Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866.9600

E-Mail: dpilcher@cochamber.com

Friday, April 17, 2009

NOTE:  This past week at the Colorado State Capitol has been one of an unusual contention and high drama, with the ascendancy of new majority-party leadership in the Senate, the legislature’s grappling to balance the state budget for the fiscal year beginning July 1st, and the business community’s unified, successful effort to protect Pinnacol Assurance from the attempted raid of $500 million by legislators seeking to use the money to shore up state revenues.  For today’s story by The Denver Post about the progress of the state budget bill:

http://www.denverpost.com/politics/ci_12160974

Senate Elects Shaffer as President, Morse as Senate Majority Leader

This morning, the Senate elected Senator Brandon Shaffer (D-Longmont), who has served as Senate Majority Leader, as Senate President to replace Senator Peter Groff (D-Denver), whose resignation was effective today.  Senator Groff, who will resign from the Senate in May, will be joining the U.S. Department of Education.  Senator John Morse (D-Colorado Springs) was elected Senate Majority Leader to replace Senator Shaffer.  For more on Senator Groff’s pending appointment, click on:

http://www.denverpost.com/breakingnews/ci_12117159

CACI Opposes Health-Care Bill that Places $372 Million Burden on Employers and Workers but Exempts State Government from $80 Million Cost

SB-244 would force businesses to provide unprecedented, expensive health-insurance coverage for children with autism while exempting State Government from the same responsibility for the children of its workers.  In addition, the bill exempts children insured under the State-Federal health-insurance plan know as CHP+ as well as adults who are enrolled with Medicaid.

The sponsor, Senate President Brandon Shaffer (D-Longmont), on Wednesday prevailed on the Senate Appropriations Committee to exempt State Government from the bill’s provisions, which requires unprecedented coverage for autism, because it would cost the State over $80 million in the first two years to comply with the mandate.  The Committee also stripped the provision from the bill that would have required the State to provide the benefit to Medicaid recipients and children enrolled in CHP+. 

The bill now awaits Second Reading on the Senate Floor.  CACI and CACI members Anthem Blue Cross Blue Shield, Rocky Mountain Health Plans and Colorado Association of Health Plans, along with other business organizations, will continue to fight the bill.

Although proponents of the bill obviously have a sympathetic intent in bringing the bill forward, SB-244 goes far beyond any type of parity with other diseases and would cost privately insured employers and their workers millions of dollars.   Preliminary estimates indicate that SB-244 will increase the annual cost of premiums—which are paid by private-sector employers and their workers--by $372 million.

Senator Shaffer asked the Senate Appropriations Committee to amend the bill to allow the State to be exempt from covering these services because the Fiscal Note estimated that it would cost the state over $80 million in the first two years to comply with the mandate.

CACI and other business organizations are very concerned that, in these uncertain economic times, the bill’s proponents seem willing to place a huge, unprecedented expense on businesses, many of which are struggling to keep their health-insurance coverage for their workers.

Colorado insurance companies already cover a variety of medically necessary autism treatments, including physical, occupational, speech therapy and pharmaceuticals.  SB-244, arguably the most expansive autism mandate in the country, would require that health-insurance plans cover an additional expensive therapy, Applied Behavioral Analysis (ABA), which, according to the bill, could be provided to a child by unlicensed or uncertified individuals at an annual expense estimated at $40,000 to $60,000 per patient.  Additionally, the bill would exempt autism expenses from applying towards a worker’s annual maximum benefit, unlike virtually every other disease covered by insurance companies.

Tailor-Made for Trial Attorneys: A “Brooks Brothers” Med-Mal Bill?

The House Judiciary Committee is scheduled to hear the medical-malpractice bill, HB-1344, Monday, April 20th, at 1:30 p.m. in the Old Supreme Court Chamber.  Legislative leaders move committee hearings to the Chamber when they expect a large turnout.  The House sponsor is Representative Christine Scanlan (D-Dillon), and the Senate sponsor is Senator Betty Boyd (D-Lakewood).  CACI strongly opposes the legislation.

The bill would increase the damage caps on non-economic loss or injury called “pain and suffering” in medical-malpractice cases from $300,000 now to a much higher level, perhaps 50 percent higher.  (Total damages--both economic and non-economic--in a med-mal case are set at $1 million, but a judge can approve a higher amount.)

How is the new cap to be determined?  The Secretary of State will calculate on or before this Sept. 1st an “inflation adjustment” that is “based upon the cumulative annual adjustment for inflation each year from July 1, 1988, through June 30th, 2009, rounding the resulting figure upward or downward to the nearest ten-dollar increment.”

The bill helpfully points out that, since 1998, the “purchasing power of the dollar has decreased approximately forty-six percent” according to the Consumer Price Index (CPE) for the Denver-Bolder-Greeley area as determined the Bureau of Labor Statistics, U.S. Department of Labor.  In other words, the cap will be around $450,000.

And, for each year afterwards, the cap will be adjusted upwards by the rate of inflation.

Higher liability caps will increase health-insurance premiums.

If this bill becomes law, the inflation adjustment in the first year will increase the liability caps to nearly $500,000, which will cause an increase of liability insurance premiums from 7 percent to 11 percent.

Those premium increases will, in turn, force health-care providers and facilities to increase their rates and charges to health plans, employers and workers.  Higher rates and charges inevitably increase upward pressure on health-insurance premiums, which are paid by employers and workers.

Higher caps increases “defensive medicine,” which increases health-care costs.

In 2006 and in 2008, PriceWaterhouseCoopers analyzed at the national level the factors fueling rising health-care costs.  In both reports, PWC concluded that “more intensive diagnostic testing and defensive medicine” was a significant factor in increasing the use of health-care services.  It’s reasonable to predict that increased liability exposure will lead to more “defensive medicine.”

Specialities and rural areas will be adversely affected by higher liability caps.

HB-1344 will increase the cost of health care and decrease access for patients, especially in rural areas and for high-risk specialties such as obstetrics and trauma.

In order to stay in practice, rural obstetricians and family doctors treating Medicaid, Medicare and uninsured patients will likely decide to stop delivering babies or treating patients who can’t pay for their care.  Looser, higher medical-liability limits will lead to more litigation and higher payouts, which drives up the cost of physicians’ malpractice insurance.

Colorado’s malpractice rates before the major tort reform of 1988 were astronomical.  Those rates fell immediately upon enactment of tort reform and have remained low since that time.

To fight the bill, CACI is working with a broad coalition of business organizations and specialized medical organizations, including the following:

• Colorado Medical Society

• Colorado Springs Chamber of Commerce

• Colorado Hospital Association

• Colorado Association of Health Plans

• Anthem Blue Cross Blue Shield

• Douglas County Business Alliance

• Colorado Obstetrical & Gynecological Society,

• Colorado Society of Anesthesiologists

• Colorado Academy of Family Physicians

• American Academy of Pediatrics (Colorado Chapter).

Legislature Sends Bill Creating Tax Incentive to Encourage Job Growth to Governor Ritter

On Wednesday, the House agreed with the Senate version of HB-1001, which sends the bill to Governor Bill Ritter for his signature.  On Monday, the Senate gave final, Third Reading approval to the bill.  CACI supported the bill, which is the Governor’s top priority this session for economic development.  To participate in the bill’s program, a business would have to meet certain criteria and apply to the Colorado Economic Development Commission.  The firm would be eligible for a corporate income-tax credit of up to half of its annual FICA taxes on new workers.  The tax credit would be calculated on a year-to-year basis for five years according to the number of FTEs on the payroll of the business at the end of the year.  In order for the tax credit to be granted, a company would have to prove that, if it wasn’t for this program, the company would not move or expand its operations in Colorado. 

Conference Committee Agrees to Tweak Mandated Parental Leave Bill

Yesterday, the Conference Committee, which consisted of three senators and three representatives, agreed by a five-to-one vote to a change to HB-1057.  Both chambers now have to agree to the change for the bill to pass the legislature.

Before the Committee met, here’s where the language--which CACI and other business organizations had lobbied for in the Senate--stood on the key provision that stipulated when an employer could restrict leave for a worker:

“ . . . . an employer may limit the ability of an employee to take leave pursuant to this section in cases of emergency or other situations that may endanger a person’s health of safety or that necessitate the presence of the employee.”

Last month, the Senate Education Committee amended and approved HB-1057 on a partisan five-to-three vote.  The amendment added by the Senate Education Committee reflected the lobbying effort of CACI and other business organizations to strengthen the right of an employer to refuse a worker’s request for leave “in cases of emergency or other situations that may endanger a person’s health or safety or that necessitate the presence of the employee.”

The key word in this sentence is “or,” which replaced “and.”  The new language adopted by the Conference Committee states that an employer can refuse a worker’s request for leave “in a situation where the absence of the employee would result in a halt of services or production.”

HB-1057 would require companies that employ 50 or more workers provide up to 18 hours of unpaid leave in an academic year in three-hour blocks to workers who want to attend parent-teacher conferences or other academic activities related to the educational achievement of the employee’s child.  The worker could take no more than six hours in one month.  The worker also could elect to take paid sick or vacation leave instead of the unpaid leave.  The leave could be used for parent-teacher conferences and for meetings for a special-education student, to prevent a student from dropping out, or for disciplinary matters.

Single-Payer Health Insurance Bill Dies at Sponsor’s Request . . . but Wait, There’s More!

On Tuesday, the House on Third Reading laid over HB-1273, a bill that would have begun laying the foundation for a single-payer health-insurance system for Colorado.  Sponsored by Representative John Kefalas (D-Fort Collins), the bill was laid over at his request until July 5th because he lacked the votes for the bill to pass.  The State Constitution requires that the legislature adjourn this session by midnight on Wednesday, May 6th.

The bill was co-sponsored by 15 fellow House Democrats.  Democratic Governor Bill Ritter, however, opposed the bill.  HB-1273 would have created the “Colorado Health Care Authority” with the power to develop a state government health-care system and administer and pay for health-care services.  The bill was called “The Colorado Guaranteed Health Care Act” and sought “to establish the principle of universal health care coverage.”  This bill would have been the first building-block in creating a government-run “single-payer” health-care system, the most well-known to Americans being the Canadian system.  CACI strongly opposed the bill.

CACI understands, however, that Representative Joe Rice (D-Littleton), chair of the House Business Affairs and Labor Committee, will introduce a late bill that is advocated by the South Metro Chamber of Commerce.  CACI believes that the South Metro Chamber’s bill will be a variation on its proposal to the 208 Commission, which in 2007-2008 studied Colorado’s health-care issues and brought forth a number of recommendations.  The South Metro Chamber of Commerce is not a member of CACI.

Last month, the CACI Board of Directors unanimously approved a resolution reaffirming CACI’s position to oppose legislation that tries to implement a mandate on individuals to obtain health-insurance.  Instead, CACI favors incentives for individuals and employers for greater coverage of workers.

For coverage of HB-1273 by The Denver Post, click on:

http://www.denverpost.com/search/ci_12147416

http://www.denverpost.com/search/ci_12086817

http://www.denverpost.com/search/ci_11945054

For More Information on Legislation . . .

CACI members with questions about legislation that CACI opposes or supports should contact Chuck Berry, CACI President, at 303.866.9652 or e-mail him at cberry@COchamber.com

Questions pertaining to health-care bills should be directed to Ralph Pollock, Chair of the CACI HealthCare Council, at 303.866.9657 or via e-mail at ralph@apaccess.com