Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON HEALTH AND HUMAN SERVICES

Date:04/17/2006
ATTENDANCE
Time:01:40 PM to 03:24 PM
Berens
X
Cloer
X
Place:HCR 0112
Green
X
Kerr A.
X
This Meeting was called to order by
Kerr J.
X
Representative McGihon
Lundberg
X
Riesberg
X
This Report was prepared by
Soper
X
Whitney Gustin
Stafford
X
Sullivan
X
Weissmann
E
Frangas
X
McGihon
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
SB06-198Laid Over


01:41 PM -- Senate Bill 06-198

Representative Romanoff, sponsor, presented the bill creating standards for contracts between health care providers and health insurers. He stated most people wish to have their providers focus on providing care rather than negotiating with and fulfilling requirements of the individual insurance companies. Representative Stafford distributed amendment L.008 to committee members (Attachment A).

The following persons testified:

01:45 PM -- Dr. Rick May, Colorado Medical Society, spoke in support of the bill. He described provider contracts with health insurers. He stated the bill is a request for transparency in insurer contracts. Physicians wish to know precisely what they are signing. Dr. May stated contract negotiations are much different now compared to years ago. The concentration of the health insurance market has led to a situation in which physicians feel forced to accept insurers' requirements or consider closing their practices. He stated the bill does not address fees. Representative Romanoff discussed the bill's fiscal impact. Two documents were distributed by the Colorado Medical Society (Attachments B and C).

01:57 PM -- Richard Murray, Colorado Medical Society, stated the bill helps to level the playing field among providers, insurers, and patients. He indicated physicians are often in a position of not understanding a contract's payment mechanisms (e.g., what they will be paid and how they will be paid). He stated the bill does not address employment issues (e.g., physician/hospital relationships).







02:04 PM -- Dr. Jeremy Lazarus, American Medical Society, discussed Colorado's concentrated health insurance market. He stated two managed care insurers now comprise approximately 50 percent of the health insurance market. Such concentration puts physicians at a significant disadvantage when negotiating with insurers. He stated insurers may unilaterally changed provider contracts without notifying physicians. Representative Romanoff directed members to page 5 of the reengrossed bill. He stated negotiations among interested parties to the bill regarding notice on contract changes are ongoing.

02:15 PM -- Dr. William Jesse, Medical Group Management Association, spoke in support of the bill and distributed a copy of his testimony to members (Attachment D). He stated the bill will help reduce health care costs and allow physicians to focus on providing care. He stated insurers often amend provider contracts multiple times during the contract's applicability period.

02:23 PM -- Linda Culbertson, practice administrator, stated her practice is contracted with 25 different insurers in Colorado. Some contract information is not provided directly to physicians. Sometimes administrators must visit several web sites to access other pertinent information. She stated 30 to 35 percent of her staffs' time is spent on the phone with health insurers to get information regarding such things as formularies and reimbursements. She stated the transparency required by the bill will allow providers to better compare contracts.

02:33 PM -- Dr. John Sbarbaro, University Physicians, described university physicians' need to generate income to support their practices since the passage of the Taxpayers' Bill of Rights (TABOR) and the corresponding reductions of state funding. He described changes made by insurers to contracted reimbursement rates and methods. He answered questions about University Physicians.

02:40 PM -- Don Mielke, representing Colorado Chiropractors and another 10 providers listed by Mr. Mielke, described "adhesion contracts." These contracts are lopsided, greatly favoring one party over the other. Mr. Mielke stated insurer contracts are adhesion contracts.

02:45 PM -- Travis Berry, Colorado Competitive Council, spoke in opposition to the bill and described it as unwarranted government intrusion into the marketplace. He asked the committee to consider who is in a better position to determine and work through contracts between provider and insurers. Representative J. Kerr discussed his belief that the legislature has a "dog in the fight" because they represent the people of Colorado, include those seeking health care services.

02:53 PM -- Ralph Pollock, Colorado Association of Commerce and Industry (CACI), spoke in opposition to the bill and distributed a copy of his testimony to members (Attachment E). He described physicians as a sophisticated group that is on equal footing with insurers when negotiating contracts. He stated the bill will result in higher premiums and a disruption of provider networks.

03:01 PM -- Michael Huotari, Colorado Association of Health Plans, spoke in opposition to the bill. He stated his objection to prescribed contract provisions and indicated the bill will raise costs and disrupt provider networks. He described "evergreen" contracts, contracts that are renewed with few changes year after year. He described insurer costs associated with the bill have been estimated at $1 to $8 million. He described differences between the reengrossed bill and policies supported by the Governor's office. He stated that despite negotiations between opponents and proponents of the bill, the Association of Health Plans still has many concerns with the bill's provisions. Mr. Huotari answered questions about negotiations among interested parties prior to the bill's introduction. Representative Romanoff stated his preference for voluntary negotiations among interested parties. Mr. Huotari described his support for a strike below amendment sponsored by the Governor's office.






03:14 PM -- Lynn Borup, San Luis Valley HMO, spoke in opposition to the bill. She described the bill's impact on insurance premiums. She stated these costs will hit her HMO's enrollees particularly hard because many of them are low-income families. Higher costs will also increase the number of uninsured persons. She stated her HMO can expect their contract renewals to be delayed because providers will address San Luis Valley HMO contracts after resolving larger insurers' contracts. She stated her HMO has been involved in voluntary negotiations on the issue with providers.


03:20 PM

Representative Stafford stated she may offer L.008 when the committee takes action on the bill. Representative Romanoff made concluding remarks. He addressed testimony regarding higher costs under the bill. He stated the people of Colorado will benefit from the bill's transparency provisions.


03:24 PM

Representative McGihon announced action would be taken on the bill at a later date. The committee adjourned.