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J_HCE_2016A 08/24/2016 09:03:13 AM Committee Summary

Final

STAFF SUMMARY OF MEETING



COMMITTEE ON HEALTH CARE EXCHANGE

Date: 08/24/2016
ATTENDANCE
Time: 09:03 AM to 11:06 AM
Aguilar
X
Kefalas
X
Place: HCR 0107
Landgraf
E
Lontine
X
This Meeting was called to order by
Martinez Humenik
*
Representative Ryden
McCann
X
Sias
E
This Report was prepared by
Tate
*
Elizabeth Haskell
Lundberg
X
Ryden
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
Call to Order

Discussion with Connect for Health of Previously Raised Questions

Discussion with DOI of Previously Raised Questions

Presentation on Issue Related to Uncompensated Care

Committee Discussion and Bill Draft Ideas
Witness Testimony and/or Committee Discussion Only

Witness Testimony and/or Committee Discussion Only

Witness Testimony and/or Committee Discussion Only

Witness Testimony and/or Committee Discussion Only

Recommendation(s) Approved





09:04 AM -- Call to Order



Representative Ryden, Temporary Chair, called the meeting to order. A meeting agenda was distributed to the committee (Attachment A).



160824 AttachA.pdf160824 AttachA.pdf





09:03 AM -- Discussion with Connect for Health of Previously Raised Questions




Kevin Patterson, Chief Executive Officer, Connect for Health Colorado, provided a handout to the committee outlining his presentation on Connect for Health Colorado's response to questions about special enrollment periods (SEP) that were asked at the August 2, 2016, meeting (Attachment B). He explained the procedures and requirements for SEP. He told the committee that there is a national discussion around whether the federal marketplace and state-based exchanges should verify SEPs more aggressively. He explained that insurance carriers report that individuals who enroll in coverage using a SEP often have higher claims and many carriers believe that there is some misrepresentation on the part of these individuals about the circumstances that allow them to enroll using a SEP. Currently, the customer's attestation on the application for coverage that he or she qualifies for a SEP is the only verification required. Mr. Patterson explained that SEP verification could be accomplished in a variety of ways including: the exchange verifying documentation provided by all customers or verifying documentation provided by a subset of customers, or carriers verifying the documentation. In response to committee questions, Mr. Patterson stated that pregnancy is not currently considered as a triggering event for a SEP and only New York permits pregnancy to be considered for SEP purposes. Mr. Patterson responded to additional questions from the committee about SEP.



160824 AttachB.pdf160824 AttachB.pdf



09:16 AM



Committee discussion followed regarding consumers transitioning off of Medicaid and then looking for coverage through the exchange. Mr. Patterson discussed supports that are in place to help consumers utilize the exchange, such as certified application centers. Mr. Patterson clarified that consumers who seek insurance coverage after a SEP qualifying event are covered by the new insurance from the date of the qualifying event as long as the new insurance is purchased within 90 days.



09:25 AM -- Discussion with Division of Insurance of Previously Raised Questions



Commissioner Marguerite Salazar, Division of Insurance (DOI), told the committee that she and her staff will be discussing two issues: the inclusion of free standing independent birthing centers staffed by nurse midwives in provider networks, and the idea of allowing pregnancy to be a triggering event for an SEP. Commission Salazar explained that New York is the only state that allows pregnancy to trigger an SEP. She explained that since New York implemented this provision in January 2016 there is no data yet to show how allowing pregnancy to trigger an SEP will affect insurance rates.



09:28 AM



Matt Mortier, DOI, told the committee that all Colorado health insurance providers cover certified midwife services, but not all insurers include nurse midwives who are providing services in a free standing independent birthing center in their networks. Mr. Mortier explained that the issue that was raised at the previous meeting by a representative of Mountain Midwifery Center was that certain insurers were not contracting with this specific business. The representative stated that the center should be included in plans for network adequacy purposes. Mr. Mortier explained that network adequacy rules do not require insurers to contract with any willing provider nor with every type of provider. Mr. Mortier responded to questions from the committee about the number of nurse midwives that are covered by insurance providers. Discussion about direct-entry midwives and certified nurse midwives followed. Senator Lundberg discussed insurance coverage for direct-entry midwives.





09:35 AM



Senator Aguilar asked that DOI provide information about the areas of the state where residents have only one insurance provider offering health plans.



09:37 AM -- Presentation on Issues Related to Uncompensated Care



Amy Downs, Colorado Health Institute (CHI) and Edmond Toy, CHI, came to the table and provided a handout to the committee (Attachment C). Mr. Toy discussed the recent expansion of Colorado's Medicaid program. He explained that uncompensated care is care for which neither a patient nor an insurer pays for the services provided. He pointed out that undercompensated care is care for which the reimbursement rate does not cover the full cost of the care. Mr. Toy explained that hospitals often receive funding from government sources to help offset the costs associated with uncompensated care. He told the committee that between 2009 to 2013 Colorado hospitals provided about $700 million in uncompensated care annually. He stated that about two-thirds of uncompensated care was covered by government payments. Mr. Toy pointed out that the amount of uncompensated care provided by Colorado hospitals in 2014 was just over $300 million.



09:44 AM



Ms. Downs discussed the issue of cost shifting. She explained that cost shifting is the theory that inadequate reimbursements by certain payers forces providers to recoup losses by charging higher prices to other payers. She stated that many economists do not support the idea that hospitals shift the cost of uncompensated care to those who pay, but rather hospitals charge the price that commercial insurance companies are willing to pay. She discussed how this practice was a form of price discrimination, meaning that hospitals charge different prices to patients based on their willingness to pay.



Referring to slide 7 of the handout, Ms. Downs explained that in 2013 the uncompensated care provided by hospitals equaled 2.3 percent of private insurance spending and that, in Colorado in 2013, hospitals provided $700 million in uncompensated care which is equal to approximately 4 percent of the state's private insurance spending. Committee discussion followed about the amount of uncompensated care in previous years and the amount of reimbursement hospitals receive from different sources.



09:55 AM



Committee discussion continued about uncompensated care. Senator Aguilar referenced an article from the Denver Business Journal titled 2016 Hospitals by Uncompensated Care (bizjournals.com/denver/subscriber-only/2016/07/22/hospitals-by-uncompensated-care.html) regarding the amount of uncompensated care provided by Colorado hospitals in 2015.



Ms. Downs continued her presentation. She discussed how the payment-to-cost ratio for inpatient admissions has changed over time. She explained that both the payments hospitals receive for inpatient care and the cost of the care have increased. In response to questions from the committee, Ms. Downs pointed out that commercial insurers pay approximately 159 percent of the cost of care compared to care reimbursed by Medicaid which pays about 72 percent of the cost of care. She explained that the financial experience of each hospital varies and is dependent on payer mix and occupancy rate.





10:02 AM



Ms. Downs spoke about the factors that can drive cost increases in hospitals including, patient complexity, intensity of utilization, technology, administration, and capital construction. Committee discussion followed about payment-to-cost ratios and the cost of providing care to Medicare patients. Committee discussion followed about Medicare reimbursement rates. Ms. Downs concluded by stating the CHI asserts that there is mixed evidence that a cost shift exists in hospital markets, that compared with private health insurance spending the amount of uncompensated care is relatively small, and since passage of the Patient Protection and Affordable Care Act (PPACA), both payments to hospitals and the cost of care have increased.



10:13 AM



Chris Tholen, Colorado Hospital Association, provided a handout to the committee (Attachment D). He explained that the cost of health care is related to utilization, the number of items provided, and the cost of the items. He told the committee that Colorado spends less per capita on health care than the national average and comparable states. He stated that cost shifting does occur in hospitals and discussed the issues around cost shifting.



10:22 AM



Mr. Tholen continued his presentation and stated that the cost of charity care is determined by the cost of providing the care. He stated that undercompensated care affects the cost of private insurance more than uncompensated care. Discussion followed about the cost of care provided by hospitals. He stated that the cost of care includes the cost of using all of the resources available in a hospital. He stated that uncompensated care has been reduced, but undercompensated care has increased due to more people being covered by Medicaid or private insurance. Committee discussion followed about bundled payments and fee-for-service payments to hospitals by insurance companies.



10:35 AM



Mr. Tholen pointed out that if Medicare uses bundled payments there will be an escalation of bundled payments by commercial insurer since commercial insurers often follow the lead of Medicare. The committee members discussed bundled payments, third-party payers, fee for service payments, and policies for reducing utilization in a effort to reduce the cost of care. Mr. Tholen pointed out that the best way to reduce cost is to ensure that chronic conditions do not become acute conditions. The committee discussed challenges faced by rural hospitals including the inability of some rural hospitals in Colorado to offer maternity care since the high cost of this care can limit a hospital's ability to offer other types of care.



10:46 AM



The committee discussed hospitals offering quality care and marketing on service quality. Committee discussion followed about the process of hospitals and insurers negotiating reimbursement rates using the chargemaster, i.e. a list of the official rate charged by a hospital for procedures, services, and goods.





10:55 AM -- Committee Discussion and Bill Draft Ideas



Kristen Forrestal, Office of Legislative Legal Services, came to the table. Representative Ryden asked committee members for bill suggestions. Senator Kefalas suggested a bill allowing the state to offer a Basic Health Program insurance option in accordance with the PPACA. He explained that a Basic Health Program allows states to provide coverage to individuals who are currently over the income limit to qualify for state medical assistance programs, but whose income is below 200 percent of the federal poverty level.

BILL: Committee discussion and Bill Draft Ideas
TIME: 11:00:30 AM
MOVED: Kefalas
MOTION: Draft a bill that would allow the state to offer a Basic Health Program insurance option in accordance with the PPACA. The motion passed on a vote of 5-3.
SECONDED: Lontine
VOTE
Aguilar
Yes
Kefalas
Yes
Landgraf
Excused
Lontine
Yes
Martinez Humenik
No
McCann
Yes
Sias
Excused
Tate
No
Lundberg
No
Ryden
Yes
YES: 5 NO: 3 EXC: 2 ABS: 0 FINAL ACTION: PASS



11:06 AM



The meeting adjourned.