House Committee on Health and Human Services (03/13/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON HEALTH AND HUMAN SERVICES

Date:	03/13/2009	ATTENDANCE

Time:	01:02 PM to 07:39 PM	Acree	X
		Gerou	X
Place:	LSB A	Green	X
		Kefalas	X
This Meeting was called to order by		Kerr J.	X
	Representative Riesberg	McGihon	X
		Nikkel	E
This Report was prepared by		Primavera	X
	Kelly Stapleton	Swalm	*
		Gagliardi	X
		Riesberg	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB09-1293		Amended, Referred to Appropriations

01:03 PM -- House Bill 09-1293

Representatives Riesberg and Ferrandino presented House Bill 09-1293 which creates the Health Care Affordability Act of 2009. The bill authorizes the Department of Health Care Policy and Financing (DHCPF) to collect hospital provider fees for the purpose of obtaining federal financial participation for the state's medical assistance program. The bill stipulates that the fees, which are set by the State Medical Board and based on federal regulations, can be used for the following:

to increase reimbursements to hospitals;
to increase the number people covered by medical assistance programs; and
to pay for administrative costs related to the fee and program expansions.

Representative Riesberg explained the process in which the bill was crafted and stated that it is part of the Governor's Building Blocks for Health Care Reform. Representative Ferrandino spoke to the funding mechanics of the bill. He stated that the bill allows the state to assess a fee on hospitals. He explained that each dollar assessed will be matched with federal funds, potentially bringing in $1.2 billion dollars to the state. He stated that with the additional funds, the state can expand other programs to provide access to health care to approximately 100,000 more Coloradans. Specifically the bill:

expands eligibility for the Children's Basic Health Plan (CHP+) from 205 percent of the federal

poverty level up to 250 percent federal poverty level (FPL);

expands eligibility for Medicaid to parents up to 100 FPL;
expands eligibility for Medicaid to childless adults up to 100 percent of the FPL;.
allows for a Medicaid buy-in up to 400 percent of the FPL for disabled individuals; and
provides continuous coverage for children on Medicaid.

Representative Ferrandino stated that the bill will fund the Colorado Indigent Care Program in its entirety. He stated that the administrative costs to the bill are very low, approximately 3 percent, and are significantly lower than in the private sector. He spoke to the rule making procedures. He described the Advisory Board which will oversee the implementation of the expansion programs.

01:18 PM

Representative Ferrandino stated that there is a strong likelihood that the federal government would approve the waiver as 40 other states have used a similar strategy and their waivers were approved.

01:27 PM

Representative Gerou stated that the provider fee is defined in 42 CFR 433.68(b) as a tax. She stated that she has concerns that the provider fee is actually a tax. Representative Swalm spoke to the increase in caseload for Medicaid and asked the sponsors what adding new classes of recipients might do to Medicaid. Representative Ferrandino stated that one of the recommendations from the Blue Ribbon Commission for Health Care Reform was to find a dedicated revenue source to increase access to health care. He stated that it is a huge step forward that he supports. There was some discussion regarding how the provider fee will be determined. Representative Ferrandino stated that the federal cap on provider fees is 5.5 percent of net revenue. He stated that the bill estimates the fee at approximately 2.3 percent of net revenue. A memorandum from the Office of Legal Services regarding whether a "hospital provider fee" is a tax for purposes of Section 20 (4)(a) of article X of the Colorado Constitution was provided to the committee (Attachment A). The memorandum states that a provider fee in this instance is not considered a tax because it would be used to increase reimbursements to the hospitals paying the fee, not to increase revenue for general governmental purposes.

01:48 PM

Representative Kerr asked how the state is going to sustain the costs of the program and asked about other states who have used a similar strategy as suggested in the bill. Representative Ferrandino stated Joan Henneberry, Executive Director, Department of Health Care Policy and Financing, would be more suited to answer that question. He stated that the bill, however, has a similar framework to legislation passed in other states. Representative Riesberg responded to Representative Kefalas's question regarding how consumers can be assured that the provider fee will not be passed on to them. He stated that the hospital does not have an incentive to pass the fee onto the consumer, as ultimately, the hospital is being reimbursed for uncompensated care. Representative Swalm raised concerns regarding the lack of description in the bill of the provider rate reimbursement formula. He stated that he is concerned that Medicaid will be expanded, but that primary care physicians will not be available to serve the newly added participants. There was further discussion regarding the procedures for developing new program rules and how the provider fee will be assessed.

02:08 PM

There was some discussion regarding the intent of the bill. Representative Riesberg stated that the bill's intent is to subsidize indigent care costs and address the issue of the uninsured in Colorado. Representative Ferrandino addressed Representative Gagliardi's question regarding how the bill affects the Taxpayer Bill of Rights (TABOR) limits and Referendum C. He stated that he does not believe the bill will cause a refund under TABOR.

02:17 PM -- Steve Summer, President, Colorado Hospital Association, Jim Shmerling, The Children's Hospital, and Russ Johnson, San Luis Valley Regional Medical Center, came to the table to present their testimony as a panel.

Steven Summer, President, Colorado Hospital Association, spoke in support of the bill. He stated that the bill provides access to health care for Colorado's most vulnerable populations. A handout in support of the bill was provided to the committee (Attachment B). Mr. Summer stated that with the economy in its current state, many individuals who have lost their jobs no longer have access to health care. He stated that uncompensated health care from hospitals is approximately $1.5 billion annually. He stated the bill reduces uncompensated care costs to hospitals. Mr. Summer responded to Representative Gerou's question regarding whether physicians who work at a hospital will be reimbursed under the bill. He stated that primary care physicians will not see their reimbursements increase through this bill, but that physicians who are employed directly by the hospital will. Representative Gerou stated that she is concerned about the level of bureaucracy being created by this bill. Mr. Summer stated that the hospitals are supportive of the bill because the end result increases reimbursement of uncompensated care to the hospitals.

02:36 PM

There was some discussion regarding the cost shift factor that occurs in health care. Mr. Summers reiterated that the hospitals support the bill to reduce the cost-shifting that occurs.

02:39 PM -- James Shmerling, President and Chief Executive Officer, The Children's Hospital, testified in support of the bill. Mr. Shmerling provided a handout in support of the bill (Attachment C). He stated that approximately 41 percent of the patients the hospital treats are Medicaid clients. He stated that the bill reduces the cost of care for these patients. He testified that several children who are seen in the hospital have not received any type of preventative care or the necessary immunizations, which results in serious illnesses. He stated that the bill increases access to health care for this needy population. Representative Gerou stated that she does not think Medicaid is sustainable and that expanding the program could be disastrous. Mr. Shmerling stated that the hospital does not have the revenue to continue to sustain the level of care that is required of the hospital. He responded that the level of uncompensated care is disastrous as well. Mr. Summer reiterated to Representative Swalm that hospitals support the bill.

02:52 PM -- Russ Johnson, San Luis Valley Regional Medical Center, testified in support of the bill. He stated that 46 percent of services provided by the San Luis Valley Regional Medical Center are to uninsured and Medicaid clients. Mr. Johnson spoke to the cost-shifting issue. He stated that it is happening now and that the bill will bring new money into the system. He stated that the hospitals do not have an incentive to pass the cost onto the consumer because the fee is being fully reimbursed back to the hospital. There was further discussion regarding cost-shifiting. Mr. Johnson stated that with the bill, he does not believe that cost-shifting will occur as it does now. He stated that there will not be a need for the hospital to cost-shift because the hospital will have increased revenue from the increased reimbursement.

03:16 PM

The panel of witnesses, Mr. Johnson, Mr. Shmerling, and Mr. Summer, responded to questions from the committee. Mr. Summer reiterated to the committee that the hospitals across the state will benefit from this bill. He also reiterated that when more individuals in Colorado have access to health care, it is a benefit to the entire state of Colorado.

03:27 PM

The committee took a brief recess.

03:38 PM -- The committee reconvened. Donald Kortz, Fuller Real Estate, member of Blue Ribbon Commission for Health Care Reform (208 Commission), testified in support of the bill. Mr. Kortz stated that one of the recommendations from the 208 Commission was to identify a new dedicated revenue stream to increase health care access. He spoke to the cost-shifting that occurs in health care. Representative Gerou asked if the advisory board was representative of the business community. Mr. Kortz stated that he believes it would be beneficial to add a representative to the advisory board that was from the business community. He stated that lacking a representative from the business community on the board would not deter him from supporting the bill.

03:48 PM -- Joan Henneberry, Executive Director, Department of Health Care Policy and Financing, testified in support of the bill. Ms. Henneberry spoke to the success of establishing medical homes. She stated the department has been working closely with the Colorado Community Health Network regarding increasing access to primary care physicians. She stated that the bill is consistent with the second phase of the Governor's Building Blocks for Health Care Reform in addressing access to health care and reducing the number of uninsured in Colorado. She stated that one aspect of health care reform is to achieve better coverage for low-income families. She stated that the bill accomplishes this. Ms. Henneberry stated that part of the responsibilities of the department is to bring solid medical care back to the Medicaid population. She stated that the department's responsibilities are not to just pay the bills, but to provide the best care available. She reiterated that the department believes the bill will ultimately save the state money. She stated that the bill will help build a better health care system in Colorado. She estimated that every uninsured person costs the state approximately $4,800 a year. She said that the state cannot afford to do nothing.

04:01 PM

Chris Underwood, Director, State Programs and Federal Financing Division, Department of Health Care Policy and Financing, described the uniform provider fee. Director Henneberry stated that approximately 20 states have implemented some type of hospital fee financing mechanism. She stated that Wisconsin recently passed a bill that uses a provider fee as a financing mechanism, as well as to expand the state's Medicaid program. Director Henneberry spoke about other states who have implemented this type of financing mechanism. She stated that the department has every intention of tracking data and producing information with regard to the effectiveness of the strategy. Representative Kerr asked about House Bill 08-1114, the Medicaid Nursing Facility Reimbursements bill which assessed a fee on nursing homes, and how it compares to this bill. Director Henneberry stated that the hospitals have collaborated in the same sense that the nursing homes did to come to an agreement on House Bill 08-1114, but stated that this bill is more detailed and has more protection and reporting requirements. Ms. Henneberry stated that the bill will take at least a year to implement. There was some discussion regarding how preventative care will be incorporated. She stated that the additional funds that will be brought in will be used to fund comprehensive care, primary care, and preventative care through the Accountable Care program.

04:34 PM

Ms. Henneberry described the Accountable Care initiative, which aims to improve care management for Medicaid populations. She stated that the initiative is a budget request for FY 2009-10. John Bartholomew, Budget and Finance Office, spoke to Representative Acree's question regarding how the funds will be used. Director Henneberry stated that the funds can be used for uncompensated care reimbursement and to expand specific Medicaid populations. Representative Swalm reiterated his concern that the fee will be passed on to the consumer. Mr. Underwood stated that the hospital will not have a need to do this because they will get the fee back. He stated that the hospitals see this bill as a win. There was some discussion regarding how the fee will be repaid to the hospitals.

05:05 PM -- Deborah Colburn, All Kids Covered, spoke in support of the bill. A handout in support of the bill was provided to the committee (Attachment D). Ms. Colburn spoke to the section in the bill that provides 12-month continuous coverage for children in Medicaid. She spoke to the inefficiencies of not having continuous coverage. Another handout was provided with a list of all the members of the Colorado Consumer Health Initiative (Attachment E).

05:11 PM -- Denise de Percin, Executive Director, Colorado Consumer Health Initiative, spoke in support of the bill. She stated it is important to put the bill in the context of the on going health care reform in Colorado which started with the Blue Ribbon Health Care Reform and the Governor's Building Blocks for health care reform.

05:17 PM -- Dr. Mark Laitos, Colorado Medical Society, testified in support of the bill. He spoke to the level of uncompensated care that hospitals incur. He explained that since the entire state, from individuals paying their premiums to the hospitals, already covers the cost of uncompensated care, premiums may actually be positively affected given that overall, uncompensated care will be reduced. He stated that systemic Medicaid reform is necessary and the Colorado Medical Society supports the bill.

05:21 PM -- Linda Kanamine, Vice-president of Public Affairs, HCA-HealthOne LLC, testified in support of the bill. Representative Geroustated that as a business person, she believes the hospital is taking on quite a risk. Ms. Kanamine stated that HealthOne is a hospital system and, as Mr. Underwood explained, some of their hospitals may pay more, while others may gain, depending on the number of Medicaid clients served.

05:28 PM -- Tom Nash, Colorado Hospital Association, offered to answer committee questions.

05:29 PM -- Leslie Berkowitz, representing himself, spoke in support of the bill, specifically to the Medicaid Buy-In piece. He stated that if a Medicaid recipient gains employment, and increases their income above the eligibility standard for Medicaid, they would lose Medicaid coverage. He stated that this acts as an inhibitor for the disability community to seek employment and become contributing members of society. He stated that the bill does not draw upon General Funds to accomplish its goals. He stated it is a win win for everyone.

05:33 PM -- Pat Ratliff, Colorado Counties, Inc., and Commissioner Susan Beckman, Arapahoe County, spoke in support of the bill. Commissioner Beckman asked the committee to keep in mind county needs with regard to staffing for administration of Medicaid. She stated that amendment L.010 will be offered that addresses proper funding to counties and she asked the committee to support it (Attachment F).

05:41 PM -- Arthur Powers, Thrive! Persons Living with HIV/AIDS Initiative, spoke in support of the bill. Mr. Powers spoke to amendment L.014, which would add a member to the advisory board with a disability (Attachment G). He stated there is a need for a member of the advisory board to be representative of the disabled community due to the complexity of the Medicaid system for individuals with chronic diseases.

05:55 PM -- Sheryle Hutter, Colorado Cross Disability Coalition, spoke in support of the bill. She spoke in support of amendment L.014 (Attachment G).

06:00 PM -- Dr. Randall Clark, representing himself, spoke in opposition to the bill. He spoke to the inefficiencies of the Medicaid system. He stated that expanding Medicaid is a flawed policy. Dr. Clark provided data with regard to reimbursement rates under Medicaid and stated that there will be more costs incurred under this bill and that it will only increase cost-shifting. Dr. Clark stated that expanding programs that do not pay their costs is illogical. He stated that the bill has unintended consequences. He stated that Medicaid is not a sustainable program.

06:17 PM

Representative Riesberg provided a wrap-up to the bill.

06:20 PM

The committee took a brief recess.

06:28 PM

The committee reconvened.


BILL:	HB09-1293
TIME:	06:28:40 PM
MOVED:	Riesberg
MOTION:	Moved to adopt prepared amendment L.007 (Attachment H). Representative Riesberg explained the amendment. The motion passed without objection.
SECONDED:	Green
		VOTE
	Acree
	Gerou
	Green
	Kefalas
	Kerr J.
	McGihon	Excused
	Nikkel	Excused
	Primavera
	Swalm
	Gagliardi
	Riesberg

Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1293
TIME:	06:30:31 PM
MOVED:	Riesberg
MOTION:	Moved to adopt prepared amendment L.010 (Attachment F). Representative Riesberg explained the amendment. The motion passed without objection.
SECONDED:	Green
		VOTE
	Acree
	Gerou
	Green
	Kefalas
	Kerr J.
	McGihon	Excused
	Nikkel	Excused
	Primavera
	Swalm
	Gagliardi
	Riesberg

Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1293
TIME:	06:33:37 PM
MOVED:	Kerr J.
MOTION:	Moved to adopt prepared amendment L.004 (Attachment I). Representative Kerr stated that the amendment removes all of the expansion programs from the bill. The motion failed on a roll call vote of 4-5.
SECONDED:	Gerou
		VOTE
	Acree	Yes
	Gerou	Yes
	Green	No
	Kefalas	No
	Kerr J.	Yes
	McGihon	Excused
	Nikkel	Excused
	Primavera	No
	Swalm	Yes
	Gagliardi	No
	Riesberg	No

Not Final YES: 4 NO: 5 EXC: 2 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1293
TIME:	06:39:22 PM
MOVED:	Kerr J.
MOTION:	Moved to adopt prepared amendment L.005 (Attachment J). Representative Kerr stated that the amendment adds a post-enactment review of the implementation of the bill. Representative Riesberg stated that the amendment might drive an increase in the fiscal note. The motion passed without objection.
SECONDED:	Swalm
		VOTE
	Acree
	Gerou
	Green
	Kefalas
	Kerr J.
	McGihon	Excused
	Nikkel	Excused
	Primavera
	Swalm
	Gagliardi
	Riesberg

Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1293
TIME:	06:43:24 PM
MOVED:	Gerou
MOTION:	Moved to adopt prepared amendment L.008 (Attachment K). The motion passed without objection.
SECONDED:	Swalm
		VOTE
	Acree
	Gerou
	Green
	Kefalas
	Kerr J.
	McGihon	Excused
	Nikkel	Excused
	Primavera
	Swalm
	Gagliardi
	Riesberg

Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1293
TIME:	06:45:45 PM
MOVED:	Swalm
MOTION:	Moved to adopt prepared amendment L.009 (Attachment L). Jeremiah Barry, Office of Legal Services, pointed out there may be a conflict between amendment L.009 and amendment L.012 if the committee were to vote on amendment L.012 before L.009 (Attachments L and M). The motion failed on a 4-5 roll call vote.
SECONDED:	Kerr J.
		VOTE
	Acree	Yes
	Gerou	Yes
	Green	No
	Kefalas	No
	Kerr J.	Yes
	McGihon	Excused
	Nikkel	Excused
	Primavera	No
	Swalm	Yes
	Gagliardi	No
	Riesberg	No

Not Final YES: 4 NO: 5 EXC: 2 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1293
TIME:	06:51:45 PM
MOVED:	Gerou
MOTION:	Moved to adopt prepared amendment L.011 (Attachment N). The motion failed on a roll call vote of 4-5.
SECONDED:	Kefalas
		VOTE
	Acree	Yes
	Gerou	Yes
	Green	No
	Kefalas	No
	Kerr J.	Yes
	McGihon	Excused
	Nikkel	Excused
	Primavera	No
	Swalm	Yes
	Gagliardi	No
	Riesberg	No

Not Final YES: 4 NO: 5 EXC: 2 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1293
TIME:	06:55:27 PM
MOVED:	Gerou
MOTION:	Moved to adopt prepared amendment L.012 (Attachment M). The motion failed on a 4-5 roll call vote.
SECONDED:	Kerr J.
		VOTE
	Acree	Yes
	Gerou	Yes
	Green	No
	Kefalas	No
	Kerr J.	Yes
	McGihon	Excused
	Nikkel	Excused
	Primavera	No
	Swalm	Yes
	Gagliardi	No
	Riesberg	No

Not Final YES: 4 NO: 5 EXC: 2 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1293
TIME:	07:01:38 PM
MOVED:	Gerou
MOTION:	Moved to adopt prepared amendment L.013 (Attachment O). Representative Gerou stated that the amendment adds members of the General Assembly to the Advisory Board. The motion failed on a 4-5 roll call vote.
SECONDED:	Kerr J.
		VOTE
	Acree	Yes
	Gerou	Yes
	Green	No
	Kefalas	No
	Kerr J.	Yes
	McGihon	Excused
	Nikkel	Excused
	Primavera	No
	Swalm	Yes
	Gagliardi	No
	Riesberg	No

Not Final YES: 4 NO: 5 EXC: 2 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1293
TIME:	07:08:17 PM
MOVED:	Kefalas
MOTION:	Moved to adopt prepared amendment L.014 (Attachment G). Representative Kefalas explained that the amendment adds a person with a disability to the Advisory Board. The motion passed on a 5-4 roll call vote.
SECONDED:	Primavera
		VOTE
	Acree	Yes
	Gerou	Yes
	Green	No
	Kefalas	Yes
	Kerr J.	Yes
	McGihon	Excused
	Nikkel	Excused
	Primavera	Yes
	Swalm	No
	Gagliardi	No
	Riesberg	No

Not Final YES: 5 NO: 4 EXC: 2 ABS: 0 FINAL ACTION: PASS

Representative Swalm spoke to a handout regarding the federal deficit (Attachment P).


BILL:	HB09-1293
TIME:	07:21:14 PM
MOVED:	Riesberg
MOTION:	Moved to refer House Bill 09-1293, as amended, to the Committee on Appropriations. The motion passed on a 5-4 roll call vote.
SECONDED:	Green
		VOTE
	Acree	No
	Gerou	No
	Green	Yes
	Kefalas	Yes
	Kerr J.	No
	McGihon	Excused
	Nikkel	Excused
	Primavera	Yes
	Swalm	No
	Gagliardi	Yes
	Riesberg	Yes

Final YES: 5 NO: 4 EXC: 2 ABS: 0 FINAL ACTION: PASS

07:39 PM

The committee adjourned.