Lawmakers support broad new exchange audit

By Katie Kerwin McCrimmon

Following a scathing audit that found financial mismanagement and possible illegal payments for lobbying at Colorado’s health exchange, bipartisan members of the Legislative Audit Committee voted unanimously Tuesday to conduct a comprehensive exchange audit in 2015.

Connect for Health store front

The bill will mirror HB 14-1257, a bill that passed Colorado’s House with support from all but one lawmaker earlier this year, then got killed in the Senate after lobbying from Connect for Health’s former CEO and a private attorney she had hired. (Click here to read Republicans furious as Dems kill exchange audit bill.)

On Monday, when state auditors unveiled results of a limited exchange audit, Connect for Health’s interim CEO Gary Drews and board member Steve ErkenBrack vowed that Colorado’s exchange would not fight a broad review should the legislature vote to conduct it. (Click here to read: Blistering exchange audit questions $32 million in spending including possible illegal lobbying.) Republicans also now control the state Senate and are likely to support a broad, new audit.

Rep. Jerry Sonnenberg, R-Sterling, is moving to the Senate in January and offered to be a co-sponsor there as did Sen. Cheri Jahn, D-Wheat Ridge. In the House, Rep.   Dan Nordberg, R-Colorado Springs, offered to shepherd the bill, as he did earlier this year. The other three lawmakers who voted for a broad audit next year were committee chair Sen. Lucia Guzman, D-Denver, Rep. Dianne Primavera, D-Broomfield, and Rep. Sue Ryden, D-Aurora. Sen. David Balmer, R-Centennial, did not attend Tuesday’s hearing, but helped sponsor the comprehensive audit bill earlier this year.

Nordberg said more oversight is clearly needed as Connect for Health tries to “right the ship.”

“The thing that concerned me yesterday is that we indentified several clear violations of federal law,” Nordberg said Tuesday.

In particular, he was appalled that exchange managers may have illegally used federal funds to hire a private attorney who then lobbied to kill the audit bill. Secondly, the initial audit found that the exchange had hired a firm that may have encouraged voters to support health reform. Using federal tax dollars to pay for political activity is illegal. Exchange consultants said after Monday’s hearing that the firm, Field Works, that appeared to be doing political work had not done so and was trying to encourage people to sign up for health care. They said the wording in their contract was wrong.

But Nordberg finds numerous problems with the exchange to be troubling.

“We don’t know what we don’t know,” he said.

Colorado State Auditor Dianne Ray had testified earlier this year in support of a broad audit. She said that the findings released Monday show that the exchange needs more oversight.

“It is frustrating to us that they haven’t read all the regulations when they’re getting all this money,” Ray said.

Sonnenberg said he appreciated the promise on Monday that exchange managers would comply with a full audit.

“I think it’s appropriate that we continue to help them get established and make sure that the audit covers the broad spectrum,” Sonnenberg said. “My pessimistic view, and I’m not often pessimistic, is that there are other aspects that we are doing out of federal compliance and if the feds indeed want their money back, how are we going to deal with that?

“This is a new multi-million dollar egg that we want to make sure doesn’t get cracked,” Sonnenberg said.

Guzman agreed.

“I want it to succeed for the people who need it,” she said of the exchange. “I feel like the more opportunity we have to watch it, to give them the push to do it well and do it right is certainly something I would support.”

Lawmakers agreed to support having a bill drafted. They expect to introduce it in the Senate early in 2015.


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