tyler Knauer told the school board last week. “That’s not a small inconvenience. It’s a real health risk.”
He said that not only will his children have to change providers, but East High employees, who are receiving mental health services from Kaiser after shootings at or near the campus in 2023, will have to find new therapists.
DPS teacher Rhys Conly’s partner, who has multiple sclerosis, is now facing the possibility of losing her entire medical care team — which consists of seven providers — in a matter of months, the educator told the board.
The discontinuation of Kaiser’s contract means Conly’s partner will have to “rapidly schedule a highly time-sensitive infusion designed to prevent her from prematurely losing the use of her legs within two weeks,” the teacher said.
“The way the district handled the decision erodes employee trust,” Knauer added.
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