Senate panel rejects House call for state health exchange audit

It didn’t matter to Democrats on a Senate committee Wednesday that a bipartisan group of legislators in the Colorado House overwhelmingly approved a bill calling for a full audit of the state’s health care exchange.

The Connect for Health Colorado program, which is the state’s response to Obamacare,  has been audited enough, four members of the Senate Health & Human Services Committee said.

So a bill introduced by Republicans, including Grand Junction Sen. Steve King, calling for a complete performance audit of the exchange is unnecessary, the four senators said.

As a result, HB1257 died on a party-line 4-3 vote.

“They are being extremely transparent in terms of their performance already,” said Sen. Jeanne Nicholson, D-Black Hawk, who also serves on the Legislature’s oversight committee of the exchange. “I think that they already have a number of audits that have demonstrated their performance had been far better than most of the exchanges in other states. At this point I think it’s premature because the exchange hasn’t been in existence for very long.”

The first calls for a full state audit of the exchange that is designed to help Coloradans find health care came late last year after its chief executive officer, Patty Fontneau requested that the exchange’s governing board approve bonuses and pay raises for her and her management staff.

Fontneau, a Republican who already makes more than $190,000 a year, was immediately criticized because, at the time, the exchange was lagging behind in the number of enrollees it had expected. A hailstorm of bad publicity caused her to back off the request.

Since then, however, the exchange has double the number of Coloradans signed up for private health care than it needs to be “financially sustainable,” Fontneau told the committee.

Currently, it has signed up more than 100,000 Coloradans for private coverage and 151,000 for Medicaid. It needed to reach 50,000 private insurance plans to be considered sustainable, Fontneau said.

Fontneau told the committee that the exchange already has undergone four federal financial audits, numerous reviews of its computer system, files monthly financial reports to the federal government, has undergone five “independent validation” reviews and is subject to numerous security vulnerability tests.

“I know there’s concerns about transparency, but there really is a tremendous amount of transparency, certainly regarding our financials,” she said.

Regardless, Republican lawmakers in the state wanted more information not just on how the exchange spends the federal money it receives — it gets no state funds — but also in the way it is operated, particularly over the consulting firm that it hired to help do its job.

While that firm, OnSight Public Affairs, has numerous nonpartisan clients, it also has several Democratic ones, too, including the re-election campaigns of U.S. Rep. Ed Perlmutter, D-7th, and Democratic Gov. John Hickenlooper.

Republicans smelled political reasons why the firm was hired, and questioned why that firm is even needed, saying the exchange already has 34 full-time workers and has spent millions of dollars on marketing efforts, including driving an RV around the state to sign people up for coverage.

Rep. Jared Wright, R-Fruita, the first Republican lawmaker to call for a full audit, questioned why Democrats on the Senate committee killed the bill that would have ordered it.

“My call for an audit passed the house in a bipartisan manner,” he said. “It certainly appears that our desire to peek behind the curtain of the Colorado health exchange has now been denied because someone high up is afraid what we might find.”

Though Wright was not the House sponsor of the bill, King was a Senate sponsor because he also is this year’s chairman of the Legislative Audit Committee. The State Auditor’s Office, which would have done the audit, issues its reports to that bipartisan panel.

While the state auditor already is in the middle of conducting a financial audit of the exchange, a more complete performance audit is called for in this instance, King said.

“I am unbelievably disappointed in the Democratic majority’s decision to turn their backs on the concept of transparency and best practices in killing on a party-line vote a Legislative Audit Committee bill requesting a performance audit of the health care exchange,” he said.

Democratic attorney Mark Grueskin told the committee that killed the bill that normal audit laws in Colorado allow the state auditor to do financial audits of public-private enterprises such as the exchange, but bars more in-depth ones when such groups already face federal audits.


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