Time:09:02 AM to 04:00 PM
Place:HCR 0112
Kerr J.
This Meeting was called to order by
Senator Boyd
This Report was prepared by
Elizabeth Burger
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
Update on CoverColorado
Update by the Colorado Health Institute
SSI and SSDI Presentation
Update on Federally Qualified Health Centers
Transparency in Pharmacy Benefits
Patient Safety
Safe Cosmetics

09:04 AM -- Update on CoverColorado

Suzanne Bragg-Gamble, Executive Director, CoverColorado, began her presentation related to CoverColorado and its long-term funding. Three handouts concerning the program and its rates were distributed to the committee (Attachments A through C). Ms. Bragg-Gamble gave an overview of the CoverColorado program, describing its current enrollment levels and the premiums paid by participants in the program. She described the provisions of House Bill 08-1390, which implemented a new funding structure for CoverColorado. The bill also created a long-term funding task force to make recommendations on the long-term viability of the program. The task force made its recommendations in March. That report assumed that funding from the Unclaimed Property Fund would be sufficient to support its share of the program through 2014. However, with the economic downturn and the transfer of money from the fund to the state's General Fund, the funding formula created by House Bill 08-1390, and specifically the share provided by the Unclaimed Property Fund, will not be viable in two years. She described the recommendations of the task force, including that a reimbursement schedule be developed based on a multiple of Medicare rates, and that the insurance assessment currently charged to insurers regulated by the state be broadened to include either a fee assessed on third-party payers or a hospital fee. She described other methods that may be implemented to address the solvency of the program. She noted that the CoverColorado Board of Directors will be meeting in August and would like to return to address the task force regarding its recommendations after that meeting.

090811 AttachA.pdf 090811AttachB.pdf 090811AttachC.pdf

09:19 AM

Ms. Bragg-Gamble responded to questions from the committee regarding implementation of a new provider fee schedule and the rates currently paid to providers participating in CoverColorado. Dr. Christine Gilroy, President of the Board of Directors for CoverColorado, responded to questions from Representative McCann regarding whether or not the payment schedule proposed by the long-term funding task force would represent a cut in payments to providers. Ms. Bragg-Gamble responded to questions from Senator Foster regarding CoverColorado's contracts with insurance carriers. Ms. Barbara Crawford, legal staff to CoverColorado, responded to questions from Representative McCann regarding the premium assessment levied on health insurance carriers. Ms. Bragg-Gamble responded to questions from Senator Schwartz regarding the reserves maintained by CoverColorado.

09:42 AM -- Update by the Colorado Health Institute

Amy Downs, Director for Policy and Research at the Colorado Health Institute, began her presentation related to the Colorado Health Institute's Center for the Study of the Safety Net and the Health Professions Database Project. She distributed a packet of information to the committee (Attachment D). The goal of the Center for the Study of the Safety Net is to provide ongoing and reliable analysis of issues related to health care access for Colorado's population. The scope of the center's work includes: researching insurance coverage; estimating and describing the uninsured; assessing access to care issues; and producing an annual Safety Net Indicators and Monitoring System Report. She described the center's recent publications. Ms. Downs discussed data on the percent of eligible children enrolled in Medicaid and the Children's Basic Health Plan in Colorado. Ms. Downs gave an overview of the Safety Net Indicators and Monitoring System (SNIMS). The goal of the SNIMS is: to build data-driven reporting systems of statewide value; identify, describe, and monitor the ability of Colorado's safety net providers to meet primary health care needs of vulnerable populations; determine what variations exist among Colorado communities in the organization and financing of health care services; and inform policy makers about the changing dynamics of Colorado's safety net system. She described data on the total number of individual patients by type of safety net provider in Colorado in 2007. Community health centers were the largest providers of services in that year, serving over 390,000 patients.


09:54 AM

Ms. Downs described the Colorado Household Survey, which is designed to gather data on access to health care and insurance coverage, among other areas. She gave an overview of the data obtained through the survey regarding insurance status. Specifically, the survey gathered data on the duration of uninsurance for people who were uninsured at some point in the prior 12 months, and the uninsured population by age compared to Colorado's total population. Ms. Downs discussed a map showing the proportion of the population lacking health insurance in Colorado's counties.

10:01 AM

Ms. Downs gave an overview of the Health Professions Database project at the Colorado Health Institute. The Colorado Health Institute had conducted a number of surveys regarding health professions in Colorado, and she discussed survey information gathered from certified nurse assistants. She discussed the institute's involvement with a task force to study Alzheimer's disease and the long-term care workforce. Ms. Downs responded to questions from Senator Boyd regarding nursing workforce shortages and the lack of nursing training faculty as a contributing factor to the shortage.

10:14 AM

The committee recessed briefly.

10:27 AM -- Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) Presentation

The committee reconvened. Lynnae Flora, Director of Community Assistance with Jefferson County, began the presentation related to a 24-month waiting period for health care coverage provided in conjunction with Social Security Disability Insurance (SSDI). A packet of information was distributed to the committee (Attachment E). Ms. Flora outlined the problem. There is five-month waiting period for SSDI for a disabled individual, but Supplemental Security Income (SSI) is available immediately. If the disabled individual first receives SSI, he or she automatically qualifies for Medicaid. If the individual has worked enough quarters to qualify, he or she will then become eligible for SSDI at the end of the five-month waiting period. However, once a disabled individual is switched from SSI to SSDI, the individual loses the Medicaid benefit. The client must then wait for up to two years before becoming eligible for Medicare.


10:31 AM

Julie Reiskin, Executive Director, Colorado Cross-Disability Coalition, explained that the relationship between SSI and SSDI is complicated. SSI is an entitlement program while SSDI is an insurance program. She explained that for both programs, a disability is defined as the inability to work and that individuals have to wait five months to qualify for SSDI, even if there is no dispute that the individual is disabled. She discussed the time and energy necessary to apply for SSI and SSDI, stating that the process of proving disability is humiliating and degrading. She described the experiences that individuals who recently have become disabled may go through. She responded to questions from Representative Massey regarding the process of qualifying for SSI and SSDI. Senator Foster, Ms. Flora, and Ms. Reiskin discussed federal rules in place to prevent fraudulent activity and how those rules affect the ability of individuals to get services. The committee further discussed how disabled individuals obtain care during their two-year waiting period to qualify for SSDI.

10:56 AM

Jeanette Hensley, Director, Aging and Adult Services, Colorado Department of Human Services, further explained the SSI and SSDI programs. SSI is a federal cash assistance program that makes monthly payments to aged, blind, and disabled individuals who have limited income and resources. In Colorado, individuals who receive SSI benefits automatically receive Medicaid benefits. The SSDI program provides cash benefits to workers who have become disabled. She described a scenario in which a person attempts to qualify for SSI and SSDI and the benefits provided through the programs. Individuals who are determined to be eligible for SSI are eligible to have their Medicaid benefits backdated for five months. She described the number of individuals who are enrolled in SSI and SSDI in the state, noting that as many as 40,000 individuals in Colorado may be eligible for, but not be receiving, SSI benefits. An estimated 39,000 individuals may be eligible for SSDI but be not receiving benefits. She described a spreadsheet showing the costs to the state Medicaid program of disabled individuals who are in their 24-month waiting period.

11:10 AM

Ginny Brown, Legislative Liaison, Colorado Department of Health Care Policy and Financing, stated that it is possible that funding from House Bill 09-1293, which implemented a fee on hospitals to be matched with federal funds to expand health care programs, may be able to absorb some of the costs of covering these individuals through Medicaid. She discussed the waivers that will be written to expand public health care coverage as a result of the bill. Panel members and Representative Kerr discussed the costs of caring for individuals who are in the 24-month waiting period. Senator Boyd suggested writing a letter of support to Colorado's congressional delegation on the issue. The committee agreed to draft such a letter. Representative Frangas asked for an estimate of the costs of expanding Medicaid coverage to individuals who are waiting for Medicare coverage through SSDI, and Ms. Brown responded that the Department of Health Care Policy and Financing is working on creating an estimate. Ms. Reiskin asked that the committee include in its letter a suggestion that the definition of disability be disconnected from employment.

11:26 AM -- Update on Federally Qualified Health Centers

Polly Anderson, Policy Director, and Katie Jacobson, Policy Manager, Colorado Community Health Network (CCHN), began their presentation regarding Colorado's community health centers (CHCs) and distributed a packet of information to the committee (Attachment F). Ms. Jacobson explained that CCHN represents Colorado's 15 community health centers. Community health centers are nonprofit providers of medical, dental, and mental health services. The centers provide comprehensive primary care on a sliding fee scale based on ability to pay. Community health centers receive federal funding through grants, which comprise approximately 17 percent of their budgets. In addition, the centers receive reasonable cost reimbursement for Medicaid services. Under the recent federal State Children's Health Insurance Program (SCHIP) reauthorization legislation, states are required to reimburse community health centers for Children's Basic Health Plan Services the same as they do for Medicaid.


11:35 AM

Ms. Anderson described state funding sources for community health centers, including the Primary Care Fund (which is funded with tobacco tax moneys), Colorado Indigent Care Program funds, Comprehensive Primary and Preventative Care grants (which are funded from the tobacco settlement), and Cancer, Cardiovascular and Pulmonary Disease grants (which are funded with tobacco tax moneys). Ms. Anderson described recent cuts to community health center funding. Ms. Anderson stated that the sunset of Referendum C in 2010 will result in a 75 percent cut to the Colorado Indigent Care Program Community Clinic Provider Reimbursement Pool. Ms. Anderson described the effect of the economic downturn on the demand for services through community health clinics and the funding allocated to community health centers through the federal stimulus act, the American Recovery and Reinvestment Act. The stimulus act provided about $2 billion nationally over two years for CHCs. She noted that one Colorado community health center received a $1.3 million federal grant for a mobile health center. In addition, Colorado's health centers received $7.5 million in grants to respond to the increased demand for services and a total of $16.8 million in one-time capital improvement grants. Many community health centers have also applied for Facility Investment Program grants for capital improvement needs. The Colorado Health Foundation has also announced a $20 million investment in community health centers to maximize the federal stimulus moneys. In upcoming months, it may be possible for the centers to obtain health information technology grants. Ms. Anderson explained that the federal stimulus act further provided $500 million for primary care workforce development programs. She explained that these moneys are used to fund loan repayment programs, and will help to more than double the primary care workforce that is placed in the state. Senator Schwartz asked for additional information on the budget cuts experienced by community health clinics. Representative McCann asked for more information on how the expiration of Referendum C will affect funding for community health clinics.

11:57 AM

Ms. Anderson noted that the federal stimulus funds are temporary and are not a permanent part of the federal budget. She said that clinics are creating plans for ensuring that the new operations costs for the clinics can be sustained over time. She described the Access for All Colorado Plan, which is the CCHN's plan to double the number of people in Colorado over the next 20 years who are able to have their primary care needs met because they have access to a community health center. Under the plan, 410,000 more Coloradoans could be served over five years. The cost would be approximately $210 million in capital expenses, and $473 million in general operating moneys. An additional 331 health care providers would also be necessary. She discussed the importance of maintained state funding for health care centers. The committee recessed.

01:33 PM -- Transparency in Pharmacy Benefits

The committee reconvened. Brad Young, Rx Plus Pharmacies, began his presentation related to pharmacy benefit managers (PBMs) and distributed four handouts to the committee (Attachments G through J). He asked the committee to request an audit of PBMs that provide services to the state and referenced findings from a similar audit in Texas. Mr. Young then discussed the Health Care Task Force meeting from 2005 concerning pharmacy benefits. He said that PBMs are a middleman between patients, pharmacies, and employers. According to Mr. Young, PBMs are unregulated as far as their financial operations, but are regulated concerning mail-order operation. Mr. Young discussed other states' efforts to regulate PBMs. In response to Senator Foster's question, Mr. Young described PBM's as managing a pharmaceutical benefit for an insurance company or self-funded company. PBMs are the entities that pay the pharmacy on behalf of the insurance company. Representative Massey asked if independent pharmacies contract with PBMs. Mr. Young said that contracts are done between pharmacies and the PBM and are negotiated by the independent pharmacy or a chain pharmacy. Mr. Young described Senate Bill 06-164, which would have created certain disclosure and regulatory requirements of PBMs, and reiterated his support for an audit of PBMs that contract with the state. Representative Kerr asked who would conduct the audit and how the audit would be requested. Mr. Young described the audit process and goals, and expressed his desire for the committee to request the audit. Representative Kerr further discussed the audit process and how an audit is considered by the audit committee and assigned to an auditor or an outside contractor.

090811AttachG.pdf 090811AttachH.pdf 090811AttachI.pdf 090811AttachJ.pdf

01:49 PM

Mr. Young introduced a video presentation by Dr. Mark Riley from the National Community Pharmacists Association. Dr. Riley described his work with a PBM in Arkansas and gave an overview of the history of the PBM industry. Dr. Riley described the various costs involved in filling a prescription, including the cost of the drug, profit to the pharmacy, and costs associated with middlemen and administration. He discussed the rise in the percentage of health care costs that go towards prescription drugs and how that affects the costs to employers that provide health benefits. He described how pharmaceutical costs are going up, but pharmacists are getting paid less, and noted his belief that this is due to PBMs.

02:05 PM

Mr. Young introduced the next section of the video, in which Dr. Riley discussed the spread between the amount of money a pharmacist is paid for providing a drug and the amount that the PBM bills the insurance company. According to Dr. Riley, these costs are set according to a schedule and the difference in these costs is profit for the PBM. Dr. Riley described the incentive for PBMs to pay pharmacies less for filling prescriptions to increase the spread, and how this lack of compensation puts more pressure on pharmacists to fill brand name drugs rather than lower-cost generic drugs. Dr. Riley discussed the need to eliminate spread pricing and provide greater transparency in pricing.

02:16 PM

Mr. Young introduced the next segment of the video concerning rebates. Representative Kerr asked about the time frame before a generic drug is available. Val Kalnins, Executive Director of the Colorado Pharmacists Society, came to the table and stated that it can take 17 years from the time the drug is developed and tested. The drug might be on the market from 5 to 10 years, depending on how long the testing and safety review takes. Representative Frangas asked why independent pharmacies are concerned about PBMs. Mr. Young said that PBMs put mandatory mail order requirements in contracts, and described the Texas audit results on unfair mail order tactics. Representative Frangas asked why there is not an effort to introduce legislation on mail order, and Mr. Young said that it is more important to pursue transparency in pricing. Mr. Young said that 85 percent of drugs go through an insurance claim of some sort, and that pharmacists are getting smaller and smaller reimbursements.

Senator Foster asked when PBMs were enacted, and Mr. Young said that PBMs came about as a business practice and originally operated as a processing system for prescription payments. Senator Foster then asked how Senate Bill 09-166, which would have created the Prescription Drug Ethics Act, relates. Mr. Young said that PBMs provide a check on pricing, manage information, and centralize data on patients, but that he is concerned that there needs to be a check on how the information is used. Representative Kerr asked about laws in other states concerning pharmacy audits and why Colorado should undertake an audit. Mr. Young said that he would like PBM contracts with the State of Colorado to be audited just like in Texas, and that representatives from PBMs and pharmacists should be included in the audit process. Representative Frangas asked how state agencies would know about PBM practices. Mr. Young said that the auditor would have to find information that is in the contracts and other information on PBM financials.

02:36 PM -- Patient Safety

Dr. David West, Colorado Patient Safety Coalition, introduced his organization and described its mission to foster a culture of patient safety. His organization has more than a thousand participants, including patients, hospitals, medical liability managers, and others. He described the Colorado Patient Safety Organization as an independent broker of information that brings the different groups together to discuss and improve safety. He shared a document with the committee on medical errors and resulting deaths and costs (Attachment K). Dr. West said that the public is concerned with patient safety and that many individuals have experiences regarding medical errors. He described organizing a leadership task force to reduce medical errors and increase patient safety. Dr. West described his organization's agenda as embedding patient safety in health care culture, coordinating health care when transitioning between care settings, and fostering the creation of a patient safety organization.


Donna Kusuda, Rocky Mountain Patient Safety Organization (PSO), described her role with the PSO and the Colorado Hospital Association (CHA). She provided handouts to the committee concerning the PSO and the CHA's safety initiatives (Attachment L). She discussed the CHA's initiatives such as the hospital safety report card, color coding hospital wrist bands, standardizing emergency room hospital codes, and implementing the World Health Organization surgical checklist. She also described the CHA board's role in forming the Rocky Mountain Patient Safety Organization. She gave background information on federal law concerning the reporting of adverse events and the creation of patient safety organizations. She described the process of sharing and analyzing information within a PSO and medical liability concerns, and discussed how previously providers could not share information on adverse events out of concern for liability. She stated that providers can now participate and share information freely to promote best practice and safety improvements. She described the process for reporting incidents to the PSO and analyzing the data. She said that most PSOs focus on hospital providers, but she said her goal is to include all types of providers, and that the focus on patient safety should include all types of care settings. She discussed regional efforts to include other states in the initiative in order to get more complete data. She discussed how patient safety organizations can benefit patients, providers, and medical liability companies, and promote collaboration and improved safety.


03:00 PM

Representative McCann thanked Ms. Kusuda and asked about the PSO's goals in analyzing data. Ms. Kusuda described how data can be analyzed to provide conclusions and guidance to providers. Senator Schwartz asked about protections from discovery and disclosures. Ms. Kusuda said that there are rules about how information can be shared in order to maintain confidentiality and that there is some data that can be released publicly. Senator Foster asked about the level of detail shared about providers who report incidents. Ms. Kusuda said that information on the providers who commit errors can be shared with their permission. Senator Foster asked why it is in the provider's interest to share information on adverse events with the PSO. Ms. Kusuda said that many providers want the analysis, and to know what trends exist among providers. Senator Foster asked what the PSO's responsibility was to the public for facilities that have poor records of safety. Ms. Kusuda said that the PSO is a provider service organization and that her duty is to tell the provider that their record is outside the norm.

03:08 PM

Judy Ham, United Cerebral Palsy of Colorado, began her presentation on birth injuries. A handout was distributed to the committee (Attachment M). She said that when an adverse incident takes place, it is a very upsetting event and that the medical liability system does not always provide recourse. She said that compensation through the medical liability system is unpredictable and inequitable, and that the medical liability system does not always promote safety improvements since many medical errors are not even reported. Ms. Ham discussed a pilot project for compensation and liability that her organization is developing. Senator Boyd asked if a large portion of malpractice claims are from birth injury cases. Ms. Ham said that claims only result from a small portion of errors and that not all incidents are the result of negligence. She stated that it is difficult to assign fault in some situations and that there is a need to gather data to better understand the issue. Dr. West said that birth is an emotional time and that if something seems to go wrong it can result in a claim. Senator Schwartz said that there are many costs that result from extra tests done due to liability concerns and asked if there could be some way to reduce these costs. Ms. Ham said that her focus is on helping the child and trying to improve the outcomes for the child. Dr. West said that about $17 billion a year could be saved from preventable medical errors, in addition to the emotional costs, and that the biggest cost is from follow-up care after an error rather than from extra testing. Representative McCann asked about health courts. Ms. Ham said that they haven't really talked about health courts when planning their pilot program and that they are focusing on getting compensation and accountability.


03:29 PM -- Safe Cosmetics

Brittney Wilburn, the Women's Lobby, began her presentation on safe cosmetics and personal care products and distributed a handout to the committee (Attachment N). She said that many personal care products that are commonly used contain toxic chemicals, some of which have been linked to diseases such as breast cancer. She said that 100,000 synthetic chemicals have been produced and put on the market since World War II, and only 11 percent have been tested for safety. She described chemicals that have been linked to breast cancer. Ms. Wilburn listed several other chemicals that are found in products and said that people are constantly exposed to these types of chemicals. Ms. Wilburn said that the chemicals in personal care products are unregulated. She discussed the efforts her organization supports, including public education campaigns. She described recent legislation enacted in California and local efforts and interests in Colorado concerning safe personal care products. She highlighted 35 companies in Colorado that have signed the Compact for Safe Cosmetics, and how business for these environmentally friendly companies is growing. Ms. Wilburn described some options for legislation, including setting safe packaging standards, banning certain chemicals, and requiring warning labels for products that have chemicals that cause cancer or birth defects.


03:45 PM

Senator Foster commended the speakers and expressed concern about regulation. She said that the information available on the internet can help consumers without having regulation. Jennifer Miles, the Women's Lobby, said that there has been an effort on public education, but that it takes a lot of effort for consumers to look for harmful ingredients and not all companies make information on ingredients regularly available. Ms. Miles described efforts at regulation and disclosure in the European Union. She said the industry wants to use the cheaper synthetic ingredients, and that, at a minimum, there needs to be better labeling. Representative Massey discussed labeling requirements. Senator Schwartz stated her support for labeling requirements, noting her belief that people need to be able to understand what they have a reaction to or what chemicals may make them ill. Representative Kerr discussed the need for public education about these issues. Ms. Miles agreed that more education needs to be done and noted that there is evidence that connects certain chemicals to breast cancer .

04:00 PM

Senator Boyd adjourned the meeting.