Colorado Legislature Takes Aim at Insurance Companies

Coloradans are angry about health care costs, and it’s easy to see why. The cost of care is steadily climbing and everyone – especially residents of the Western Slope and Eastern Plains – wants someone to blame.

At the state legislature, insurance companies seem to have taken a lot of that blame. With the support of the Colorado Medical Society and others, legislators introduced eight bills this session that would further regulate the health insurance industry in Colorado with the goals of reducing costs and increasing competition.

To be fair, insurance companies are not the only culprits when it comes to rising health care costs, but they are an easy target. After all, who else takes a big ol’ chunk of your paycheck every month for an insurance premium?

So far, lawmakers from both sides of the aisle and the lieutenant governor, Donna Lynne, have supported bills that would impose further requirements on insurance carriers in Colorado. Notably, Lynne garnered the support of Republican Senator Larry Crowder and Democratic Representative Daneya Esgar for one of her priority bills, House Bill 1286.

This proposal would require insurance companies that cover state employees to also participate in the state health care exchange, Medicaid, and Child Health Plan Plus (CHP+), and to provide coverage in at least two high-cost counties in the state. In other words, any insurer that scores a big state contract also must contribute to increased market competition. This bill was assigned to the Senate State, Veterans and Military Affairs Committee along with a number of the lieutenant governor’s bills, where it died by a vote of 3-2.

Senate Bill 88, which has been signed by the governor, has a similar goal. It will stop insurance companies from discriminating against providers that serve high-cost areas or populations. Under current law, insurance companies can pick and choose which doctors they consider to be “in network.” This means carriers can choose Dr. A instead of Dr. B because, for example, Dr. B serves a higher-cost population or works in a higher-cost area that would result in less profit for the insurer. SB 88 will prohibit this practice and require insurance companies to put in writing their reasons for excluding a doctor from their network.

And SB 198 would require that any insurance company entering into a merger with another insurer in Colorado be subject to review by both the commissioner of insurance and the public. Currently, merger review practices are more limited in scope and do not require a thorough legal review by the state. This would allow for greater scrutiny of the merger and its potential effects on competition in the Colorado insurance market. The bill is still under consideration.

But the legislature has attempted to address more than just competition. For instance, SB 151 would have required that insurance companies base their coverage authorizations (what they agree to pay for) on evidence-based practices, and that those practices be disclosed to everyone they insure. The Senate Committee on Business, Labor and Technology killed this bill early in the session after hearing testimony from numerous insurance carriers who were concerned about the potential regulatory burden.

SB 190 and HB 1247 would both stop health insurers from denying their clients access to providers as long as they agree to the terms and conditions of the patients’ benefit plan. The former bill, which was specific to dental services, passed and has been signed into law by the governor. The latter, which applied to chiropractors, optometrists and pharmacists, was killed in the House Health, Insurance and Environment committee.

Similarly, SB 206 would have established guidelines for how much of the cost an insurance company should cover if one of its clients receives services from an out-of-network provider at an in-network facility. Consumers sometimes refer to charges from this situation as “surprise billing,” especially when they aren’t aware that an out-of-network provider is treating them. SB 206 died in the Senate Business, Labor and Technology committee at the request of its sponsor.

Finally, HB 1173 requires a binding contract between insurers and providers to prohibit an insurer from taking retaliating against a provider because of a payment dispute. In the past, disputes over payments or services have often led insurers to punish providers by sending them fewer patients or paying them less for their services. Governor Hickenlooper signed HB 1173 into law on April 6.

The 2017 legislative session is almost over, but as health care prices continue to climb, we expect to see plenty more legislation directed at insurers in future sessions.