CO Colorado Healthcare Affordability and Sustainability Enterprise

The bill creates the Colorado healthcare affordability and sustainability enterprise (enterprise) as a type 2 agency and government-owned business within the department of health care policy and financing (HCPF) for the purpose of participating in the implementation and administration of a state Colorado healthcare affordability and sustainability program (program) on and after July 1, 2016, and creates a board consisting of 13 members appointed by the governor with the advice and consent of the senate to govern the enterprise. The business purpose of the enterprise is, in exchange for the payment of a new healthcare affordability and sustainability fee (fee) by hospitals to the enterprise, to administer the program and thereby support hospitals that provide uncompensated medical services to uninsured patients and participate in publicly funded health insurance programs by:

• Participating in a federal program that provides additional matching money to states;
• Using fee revenue, which must be credited to a newly created healthcare affordability and sustainability fee fund and used solely for purposes of the program, and federal matching money to:
• Reduce the amount of uncompensated care that hospitals provide by increasing the number of individuals covered by publicly funded health insurance; and
• Increase publicly funded insurance reimbursement rates to hospitals; and
• Providing or contracting for or arranging advisory and consulting services to hospitals and coordinating services to hospitals to help them more effectively and efficiently participate in publicly funded insurance programs.

The bill does not take effect if the federal centers for medicare and medicaid services determine that it does not comply with federal law.

The enterprise is designated as an enterprise for purposes of the taxpayer's bill of rights (TABOR) so long as it meets TABOR requirements. The primary powers and duties of the enterprise are to:

• Charge and collect the fee from hospitals;
• Leverage fee revenue collected to obtain federal matching money;
• Utilize and deploy both fee revenue and federal matching money in furtherance of the business purpose of the enterprise;
• Issue revenue bonds payable from its revenues;
• Enter into agreements with HCPF as necessary to collect and expend fee revenue;
• Engage the services of private persons or entities serving as contractors, consultants, and legal counsel for professional and technical assistance and advice and to supply other services related to the conduct of the affairs of the enterprise, including the provision of additional business services to hospitals; and
• Adopt and amend or repeal policies for the regulation of its affairs and the conduct of its business.

The existing hospital provider fee program is repealed and the existing hospital provider fee oversight and advisory board is abolished, effective July 1, 2016. The unexpended hospital provider fee cash fund (fund) is created, and on June 30, 2016, the state treasurer shall transfer to the fund all money in the hospital provider fee cash fund before the cash fund is repealed, effective July 1, 2016. Money in the fund, other than fund investment interest and income that is credited to the general fund, is continuously appropriated to HCPF through October 30, 2017, for the purpose of paying claims incurred under the hospital provider fee program before its repeal. HCPF must refund any money in the fund derived from hospital provider fees that is not used to pay such claims to the hospitals that paid the fees.

The bill specifies that so long as the enterprise qualifies as a TABOR-exempt enterprise, fee revenue does not count against either the TABOR state fiscal year spending limit or the referendum C cap, the higher statutory state fiscal year spending limit established after the voters of the state approved referendum C in 2005. The bill clarifies that the creation of the new enterprise to charge and collect the fee is the creation of a new government-owned business that provides business services to hospitals as an enterprise for purposes of TABOR and related statutes and does not constitute the qualification of an existing government-owned business as a new enterprise that would require or authorize downward adjustment of the TABOR state fiscal year spending limit or the referendum C cap.

In order to compensate for a proposed reduction in the amount of the fiscal year 2016-17 long bill appropriation of revenue from fees collected by HCPF from hospitals and federal matching money, the bill appropriates $146,693,573 in healthcare affordability and sustainability fees and federal funds to the enterprise for fiscal year 2016-17.

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)