First Regular Session Sixty-ninth General Assembly STATE OF COLORADO INTRODUCED LLS NO. R13-0039.02 Kristen Forrestal x4217 SCR13-002 SENATE SPONSORSHIP Aguilar, HOUSE SPONSORSHIP Ginal, Senate Committees House Committees Health & Human Services SENATE CONCURRENT RESOLUTION 13-002 Submitting to the registered electors of the state of Colorado an amendment to the Colorado constitution concerning the creation of a Colorado health care cooperative to ensure access to a statewide health care system that provides health care services to all persons whose domicile is Colorado for all health-related issues, and, in connection therewith, creating an interim and then a permanent board of directors to administer the cooperative; requiring the cooperative to contract with health care providers to deliver specific health care benefits; assessing a six percent payroll premium from employers, a three percent payroll premium from employees, comparable employer and employee premiums from self-employed individuals, and a nine percent premium on other specified income; assessing premiums at a lower rate until the cooperative assumes fiduciary responsibility for health care payments; placing a cap on the amount of income subject to the premiums; authorizing the board to increase the premiums in specified circumstances; and requiring the department of revenue to collect and transfer the premiums to pay for health care services provided through the cooperative. Resolution Summary (Note: This summary applies to this resolution as introduced and does not reflect any amendments that may be subsequently adopted. If this resolution passes third reading in the house of introduction, a resolution summary that applies to the reengrossed version of this resolution will be available at http://www.leg.state.co.us/billsummaries.) The concurrent resolution creates a constitutional amendment to establish a Colorado health care cooperative to provide health care through a statewide system. An interim board of directors will be appointed to the cooperative to carry out all responsibilities of the cooperative until the members of the cooperative have elected a permanent board to operate the cooperative. The cooperative is responsible for paying for health care services provided through the cooperative from premiums collected by the department of revenue. Permanent board members will be elected from among the members of the cooperative residing in different regions throughout the state. The concurrent resolution requires the board to establish rules and bylaws and to create the structure of the cooperative. The amendment requires the cooperative to contract with health care providers to deliver specific health care benefits. The concurrent resolution imposes a payroll premium on employers and employees and a premium on nonemployment-related income. The concurrent resolution submits a ballot question to the voters asking if taxes should be increased for the purpose of funding the health care cooperative. Be It Resolved by the Senate of the Sixty-ninth General Assembly of the State of Colorado, the House of Representatives concurring herein: SECTION 1. At the next election at which such question may be submitted, there shall be submitted to the registered electors of the state of Colorado, for their approval or rejection, the following amendment to the constitution of the state of Colorado, to wit: In the constitution of the state of Colorado, add article XXX as follows: ARTICLE XXX Colorado Health Care Cooperative Section 1. Purpose and findings. The people of the state of Colorado hereby find and declare that Coloradans need security that they will be able to afford health care for themselves and their families; that businesses need relief from the unsustainable financial and administrative burdens of providing health insurance for their employees and from the complicated and frequently misunderstood plans and benefits the insurers provide; that health care costs have been increasing at unsustainable rates and must be stabilized; that Colorado needs a health care delivery system that rewards value over volume; that Colorado health care providers need relief from the administrative burdens that interfere with quality health care; and that section 1332 of the federal "Patient Protection and Affordable Care Act" allows Colorado the opportunity to obtain waivers from the insurance exchange program in order to create a unique Colorado health care system; that Colorado provide health care through a statewide cooperative that improves the health of the population, enhances the patient experience of care, and controls the per capita cost of care. Section 2. Definitions. For the purpose of this article: (1) "Accountable care organization" or "ACO" means a nonprofit corporation that: (a) Provides medical homes for its enrollees; and (b) Is capable of providing or contracting to provide all enrollees with all designated necessary health services in return for receiving actuarially adjusted per member per month payments from the cooperative. (2) "Board" means the elected board of directors that governs the cooperative. (3) "Cooperative" means the Colorado health care cooperative established in this article. (4) "Employer" means an individual or business organization, including a nonprofit organization, that pays compensation to an individual for work performed and that is required by state or federal law to withhold a portion of the compensation for the payment of income taxes. (5) "Interim board" means the board of directors appointed for the governance of the cooperative until the transition to the elected board occurs. (6) "Medical home" means an appropriately qualified, community-based, and culturally sensitive model of primary care that ensures that every Coloradan has a personal provider who coordinates the provision of accessible, comprehensive, and continuous health care across all stages of life. A "medical home" must provide, at a minimum: (a) Health maintenance and preventive care; (b) Health education; (c) Acute and chronic illness and injury care; and (d) Coordination of medications, specialists, hospitalizations, and therapies. (7) "Member" means a person whose domicile is in Colorado for a continuous year or since birth. Section 3. Colorado health care cooperative - establishment. (1) There is hereby established a statewide Colorado health care cooperative, which is a body corporate and political subdivision of the state, is not an agency of the state, and is not subject to administrative direction or control by any department, commission, board, bureau, or agency of the state. It is a body of the people, by the people, and for the people of Colorado. (2) The purpose of the cooperative is to provide a statewide system that includes all persons whose domiciliary is Colorado for all health-related issues. The cooperative is responsible for ensuring access to health care for all members and making health payments for the services provided. Section 4. Interim board - governance and responsibilities. (1) (a) The president of the senate, the minority leader of the senate, the speaker of the house of representatives, the minority leader of the house of representatives, and the governor shall each appoint three members to the interim board within sixty days after the certification of the vote of the 2013 election by the governor. In making the appointments to the interim board, the appointing authorities shall make good-faith efforts to ensure, to the greatest extent possible, that their appointments reflect the social, demographic, and geographic diversity of the state. (b) The appropriate appointing authorities shall fill a vacancy on the interim board within thirty days after the vacancy occurs. The appointing authorities shall make good-faith efforts to ensure that each board member will strive to represent the interests of all Coloradans and all stakeholders, including patients, providers, taxpayers, and employers. (2) (a) (I) The interim board shall carry out all duties and responsibilities of the board until the members have elected a permanent board to operate the cooperative. Once the transfer of all necessary funds has been secured and all preparations for operation are completed to the satisfaction of the interim board, the interim board shall set the date for full transition of health care financing to the cooperative. (II) The interim board shall provide written certification to the governor ninety days prior to the date the cooperative is ready to assume responsibility for health care payments. The interim board shall also give the governor notification that upon a date certain, the state of Colorado is to begin regular premium collection and transfer the designated funds to the cooperative. (III) The interim board shall conduct the first election within one year and thirty days after the date the cooperative assumes responsibility for the health care payments or within three years after initial premium collection begins, whichever date is first. The interim board members shall continue to serve as ex officio, nonvoting board members for ninety days after the elected board assumes responsibility for the operation of the cooperative. (b) The interim board shall design and implement a candidate selection and election process for electing the board, prepare and monitor fair campaign practice guidelines, and promulgate and enforce rules that ensure that board elections are fair and open and free from undue monetary influence of large donors, including campaign and political action committee spending limits and donor disclosure requirements. The election process must be independent of political party affiliation. Each member over the age of eighteen is entitled to vote in each board member election in his or her district. Section 5. Elected board of directors - duties and responsibilities. (1) A member-elected board of seventeen members shall govern the cooperative. Two directors must be elected from among the members residing in each district, and three will be elected at large. The board shall divide the state into seven contiguous districts with, as much as possible, similar population sizes and based on health network alliances. The board may change these districts as needed to reflect changes in populations. (2) (a) Board members shall serve four-year terms of office and are limited to serving two consecutive terms; except that, of the initial members elected to the board, nine serve for two-year terms and eight serve for four-year terms. Initial board members elected to two-year terms are eligible to serve two years and then two consecutive four-year terms. (b) Vacancies occurring with less than one year left to serve in a term must be filled at the next election. Vacancies occurring with more than one year left to serve in a term must be filled by board appointment until the next general election. (c) The board may modify the election process as necessary to maintain the integrity of the process. (3) The board shall: (a) Select a chairperson and other officers that it deems necessary; (b) Establish bylaws, rules, and regulations it deems necessary; (c) Hire an executive team that includes a chief executive officer, a chief financial officer, and a chief medical officer. The executive team reports directly to the board and serves at the pleasure of the board. (d) Hire personnel and consultants as required to enable the cooperative to effectively fulfill its responsibilities; (e) Provide funds to the commissioner of insurance for the establishment of an ombudsman office for the members and an ombudsman office for providers with the capacity to respond to inquiries and complaints within ten business days. The ombudsman must semiannually file with the board periodic reports summarizing inquiries. These reports must be available for public inspection. (f) Create procedures for establishing membership in the cooperative; (g) Provide members with information about the creation and function of the cooperative and the dates and circumstances for each election, including how to become a candidate for the board; (h) Establish procedures for managing surplus funding by maintaining necessary operating reserves, increasing benefits, or issuing refunds to members; (i) Establish procedures for avoiding deficits by adjusting reimbursement, benefits, and copayments, or for referring funding proposals to the members; (j) Promulgate rules for a periodic independent audit of financial status and quality of medical services in the cooperative at least every three years, with recommendations for improvement; (k) Promulgate and enforce rules for the cooperative and its providers that allow for independent research of the databases of the cooperative, while protecting against the disclosure of confidential personal identifying information; (l) Develop, implement, and make publicly available a financial plan that may be modified at the discretion of the board; (m) Establish for all providers receiving payments from the cooperative an efficient and economical essential medical records and billing records system that maintains individual patient medical records that: (I) Can be easily accessed by providers and members; (II) Allows any provider to make entries into the record and view the entries of other providers; (III) Records billing information in a manner that allows well informed consumers to review billing information for accuracy; (IV) Allows the cooperative to maintain a central database of medical records for management and research purposes; and (V) Ensures the confidentiality of members' medical records. (n) Administer all public funds provided to Colorado residents for health care services, except for funds administered solely by the federal government. (4) No part of the revenues or assets of the cooperative may inure to the benefit of, or may be distributed to, a board member, officer, or private person or entity; except that the cooperative may make actual and necessary payments for expenses incurred on its behalf relating to any of its lawful purposes. The cooperative may pay reasonable compensation for services rendered relating to its lawful purposes. (5) The board is granted all powers necessary and proper to fulfill the responsibility of the cooperative to ensure access to necessary health care for all Colorado residents. Section 6. Health care benefits provided by the cooperative. (1) The cooperative shall contract with providers and ACOs to deliver health care benefits that include: (a) Primary and specialty care; (b) Hospitalization; (c) Pharmaceuticals and durable medical equipment; (d) Mental health and substance abuse treatment; (e) Emergency and urgent care; (f) Health maintenance and disease prevention; (g) Health, wellness, and end-of-life education; (h) Designated dental, vision, and hearing benefits; (i) Long-term services and support at least at the level provided by federal standards for those members eligible; and (j) Palliative and end-of-life care. (2) (a) The cooperative shall provide health care benefits to members regardless of whether the services are the result of an automobile or other accident or the result of an injury during employment. Where applicable, the cooperative may recover expenses through subrogation. (b) The cooperative shall assume responsibility for payment of all actual and necessary medical expenses incurred by workers who are members and suffer injuries arising out of and in the course of their employment as of the date the cooperative assumes responsibility for health care payments. (c) The cooperative shall assume responsibility for payments of all actual and necessary medical expenses incurred by workers who are nonmembers and suffer injuries arising out of and in the course of their employment as of the date the cooperative assumes responsibility for health care payments if the nonmember is working for a Colorado employer that maintains workers' compensation insurance for lost wages and permanent injury. (3) The cooperative shall not charge deductibles or copayments for designated preventive services or copayments for designated primary care services. (4) The cooperative shall approve all copayments proposed by providers and ACOs. (5) The cooperative will allow members to choose their own primary care provider. (6) The cooperative shall assure statewide access to emergency and trauma services, and may provide the needed funding or other support for an emergency trauma services system as determined by the Colorado department of public health and environment. (7) The cooperative shall reserve funds to provide for medical services during a statewide or local public health emergency. (8) The board shall establish policies and procedures to pay for health care benefits for people who intend to establish residency in Colorado and have not resided in the state for one year, if the board determines that these policies and procedures do not result in a significant increase of immigration to Colorado for people with high-cost medical conditions and do not result in health care costs exceeding the premiums paid by the individuals who have not yet established residency. Section 7. Delivery of service models. (1) The cooperative shall begin operation by assuming payment for health care services in a manner designed to minimize disruptions to current delivery systems. (2) The cooperative will phase in payment reforms and a unified billing system designed with input from providers. (3) The cooperative may adopt any payment model that the board determines to be effective in improving value and quality or achieving desirable health outcomes and satisfies the desire of individuals to exercise choice. (4) The cooperative shall establish a central purchasing authority responsible for negotiating favorable prices for prescription drugs and medical equipment. (5) The cooperative shall establish procedures to ensure adequate funding for providers determined to be serving a disproportionate number of members with expensive health care needs. (6) The cooperative shall ensure reasonable access to health care for all members regardless of their location in this state. Section 8. Transition to the Colorado health care cooperative. (1) The board shall seek input from and collaborate with the department of public health and environment, the department of health care policy and financing, the Colorado health benefit exchange, and the general assembly to seek all waivers, exemptions, and agreements from the federal government necessary to transfer health care funding from the federal government to the state. (2) The state shall transfer the federal funds to the cooperative on the date the cooperative assumes responsibility for health care payments. (3) The cooperative shall assume responsibility for the proper administration and distribution of the federal funds pursuant to federal law. (4) The board may apply for the cooperative to become a medicare advantage program or any successor program. (5) The board is authorized to apply for funds and enroll in any program that does not alter the mission of the cooperative. Section 9. Funding of the cooperative - collection of premiums. (1) The board shall be responsible for the determination and assessment of premiums that shall be collected by the department of revenue. (2) On and after July 1, 2014, and until the cooperative assumes fiduciary responsibility for health care payments, the Colorado department of revenue shall collect and transfer to the cooperative: (a) A two-tenths percent payroll premium from each employer in order to sponsor the cooperative health plan; (b) A one-tenth percent payroll premium from each employee in order to sponsor the cooperative health plan. The employer may, due to a contract with a union or for any other reason, pay all or part of the employee portion of the payroll premium. (c) A two-tenths percent income employer's premium and a one-tenth percent employee's premium from self-employed individuals based on gross income; and (d) A three-tenths percent premium on all income, excluding pension, social security, child support, and unemployment insurance income, that does not come from Colorado payroll or Colorado self-employment. (3) Once the cooperative assumes fiduciary responsibility for health care payments, the Colorado department of revenue shall collect and transfer to the cooperative: (a) A six percent payroll premium from employers for the purpose of sponsoring the cooperative health plan; (b) A three percent payroll premium from employees, of which the employer may pay all or part of the employee portion of the premium; (c) A six percent employer's premium and a three percent employee's premium from self-employed individuals; (d) A nine percent premium on all income that does not come from Colorado payroll or Colorado self-employment, excluding pension, social security, child support, and unemployment insurance income; and (e) The total payroll or income subject to the premiums, excluding pension, social security, unemployment insurance income, and child support, shall not exceed three hundred fifty thousand dollars for those filing individually and four hundred fifty thousand dollars for those filing jointly. These limits must be annually adjusted to inflation using the consumer price index. (4) The board shall conduct an annual assessment of revenues and costs and prepare a public report regarding the financial status of the cooperative and options considered for economies, increased benefits, member refunds, building necessary reserves, and premium increases. The board shall release the annual report on or before July 1 of each year. (5) No more than one time per calendar year and upon approval of the vote of the majority of the members of the cooperative, if the board determines that a premium increase is necessary to maintain the fiscal stability of the plan, the board may raise the premium rates by a factor of up to two percent of the existing premium. (6) The board is authorized to seek gifts, grants, and donations and federal grant moneys to implement, improve, or operate the cooperative. Section 10. Exemptions. (1) The premiums collected by the cooperative are excluded from fiscal year spending, as that term is defined in section 20 of article X of this constitution and all corresponding spending limits upon state government. (2) The cooperative is exempt from the laws and rules of the state department of personnel. Section 11. Private health insurers. Nothing in this article prohibits private health insurers from conducting business in Colorado. Section 12. Cooperative - insurance secondary. (1) The cooperative serves as a secondary insurance payer to any other health insurance coverage plan in which a member is enrolled. The cooperative shall make a payment to a provider only after other applicable insurance carriers have paid the full amount due under the insurance carrier's plan. The total of a cooperative payment and all other insurance coverage plan payments must not exceed the amount that the cooperative would pay if it were the only insurance carrier making a payment. (2) If federal medicare waivers are not granted, the cooperative shall serve as a secondary payer to medicare. (3) The board shall establish rules for health care payments when a member has other health insurance or access to other health systems in the state. Section 13. Subject to Colorado sunshine laws. The meetings of the board are subject to article 6 of title 24, Colorado Revised Statutes, the "Colorado Sunshine Act of 1972". Section 14. Repeal. If the board does not receive the waivers, exemptions, and agreements from the federal government sufficient for the fiscally sound operation of the cooperative, the board shall shut down operations and return unused premiums, and shall notify the revisor of statutes in writing of the date the operations are shut down, and the revisor of statutes shall repeal this article. SECTION 2. Ballot question regarding the collection of premiums to fund the Colorado health care cooperative. Each elector voting at said election and desirous of voting for or against said amendment shall cast a vote as provided by law either "Yes" or "No" on the proposition: "SHALL STATE TAXES BE INCREASED [number to be inserted here must be the final, full fiscal year dollar increase after highest rates are phased in] ANNUALLY BY AN AMENDMENT TO THE COLORADO CONSTITUTION CONCERNING THE CREATION OF A COLORADO HEALTH CARE COOPERATIVE TO ENSURE ACCESS TO A STATEWIDE HEALTH CARE SYSTEM THAT PROVIDES HEALTH CARE SERVICES TO ALL PERSONS WHOSE DOMICILE IS COLORADO FOR ALL HEALTH-RELATED ISSUES, AND, IN CONNECTION THEREWITH, CREATING AN INTERIM AND THEN A PERMANENT BOARD OF DIRECTORS TO ADMINISTER THE COOPERATIVE; REQUIRING THE COOPERATIVE TO CONTRACT WITH HEALTH CARE PROVIDERS TO DELIVER SPECIFIC HEALTH CARE BENEFITS; ASSESSING A SIX PERCENT PAYROLL PREMIUM FROM EMPLOYERS, A THREE PERCENT PAYROLL PREMIUM FROM EMPLOYEES, COMPARABLE EMPLOYER AND EMPLOYEE PREMIUMS FROM SELF-EMPLOYED INDIVIDUALS, AND A NINE PERCENT PREMIUM ON OTHER SPECIFIED INCOME; ASSESSING PREMIUMS AT A LOWER RATE UNTIL THE COOPERATIVE ASSUMES FIDUCIARY RESPONSIBILITY FOR HEALTH CARE PAYMENTS; PLACING A CAP ON THE AMOUNT OF INCOME SUBJECT TO THE PREMIUMS; AUTHORIZING THE BOARD TO INCREASE THE PREMIUMS IN SPECIFIED CIRCUMSTANCES; AND REQUIRING THE DEPARTMENT OF REVENUE TO COLLECT AND TRANSFER THE PREMIUMS TO PAY FOR HEALTH CARE SERVICES PROVIDED THROUGH THE COOPERATIVE?" SECTION 3. The votes cast for the adoption or rejection of said amendment shall be canvassed and the result determined in the manner provided by law for the canvassing of votes for representatives in Congress, and if a majority of the electors voting on the question shall have voted "Yes", the said amendment shall become a part of the state constitution.