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Committee delays action on Recovery Audit Contractor bill after members raise fiscal and policy concerns
Summary
The committee reviewed a draft bill to maintain the federally required Recovery Audit Contractor (RAC) program. Health Care Policy and Financing and the Colorado Hospital Association disagree about provisions and fiscal impact; HCPF estimated a $14.4 million general fund fiscal note. Members asked for more work and did not introduce the bill.
The Joint Budget Committee reviewed a draft bill to authorize the state’s Recovery Audit Contractor (RAC) program, but committee members declined to introduce the measure and asked staff and agencies to continue negotiations.
JBC staff member Mr. Kurtz said Health Care Policy and Financing (HCPF) and the Colorado Hospital Association continue to disagree about sections of the draft that HCPF believes drive a fiscal impact. HCPF’s current estimate for the draft the committee had on its desk was a $14,400,000 general‑fund impact, Kurtz said.
Representative Brooke Serota urged preserving a robust and federally required audit program to ensure responsible stewardship of state and federal health care dollars, but she also said language in the draft appeared to single out a particular hospital system and that other provisions could expose the state to liability if notice provisions or deadlines were missed. She suggested a tiered approach to audits — for example, expanding an audit when a higher percentage of claims are found problematic — rather than the draft’s current structure.
Senator Kirkmeyer and others said they share concerns about parts of the draft that may be outside federal guidance, and they questioned vendor payment rates in the draft; committee members noted the vendor payment structure reflected in the fiscal note (about 18 percent in the draft) appears higher than federal guidance (about 12.5 percent). Members expressed concern that incentives in the draft or fiscal structure could create perverse incentives to find recoveries to balance budgets.
Committee members said more negotiation is needed. Representative Sarah Mabley said she had discussed progress with HCPF and observed work remains to be done; multiple members said they were less prepared to support the draft than in earlier months. The committee did not introduce the RAC bill at this meeting and asked parties to keep working toward a compromise before the committee reconvenes.
Ending: Staff and interested parties were asked to continue discussions; the committee took no formal action to introduce the bill.
