Colorado Capitol Report

Governor’s Top Advisor to Brief The Colorado Chamber Energy and Environment Council on Oil-and-Gas Task Force on February 5th

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Governor’s Top Advisor to Brief CACI Energy and Environment Council on Oil-and-Gas Task Force on February 5th

Alan Salazar

Alan Salazar

Alan Salazar, a top advisory to Governor John Hickenlooper, will discuss the work of the Governor’s Oil and Gas Task Force on February 5th when the CACI Energy and Environment Council meets at 12 Noon in the CACI Office.

Salazar will discuss the progress of the Task Force and possible bills that may be introduced this session.  Salazar is Chief Strategy Officer and Director of the Office of Policy and Research, the Office of Legislative Affairs and the Office of Communications for the Governor.

The “Task Force on State and Local Regulation of Oil and Gas Operations” is to present its recommendations to the Governor by February 27th.  The Governor created the Task Force in early September with an Executive Order.  The 21-member Task Force includes representatives from the oil-and-gas industry, local governments, environmental organizations, agriculture and civic organizations.

The Task Force was given this charge by the Governor:

  1. The Task Force shall identify and strive to each agreement on recommendations for policy or legislation to harmonize state and local regulatory structures as to activities associated with oil and gas operations with particular focus on the following objectives:
  2. the benefit of oil and gas development on the state’s economy;
  3. protecting public health, water resources, the environment and wildlife;
  4. avoiding duplications and conflict between state and local regulations on oil and gas activities; and
  5. fostering a climate that encourages responsible oil and gas development.

The Task Force can make recommendations to the Governor and legislature with a two-thirds majority–or issue majority and minority opinions.

The Task Force has already held a series of meetings around the state.  The final meeting is scheduled for Monday and Tuesday, February 2nd and 3rd, at the Colorado Convention Center in Denver.

For news coverage of the Task Force, read:

“Colorado county commissioners say they have enough local control over oil and gas,” by Cathy Proctor, The Denver Business Journal, December 16th.

“Colorado Oil and Gas task Force hears Western Slope voices,” by Nancy Lofholm, The Denver Post, December 10th.

“Colorado oil, gas task force begins outlining key issues in land use conflict,” by Mark Jaffe, The Denver Post, November 11th.

“First meeting of Hickenlooper’s task force digs into local control of oil and gas operations,” by Cathy Proctor, The Denver Business Journal, September 25th.

“Colorado Gov. Hickenlooper names 19 to new oil and gas task force on local control,” by Cathy Proctor, The Denver Business Journal, September 9th.

“Colorado’s fracking debate calms; both sides agree to Hickenlooper deal,” by Cathy Proctor, The Denver Business Journal, August 5th.

Senate Sends Two Health Insurance Exchange Bills to House; House Kills Bill to Repeal Exchange

On Tuesday, the Senate gave bipartisan, final Third Reading passage to two bills concerning Connect for Health Colorado, the health insurance exchange established under the aegis of the Federal Affordable Care Act.  The two bills, which would provide more legislative oversight of the controversial exchange, have gone to the House.

Meanwhile, a House bill that would have repealed the exchange died in a House committee yesterday.

In the Senate, one bill, which would authorize a full-scale audit of the exchange, received unanimous, bipartisan support.

The other bill, which would allow a legislative oversight committee to approve bonuses for staff of the exchange, was supported by the Republican majority but split the Democratic minority with eleven members voting in opposition.

In 2011, CACI and other business organizations supported the bill, SB-200, which created the exchange.  The exchange opened for business in October 2013.  In December, the State Auditor’s Office released a “limited performance audit” of the exchange that was highly critical of the exchange’s financial operations.

SB-19 has bipartisan sponsors: Senators Jerry Sonnenberg (R-Sterling) and Cheri Jahn (D-Wheat Ridge).  The House sponsor is Representative

Yesterday, the CACI HealthCare Council endorsed the proposal.

Here’s the fiscal note’s summary of the bill:

The bill, recommended by the Legislative Audit Committee, gives the Office of the State Auditor (OSA) the authority to conduct a full performance audit of the Colorado health benefit exchange (Connect for Health Colorado). Upon completion of a performance audit, the OSA must submit a written report to the Legislative Audit Committee with any findings and recommendations.  Performance audits of Connect for Health Colorado may be conducted at the discretion of the state auditor.

The Senate approved SB-19 on a unanimous 35-to-0 vote, sending it to the House.  On Monday, the House debated, amended and gave preliminary, Second Reading approval to the bill.  On January 21st, the Senate Committee on Health and Human Services amended and passed the bill on a bipartisan, unanimous 5-to-0 vote.

The bill has been assigned to the House Public Health Care and Human Services Committee, but it has not yet been calendared for a hearing.

SB-52

In the form that the Senate passed, SB-52 would require legislative approval of bonuses for the exchange staff.

The measure, sponsored by Senator Larry Crowder (R-Alamosa), garnered the support of six Democrats in addition to that of the 18 Republicans: Kerry Donovan (Wilcott), Mary Hodge (Brighton), Matt Jones (Louisville), John Kefalas (Fort Collins), Mike Merrifield (Colorado Springs) and Nancy Todd (Aurora).

Vocal opponents of the bill included Senator Rollie Heath (D-Boulder) and Senator Iren Aguilar (D-Denver).

SB-52 was assigned to the House Health, Insurance and Environment Committee, but it has not yet been scheduled for a hearing

The bill’s fiscal note summarized the introduced measure this way:

This bill requires that the Legislative Health Benefit Exchange Implementation Review Committee (review committee) approve all salary increases, bonuses, or other additional monetary benefits for employees of the state’s health benefit exchange (Connect for Health Colorado).  Approval must be given in advance of the employee receiving the payment or benefit.

SB-52 was amended and approved by the Senate Health and Human Services Committee on a partisan, three-to-two vote, on January 21st.  The amendment states that the Review Committee can only approve bonuses for exchange staff.  The Senate then debated, amended and passed the bill on preliminary, Second Reading on Monday.

The CACI HealthCare Council yesterday took a neutral/monitor position on the bill.

HB-1066

Meanwhile, a third exchange bill died yesterday afternoon in the House Health, Insurance and Environment Committee on a partisan 7-6 vote.

HB-1066, sponsored by Representative Janak Joshi (R-Colorado Springs), would have abolished the exchange effective January 1, 2016.   Representative Joshi has sponsored similar bills in past legislation sessions.

According to the bill’s fiscal note, any “unencumbered moneys,” which could have been up to $1.3 million, would have been be transferred to the state General Fund.

Yesterday mid-day, the CACI HealthCare Council took a neutral/monitor position on the bill.

Exchange audit

Here is the summary of the State Auditor’s Office’s “limited performance audit” of the exchange, including three key recommendations:

CONCERN

We found that Connect for Health Colorado has not sufficiently ensured that public funds have been spent in accordance with federal requirements, that staff follow internal financial and accounting policies and procedures consistently, and that financial controls adequately safeguard its resources as its last federal grant enters its final stage and the organization moves to become self-sustaining.

BACKGROUND

 Connect for Health Colorado was created in 2011 pursuant to the federal Affordable Care Act that requires all states to either have a state-run health exchange or use the federal health exchange.

 Connect for Health administers Colorado’s health exchange that consumers can use to purchase private health insurance.

 Connect for Health was awarded $177.7 million in federal grants to implement Colorado’s health exchange. As of September 2014, it had spent $136.5 million of these federal grant funds.

 Connect for Health is overseen by a 12-member Board of Directors appointed by State government, and is administered on a day-to-day basis by an Executive Director/CEO.

KEY RECOMMENDATIONS

Connect for Health Colorado should:

 Establish comprehensive procurement and payment policies and procedures, document purchases prior to payment, monitor payments to contractors, and obtain Board approval for contracts in line with federal requirements.

 Establish policies for administering its grant program, pay grantees accurately and in compliance with federal requirements and grant contracts, and evaluate whether to continue making advance payments to grantees.

 Improve internal controls over accounting and financial transactions to ensure compliance with applicable laws, regulations, and internal requirements.

Connect for Health agreed with all of the recommendations.

For new media coverage of this issue, read:

“Effort to kill Connect for Health Colorado gains steam but falls short,” by Ed Sealover, The Denver Business Journal, January 29th.

“Colorado House health committee kills bill to repeal insurance exchange,” Electa Draper, The Denver Post, January 29th.

“Colorado Senate OKs two bills increasing health exchange oversight,” by Ed Sealover, The Denver Business Journal, January 27th.

“Republican lawmakers attempt to repeal state health insurance exchange,” by Electa Draper, The Denver Post, January 26th.

“First legislative attacks on Colorado health benefit exchange get OK,” by Ed Sealover, The Denver Business Journal, January 21st.

“Colorado’s health-insurance exchange faces state lawmakers after critical audit,” by Ed Sealover, The Denver Business Journal, January 15th.

“Audit of Colorado health exchange finds accounting faults,” by Mark Harden, The Denver Business Journal, December 8th.

For information on these two bills and the work of the CACI HealthCare Council, contact Dan O’Connell, CACI State Governmental Relations Representative, at 303.866.9622

CACI HealthCare Council Holds First Meeting of Session, Takes Action on Bills

Yesterday, the CACI HealthCare Council convened for its first meeting in 2015.  To begin this meeting, CACI members were joined by top-level staff from Connect For Health Colorado to discuss the status of operations at Colorado’s health insurance marketplace.  Kyla Hoskins, Manager of Policy and External Affairs, and Marcia Benshoof, Chief Strategy and Sales Officer, presented updated enrollment information; as well details of Connect For Health Colorado’s efforts to improve existing systems, increase enrollments and streamline the customer experience as Coloradans seek out insurance coverage via the health exchange marketplace.

Kyla noted that, as of the beginning of the 2015 plan year, 126,758 individuals had been covered via the Individual Marketplace.  An additional 883 individuals had been covered via the Small Business Marketplace in addition to the 1,868 Coloradans received health insurance coverage via the Small Business Marketplace during the 2014 plan year.  For additional information please see the Connect For Health Colorado Slide Deck here.

Now into the fourth week of the 2015 legislative session, Colorado lawmakers have already introduced numerous bills whose passage would impact the health-care industry.  Including legislation regarding the Colorado health exchange, the Council discussed more than ten health industry-related bills and established active Council support or oppose positions on three bills.

The CACI HealthCare Council voted to support HB-15-1029, Concerning Health Care Services Delivered Via Telehealth, sponsored by Reps. Buck and Ginal in the House, and Sen. Kefalas in the Senate.  The legislative bill summary includes the following information:

. . . the bill removes the population restrictions and precludes a health benefit plan from requiring in-person care delivery when telemedicine is appropriate, regardless of the geographic location of the health care provider and the recipient of care. A provider need not demonstrate that a barrier to in-person care exists for coverage of telemedicine under a health benefit plan to apply.

Broadly, this bill clarifies existing statues regarding the authority of health care providers and insurers to utilize “telehealth” services and reimburse for such services.  “Telehealth” is the term for when health care services are provided via telecommunications systems.  Advancements in technology have fueled the increased utilization of telehealth services within the health care industry, both as a tool to increase access among underserved populations, and to facilitate the delivery of a wide range of health services.  The legislation passed the House via a bipartisan vote of 58-6, with one lawmaker absent, and now moves to the Senate.

The Council voted to oppose HB-15-1083, Concerning Patient Contributions for Physical Rehabilitation Services, sponsored by Rep. Primavera and Sen. Crowder.  The legislation’s bill summary note states:

The bill prohibits an insurance carrier from classifying an office visit for physical rehabilitation services provided by a physical therapist, occupational therapist, or chiropractor as a specialty service. The bill limits the copayment that may be charged for physical rehabilitation services to 50% of what the provider is paid for the visit by the carrier.

The introduction of this bill represents a very similar version of legislation (HB-1108) that CACI opposed during the 2014 legislative session due to concerns that if passed, the legislation would limit health insurers’ flexibility to implement cost-sharing measures that help to keep down health-care premiums.  CACI asked Governor Hickenlooper Administration to veto this legislation after it passed the legislature.  Ultimately, the Governor Hickenlooper vetoed the bill.  This year’s legislation is scheduled to be presented before the House Health, Insurance, and Environment Committee next Thursday, February 5th.

The Council voted to oppose SB-15-123, Concerning a Patient’s Ability to Choose The Pharmacy at Which to Fill a Prescription for Certain Drug Order for Certain Medications, sponsored by Senator Crowder and Representative Primavera.

CACI established a Neutral-Monitoring position on SB-15-071 – Concerning the Ability of a Pharmacist to Substitute an Interchangeable Biologic Drug for a Prescribed Biologic Product When Certain Conditions are Met.  This bill is sponsored by Sens. Jahn and Hill and Reps. McCann and Landgraf.   The bill addresses the circumstances under which pharmacists are permitted to substitute a follow-on biologic product that meets Federal Food and Drug Administration standards for “interchangeability” – termed a “biosimilar” drug – for the original innovator biologic drug.  An amended version of the legislation passed the Senate Health and Human Services Committee yesterday and the bill now moves to the Senate floor for debate.

CACI took a neutral/monitoring position on the following bills:

  • SB-52 (Crowder) – Health Benefit Exchange Staff Bonus Review by Legislative Committee
  • HB-1066 (Joshi/Lundberg) – Repeal of Colorado Health Benefit Exchange
  • SB-74 (Neville / Joshi) –Transparency of Health Service Costs Paid Directly by Patients
  • SB-15 (Kefalas/Primavera) – Mental Health Parity for Autism Spectrum Disorders

For information on the work of the CACI HealthCare Council, contact Dan O’Connell, CACI State Governmental Relations Representative, at 303.866.9622.

Senate Committee Votes to Kill Pay Equity Commission but House Moves to Continue It

Photos by Evan Semón

Loren Furman and Representative Danielson

Despite a Senate Committee’s successful effort to sunset the Colorado Pay Equity Commission, proponents of continuing the Commission did not give up, and a fast-moving bill in the House cleared its first hurdle when it was passed by a committee yesterday afternoon.

CACI supported the Senate committee’s effort to not reauthorize the Commission, which is housed in the Colorado Department of Labor and Employment (CDLE).

HB-1133 was introduced Monday by its sponsor, Representative Jessie Danielson (D-Wheat Ridge), who enlisted the other 32 Democrats in the Chamber as co-sponsors on her bill.

The bill was “fast-tracked” to the House Business Affairs and Labor Committee and on Wednesday was placed at the top of the Committee’s agenda, ahead of three other bills that were already on the agenda.

The Committee voted on a party-line, 7-6 vote, to send the measure to the House Appropriations Committee.  CACI opposes HB-1133.

The bill’s fiscal note summarizes the proposal:

This bill continues the 11-member Pay Equity Commission in the Colorado Department of Labor and Employment (CDLE). Under the bill, the commission is:

  • authorized to solicit gifts, grants, or donations directly;
  • allowed to employ or contract up to 1.0 FTE employee or contractor for purposes of performing its duties if it receives sufficient funds through gifts, grants or donations; and
  • required to monitor the status of pay inequity in Colorado and provide updates in its annual reports.

Loren Furman, CACI Senior Vice President, State and Federal Government Relations, testified before the Committee in opposition to the bill.   Here’s an edited version of Loren’s prepared remarks:

First, let me say that I recognize the work of the Commission and we are very familiar with this issue from the time this bill passed creating the Commission in 2010 back to 2007 when the Colorado Department of Labor and Employment issued a very good, 50-page report on this issue known as “Closing the Pay Gap for Women & Minorities.”

We need to focus the conversation on why we are here today: to determine whether the Commission should continue based on the work it has conducted.

We’ve spent nearly eight years studying and reporting this issue, which is a lot of time and resources.

Instead of repeating the same steps over and over again, why aren’t we doing anything with the information that has been collected by CDLE back in 2007 and the Commission over the last five years?

I’ve looked over the documents the Commission put together, and it has done good work!

These documents provide information on Federal and State laws that currently prohibit discrimination and pay inequities.

Important stuff!  The problem is that no one from the employer community has gotten them!

Two of the largest employer organizations never received this information that can be disseminated to employers across the state!

I recognize that the Commission may not have received the financial resources that it would have liked, but there was always an opportunity for the organizations that are supporting this bill to step up and give gifts, grants or donations—but no one did that!

There have been plenty of opportunities to request an appropriation to fund this Commission over the last five years—but no one did that.

I’m confused as to how this bill resolves the pay inequity goals of the proponents and would encourage that we use the energy spent already and do something with this information.

After the bill in the Senate died on January 21st, and when the news broke that a bill would be introduced in the House, statehouse reporter Ed Sealover of The Denver Business Journal interviewed Loren:

Hearing the details of the measure caused Loren Furman, the senior vice president of state and federal relations for Colorado Association of Commerce and Industry (CACI) and one of the leading opponents of extending the commission, to question the point of reviving this fight — especially knowing that the bill, if it passes the House, is likely to return to the same Senate committee that killed the commission originally.

A sunset review by the Colorado Department of Regulatory Agencies (DORA), issued last October, recommended that the Commission, which is housed in the Colorado Department of Labor and Employment (CDLE), be given another two years of life.

Here’s what DORA had to say in recommending that the Commission be continued:

The Pay Equity Commission (PEC) was created to increase awareness of pay inequity and to develop mechanism to address sit.  The PEC has made some, though minimal progress on its assigned tasks.  As such the work of the PEC remains unfinished and it should be continued.

On January 21st, the Senate Business, Labor and Technology Committee voted on a party-line 5-to-4 to oppose DORA’s recommendation.  Loren testified before the Committee in opposition to continuing the Commission.  Ed Sealover, statehouse reporter of The Denver Business Journal, described Loren’s testimony:

Loren Furman, CACI senior vice president of state and federal relations, noted that the commission’s work — which included one annual report that was not given to her organization — came after a lengthy report the state had issued in 2007 on the same pay-gap issue.

“We’ve now spent eight years — Eight years! — looking at this issue and reporting on this issue,” Furman said. “I’m just a bit confused as to what the commission still needs to do.”

The Commission was created by HB-1417 in 2010 when the Democrats controlled both chambers of the Colorado General Assembly and then-Governor Bill Ritter, a Democrat, signed the bill into law.  Here’s the mandate for the Commission contained in HB-1417:

(3)  The Commission’s work, in conjunction with the department, includes:

  • Educating employers in the state about issues or practices that may contribute to pay inequities;
  • Working with business groups or education institutions to develop and maintain an inventory of best practices for encouraging equal pay;
  • Encouraging employers to implement equal pay best practices;
  • Studying other state models of equal pay practices that achieve pay equity;
  • Developing a program recognizing employers who pursue pay equity practices;
  • Conducting outreach and education to employees and employers regarding pay equity; and
  • Working to establish the State of Colorado as a model employer with regard to pay equity.

The legislature gave the Commission no money, however, but authorized it to receive “gifts, grants and donations.”   CDLE Executive Director Ellen Golombek reported to the CACI Labor and Employment Council on January 21st that the Commission has never received any funding from the private sector.

The Colorado Statesman pointed out that the Commission has a controversial history:

The CPEC’s more recent history is a tad murky. The statute required the commission to issue an annual report, beginning in 2012, on equal pay issues. To date, only the 2012 report has been made public; there was no report in 2013 and the 2014 report, which was due June 30, 2014, is still in draft form.

In 2010, HB-1417 essentially made permanent until July 1, 2015, an ad hoc, commission that had existed since 2007.  Under the umbrella of the CDLE, the then-temporary “Pay Equity Commission” issued a report, “Fulfilling the Promise: Closing the Pay Gap for Women and Minorities in Colorado,” in March 2008.

For news media coverage of this issue, read:

“House Democrats keep Pay Equity Commission alive, for now,” by Joey Bunch, The Denver Post, January 29th.

“Bill to reinstate Pay Equity Commission gets first approval,” by Ed Sealover, The Denver Business Journal, January 30th.

“Democrats look to keep alive talk about pay equity,” by John Frank, The Denver Post, January 26th.

“Back from the dead: Democrat tries to revive Colorado’s Pay Equity Commission,” by Ed Sealover, The Denver Business Journal, January 23rd.

“Republicans in Senate kill two commissions,” by Marianne Goodland, The Colorado Statesman, January 23rd.

Jason Jeffries of GE Johnson Appointed to Workers’ Compensation Appeals Board

Jason Jeffries

Jason Jeffries

The Colorado Division of Insurance recently requested that CACI recommend an individual in the construction industry to serve on the Workers’ Compensation Appeals Board.  The Board hears “grievances brought by employers against their workers’ compensation insurers concerning the calculation of experience modification factors and classification assignment decisions,” according to the Division.

CACI contacted CACI-Member GE Johnson, which suggested Jason Jeffries, Director of Environmental, Health & Safety, for consideration by the Division.  CACI then submitted Jason’s application to the Division, and it was approved.

For information on workers; compensation, visit the Web site of the Division of Workers’ Compensation, Colorado Division of Labor and Employment.

CACI’s Curtsinger Testifies For Reining in Abusive Patent Trolls

Leah Curtsinger waiting to testify

Leah Curtsinger waiting to testify

Each year since 2011, predatory patent holders known as “patent trolls” have cost our economy more than $29 billion and the rate of businesses having to defend against frivolous patent lawsuits increased 410% from 2005 – 2011.

CACI supports HB15-1063 because it strikes a commonsense balance between protecting patent holder rights and ensuring litigation doesn’t replace innovation as a way to make a living here in Colorado.  About ten years ago, patent trolls began buying up obscure and vague patents for the purpose of seeking lucrative licensing agreements.  Rather than asserting patent violations through product manufacturers and product makers, patent trolls went directly to the end users (who assumed by purchasing a product, they were purchasing the right to use the product).  Patent trolls were going after Colorado’s businesses and individual consumers with letters threatening suit if payments weren’t made for licenses.

One example: A patent troll sent out 16,000 demand letters to coffee shops (Caribou Coffee, Cosi, Panera), hotels (Marriott, Holiday Inns, Wyndham hotels to name a few) and even to grocery stores, alleging that not only was each company violating the patent, every single location was as well by allowing customers to use the Wi-Fi.  In this case, the patent wasn’t for the router and it wasn’t for the circuits – the trolls were alleging patent infringement for the LAN configuration used in all wi-fi networks.  Federal courts struck down the allegations, but not before it cost Cisco and Motorola more than $13 million to defend the case.  Not every business has the means or the time to fight frivolous patent troll suits, but 1063 establishes transparency and Attorney General authority to pursue the bad actors and weed out frivolous suits.

Congress tried to address patent reform over the last decade but have been unsuccessful.  Last year the Senate Judiciary Committee came close with a bipartisan agreement, however the bill was “pocket-vetoed” by Majority Leader Reid.  Patent reform is a priority for the Judiciary Committee, but that committee must also address cybersecurity, e-privacy and identity theft legislation this year.  Congress itself is also facing an unprecedented number of hurdles and deadlines – leaving little bandwidth to rein in patent trolls or address federal patent reform.

Additionally, CACI has worked with the U.S. Patent & Trademark Office (USPTO) to get feedback on 1063.  Through those discussions we learned the USPTO has streamlined their patent approval process in recent years, raising the bar for patent applications and significantly increasing standards for new patents.  These innovations by the USPTO mean there aren’t likely to be new patent trolls, but patent trolls are still out there targeting businesses.

Why CACI Supports 1063:  1063 takes several small steps to ensure demand letters are for legitimate cases.  By allowing the Colorado Attorney General to pursue bad actors, we are following a successful model implemented in 18 other states.  A patent holder who believes their patent has been violated is within their rights to request a licensing fee from users, and they are within their rights to bring suit for confirmed violations.  However, 1063 ensures 5 things:

If a demand letter is sent, HB15-1063 says:

  • It must include the patent number & description of the patent being infringed (There are currently no federal or Colorado state statutes ensuring this basic information be part of patent communications and/or demand letters);
  • Demand letter must be from the current patent holder & the patent cannot have expired; (Numerous cases exist where patent trolls extorted “licensing payments” from businesses trying to avoid expensive court costs, and businesses didn’t have the tools to determine the validity of patent assertions.)
  • Cannot falsely say or imply a lawsuit has been filed if one has not;
  • And, demand letters will be prohibited through 1063 if the letter writer has established a pattern of threatening a lawsuit for licensing payments & are not following through with a legitimate, founded suit.

HB15-1063, passed out of the House Business Committee 13-0 on Thursday night & will now be heard before the House Appropriations Committee.

Congressional Update

  • Keystone: Legislation to green light the Keystone XL Pipeline passed the Senate yesterday, 62-36.  The bill was different from the House-passed version so S.1 will now go to reconciliation.  The President has already issued a veto threat.
  • LNG Exports: The House passed legislation (277-133) requiring the Dept. of Energy to determine within 30 days whether permit applications for liquefied natural gas (LNG) exports are approved.
  • Up next: The Senate will be addressing immigration and border security concerns as they take up the Dept. of Homeland Security funding bill.