Health care exchanges challenged in Denver

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Colorado’s hospitals are expecting a legislative session with few health care bills — but that doesn’t mean they don’t have some concerns.

Rep. Marsha Looper has filed a bill that seeks to repeal health benefit exchanges, if the Affordable Care Act, the federal law mandating individuals purchase health insurance — is decided to be unconstitutional.

Hospitals aren’t worried about losing the exchanges, but they are, however, keeping an eye on Medicare and Medicaid reimbursement levels. In addition, they are seeking to combine regulations regarding hospital buildings.

Exchanges

Senate Bill 53 is basically a nod to the Tea Party faction of the Republican party, said John Suits, associate administrator for government affairs at Memorial Health System.

“It’s a token bill,” he said “There were groups who were very opposed to it, and this is a nod to them. There’s no chance of it passing.”

Last year’s Senate Bill 200 created the basic infrastructure for the health benefit exchanges. In the past year, Colorado has structured its health exchange so it is largely independent of the federal government.

“We totally support the exchanges,” said Stephannie Finley, president of governmental affairs and public policy for the Greater Colorado Springs Chamber of Commerce. “We think that the committee in place did a great job this summer, and we think that the state is well on its way to creating something that is great for businesses.”

Finley said Colorado exchanges were on Utah’s exchanges, which started pilot programs in 2010 and opened to all businesses in 2011. Currently, Utah has nearly 250 small employer groups participating, covering more than 5,500 people.

Unlike other models, both Colorado and Utah exchanges focus on a consumer-based system, giving people more control over their health care dollars. The exchanges will serve as a single shopping point to evaluate options, and it gives insurance brokers and employers access to reliable information for side-by-side comparisons.

“We support the exchanges, because they allow small businesses to pool together to reduce risk and lower the premiums,” Finley said. “There’s no way we can support a repeal.”

The effort to repeal the law that created the exchanges is politically motivated, she said.

“People wrongly connected it with ObamaCare,” Finley said. ‘The state has built these exchanges so they are able to operate independently of federal health reform.”

Even the National Federation of Independent Business, which is part of a lawsuit the Supreme Court will hear against the Affordable Care Act, is in favor of exchanges.

The Colorado Hospital Association opposes any effort to repeal legislation that moved the state forward in implementing health care reform, said president Steven Summers.

“We’ve been working on this since Gov. Ritter,” he said. “And these private marketplaces are an essential way to get insurance to the uninsured. We’re keeping an eye on the legislation — and if any more comes up we’ll definitely act on it.”

However, chances of Senate Bill 53 getting out of committee in the Senate are very slim. The health and human services committee is chaired by Betty Boyd, the co-sponsor of the original bill that started the health care exchanges.

Reimbursement rates

But while hospitals aren’t very worried about the exchange bill, they are keeping a close eye on how the state government responds to a judge’s decision that said the state must spend more on education.

“If that decision stands — and it is being challenged — we think the money will come from reimbursement rates,” Suits said. “And that has us very concerned. The extra money has to come from somewhere.”

Known as the Lobato decision, a state district court judge ruled in favor of more education funding, saying that the amount of money paid for K-12 education was “unconscionable.”

The suit was filed in 2005, when plaintiff Taylor Lobato was in sixth grade. He’s now a sophomore at Denver University. The suit was filed claiming that state funding for public education was inadequate. Late last year, Judge Sheila Rappaport agreed.

“Unquestionably, additional financial resources appropriately applied can improve student achievement,” she wrote in the decision, “which, under the standards-based system, is the ultimate measure of the success of a thorough and uniform system of public education.”

But while schools are celebrating the win, hospitals are wary.

“We think they’ll look at the reimbursement levels, because that’s all they can look at,” Suits said. “The Affordable Care Act says they can’t change enrollment criteria or enrollment levels.”

Medicaid in Colorado has seen record growth since the recession started in 2008. According to state figures, more than 614,000 people are now on the Medicaid rolls, an increase of 48 percent since Jan. 2007.

For Memorial, lower reimbursement levels will affect their bottom line. The city-owned hospital sees the majority of Medicaid, TriCare and indigent patients in Colorado Springs.

“We know the Colorado Hospital Association is also watching what happens,” Suits said. “And we expect that we’ll have to argue to keep reimbursement levels where they are, if it comes to that.”

For his part, Summers said the state was among the best in the nation in making sure people were covered under Medicaid. He said the association would work to maintain the current reimbursement levels.

“We want people to know that the burden of balancing the state budget shouldn’t be on the backs of Medicaid patients,” he said. ‘We all know that people who aren’t enrolled in Medicaid cannot pay their bills — and there is a cost shift of those payments to people with insurance. We need to avoid that.”

In the meantime, Colorado Gov. John Hickenlooper has said the state will appeal the lower court’s ruling to the Colorado Supreme Court.

Building codes

The big item for the legislative session for the Colorado Hospital Association — building codes and enforcement.

Hospitals currently must have their new buildings approved by several state agencies, with too much duplication and not enough cooperation, Summers said.

“We want to do what Gov. Hickenlooper suggested — and move all the enforcement and regulation to a single department,” he said. “We’re not trying to walk away from public safety codes for buildings, but we do want to have some consistency and remove the duplication.”

Right now, several state and local agencies must approve a hospital’s new buildings. The association wants all the responsibility to go to the Department of Public Safety.

“They already have the track record,” he said. “And they really are the ones who should be responsible.”

The lack of coordination between state agencies — and frequent differing interpretations in the laws — means that hospitals face delays in getting new buildings open.

“That’s costly,” Summers said. “And we don’t want anything that’s going to drive up the cost of health care. Unnecessary delays and unnecessary duplication will drive up the costs.”