DENVER — The House on Tuesday will debate legislation mandating an audit of the Colorado Health Benefit Exchange that has been plagued with problems since its debut last year to assess its strengths as well as its weaknesses.
The measure, House Bill 1257, is opposed by Patty Fontneau, the executive director of the exchange known as Connect for Health Colorado. Fontneau argues that a performance audit is unnecessary because the exchange has been repeatedly reviewed by federal agencies including the Internal Revenue Service.
“One of my concerns is that we’d be audited on best practices, but I don’t know which best practices,” said Fontneau, who admitted she had met several times with the state auditor to review the scope of the audit.
The measure is sponsored by Republican Reps. Jerry Sonnenberg of Sterling and Dan Nordberg of Colorado Springs and would clarify language in the existing law to authorize a state audit of the exchange’s income and expenditures, evaluate the integrity of the accounting system, assess security risks to confidential health records and personal information, and evaluate hiring practices and background checks.
Connect for Health director Christa Ann McClure, who was hired in March 2013, was placed on administrative leave last month after she had been indicted on eight counts of theft and fraud from a nonprofit agency that provided homes for low-income individuals in Billings, Montana.
McClure is accused of charging $750 to unsuspecting homebuyers for nonexistent warranties, writing a $21,000 check to herself, and charging unknown sums for “consultant” work while she headed the department.
Connect for Health Colorado maintained that McClure had been properly vetted, but Fontneau was unclear as to what agency the exchange had hired to perform background checks.
The exchange has spent at least $80 million since the fall of 2011 – an amount that exceeds the approved annual budget of $26 million.
The exchange is governed by its board of directors, Fontneau said, and is not a state agency. The exchange was approved to receive $187 million in federal grants – not state taxpayer money from the general fund, she said.
“It is not a state department, it is not a state agency, it is not a state commission,” said Mark Grueskin, attorney for Connect Health Colorado. “It is an instrumentality of the state.”
The exchange was signed into law in 2011, which specified that it would not receive state general funds and would be self sustained by insurance premium fees by January 2015.
However, state taxpayer funds were approved by the legislature last year and signed into law by Gov. John Hickenlooper.
The exchange will receive an estimated $22.6 million from the state general fund in fiscal year 2013, and an estimated $19.4 million in fiscal year 2014. The funding includes $15 million transferred from the Colorado Unclaimed Property Trust Fund, $8.8 million from the CoverColorado reserve fund, and tax credits awarded to health insurance carriers.
The audit bill garnered bipartisan support from the Legislative Audit Committee and the House Health, Insurance & Environment Committee, which passed the measure Thursday on a 9-2 vote.
Rep. Sue Schafer (D-Wheat Ridge) said that in her experience as an administrator for the Colorado Department of Education, audits took vast amounts of time and diminished her capacity to serve school board members, teachers and parents.
“I’m worried about this audit diminishing the ability of our Connect for Health (Colorado) employees to serve 720,000 people who don’t have insurance,” said Schafer.
The Democrat lawmaker’s comment raised another concern – exactly how many Coloradans do not have insurance and how many of them discovered their policies were cancelled because of Obamacare and the state health exchange?
Democratic Sen. Mark Udall came under fire in January after emails revealed that staffers in his Washington office had pressured Division of Insurance employees to alter their records and minimize the fact that 250,000 Coloradans lost their health coverage.