Exchange board frustration mounts over spending

By Katie Kerwin McCrimmon

Colorado’s exchange managers have triggered confusion among their own finance committee board members on the eve of a critical vote Monday over future spending and revenues.

Health News Colorado on Thursday reported that board members were concerned that exchange managers had spent $10 million over the past year to sign up about 8,000 people through face-to-face enrollment centers.

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On Friday morning, Connect for Health Colorado managers said they actually expect to spend about $6.6 million on the assistance sites this fiscal year, which extends through the end of June. (Click here to read Exchange spent $10 million for 8,000 face-to-face sign-ups.)

A spokeswoman declined to answer questions over the phone, but sent a written statement.

“The assistance network has been conservative and responsible with its spending as they’ve conducted extensive outreach and enrollment during the past many months — reaching more than 111,000 people across the state,” Linda Kanamine, communications director for the exchange, wrote.

She said managers are reviewing “what worked well and what we can improve on.”

Kanamine said exchange officials had set aside $10 million for the assistance centers for the 2014 fiscal year, but had not spent it all.

“They never said that they didn’t spend it all,” said Dr. Mike Fallon, a member of the finance committee who participated in Thursday’s meeting. “Since it’s pay as you go, I think those numbers are a little in flux.

“I know $10 million was in the budget,” Fallon said.

One of three board members on the finance committee, Fallon said he repeatedly has asked for details on the spending.

“I keep asking for more transparency and follow-through on that network and they keep saying it’s coming. I don’t know how cost-effective it is. Unfortunately, the ACA (the Affordable Care Act) says the assistance networks must exist.”

Fallon is especially frustrated that of the 46,000 people who signed up for health coverage through the face-to-face help centers, nearly all qualified for public health programs including Medicaid and the children’s health program, not private health insurance. Colorado’s exchange connects customers with private health insurance companies while the state government manages Medicaid programs in Colorado. Board members on Thursday debated whether exchange funds should subsidize Medicaid sign-ups.

Board member Ellen Daehnick, who is also on the finance committee and participated in Thursday’s meeting, is a fan of the assistance network and thinks it’s doing good work, but she’s mystified by the shift from the $10 million figure on Thursday to $6.6 million on Friday.

“In yesterday’s finance committee discussion, the number that the Connect for Health staff presented to the board members for the expenditures on the assistance center last year was $10 million. It’s on page 6,” Daehnick said referring to a presentation a staff member made. (Click here to see the presentation on the assistance network. )

“That’s the number we used when we discussed it. No one from the Connect staff offered any correction during the meeting,” Daehnick said.

Daehnick had calculated during the finance committee hearing that each of the 8,000 private health insurance sign-ups had cost the exchange about $1,250. That per-person cost would be more like $825 if the exchange ends up spending about $6.6 million instead.

Daehnick has been increasingly frustrated with how few answers she and fellow board members get from exchange staffers.

“The senior leadership of Connect needs to get their numbers straight before they come to the board and ask for budget expenditures. We need to have an analysis-based discussion to determine how we’re going to meet our strategic objectives with the limited amount of cash we’re going to have.”

Daehnick said whether exchange managers are proposing spending for the assistance center, the call center or technology, they have failed to give analytical support for the spending requests. Instead, she said managers seem to be providing “feeling-based budgets.”

The shift in numbers from Thursday to Friday cast even more doubt for Daehnick.

“It makes it almost impossible for me to evaluate any budget request from the staff if the numbers presented aren’t accurate in the first place,” she said.

Kanamine insisted in a written statement that board members, members of the public and the media had all the information they needed to evaluate Connect for Health’s spending. (Click here to see budget documents from the committee meeting.)

“We are transparent with our budget and post all final documents on our site for the public, and we will answer questions when people have them. Patty (Fontneau, the CEO) offered to do one-on-ones with any board members who wanted it — and has done so with several — to go through the modeling, plan and any questions. We continue to do outreach with many organizations and people across the state to discuss our long-term sustainability and answer questions.”

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