Mar 25, 2016

Recent articles

CCLP testifies in support of TANF grant rule change

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

CCLP’s legislative watch for April 5, 2024

For the 2024 legislative session, CCLP is keeping its eye on bills focused on expanding access to justice, removing administrative burden, preserving affordable communities, advocating for progressive tax and wage policies, and reducing health care costs.

Statement: CCLP Statement regarding AG’s opinion on the InnovAge conversion case

Elisabeth Arenales, Health Program Director for the Colorado Center on Law and Policy, issued the following statement about the Colorado Attorney General’s opinion in the conversion of Total Community Options Inc. (InnovAge):

(PDF available here.)

Colorado Attorney General Cynthia Coffman on Thursday approved InnovAge’s proposal to convert to a for-profit organization, with modifications. InnovAge is Colorado’s largest provider of the Program of All Inclusive Care for the Elderly (PACE). The organization sought to convert from nonprofit to for-profit status late last year.

The Attorney General’s opinion on the InnovAge matter reflects the importance of public comment in these types of conversions. It will also do much to ensure that InnovAge’s public assets will be distributed for the benefit of the communities they were intended to serve. Having said that, the opinion fell short of community proposals which would have generated even better results for frail elderly and disabled Coloradans and their families.

InnovAge operates the second-largest PACE program in the United States. Its conversion in Colorado is the first-ever in the nation. PACE programs serve frail elderly and disabled individuals in need of medical care as well as a broad spectrum of supports and services. Most PACE participants are eligible for Medicare and Medicaid. Based in Colorado, InnovAge also operates PACE programs in California and New Mexico.

During the 2015 session of the Colorado legislature, InnovAge backed a bill that permitted Colorado’s Medicaid program to contract with for-profit PACE programs — anticipating a change in the federal law. The bill passed and the federal law did in fact change in May 2015. CCLP played a substantial role in ensuring there were basic procedures in the Colorado legislation — including timelines and specific requirements for the converting company to file its plan of conversion and a requirement for a public comment period.

In late October of 2015, InnovAge filed a conversion plan with the Attorney General. The proposal raised concerns with numerous groups and individuals including CCLP, the Colorado Cross Disability Coalition, the Chronic Care Collaborative, the Colorado Consumer Health Initiative and Dr. Alan Lazaroff, the founder of InnovAge’s predecessor organization.

CCLP submitted objections and comments raising concerns that InnovAge’s assets were substantially undervalued and that InnovAge would transfer its assets upon conversion to a foundation with strong ties to the new for-profit company. CCLP maintained that the new foundation should serve the elderly and disabled. CCLP also advocated that InnovAge’s Colorado assets should remain in the state and that the Attorney General should exercise oversight over the new foundation and new for-profit company. CCLP insisted there be no private inurement to InnovAge officers and directors as a result of the sale of the company and that PACE program participants should be protected so as to ensure no diminution of care after the conversion. CCLP and others also sought the establishment of an ombudsman to serve the InnovAge PACE community.

The Attorney General’s opinion requires the for-profit entity to provide as much as an additional $20 million dollars to the conversion foundation, bringing the total endowment from the original proposal of $202 million to as much as $222 million by 2020. The opinion establishes an ombudsman program to ensure there is no diminution of care and services to InnovAge’s PACE clients. It also restructures the initial foundation and InnovAge board by adding community representatives including a PACE participant or family member, an individual representing the frail elderly population and an individual representing the frail elderly disabled community. In addition, the Attorney General restructured the foundation’s mission to include disabled individuals and both rural and urban areas of Colorado. She also required the foundation to set aside 80 percent of the value of the transaction plus future earnings for Colorado.

Additionally, the Attorney General’s opinion requires the foundation’s board of directors to submit conflict of interest statements to her office through 2021 and establishes monitoring requirements for the forprofit entity. The Attorney General will appoint a designated, ex-officio, non–voting representative to serve on the foundation board for five years. She also disallowed $2.3 million in severance payments to InnovAge senior management.

While the Attorney General made substantial changes to the original conversion plan, CCLP’s valuation expert had estimated a value substantially higher than $222 million. We believed the valuation was closer to $400 million because the potential market for PACE services is growing rapidly and Denver’s real estate market is booming. We are also concerned that eight out of 12 members of the foundation’s initial board of directors will be current InnovAge executives or InnovAge Foundation board members. We believe that an organization with direct ties to InnovAge may not be an appropriate custodian of the community assets because there is a risk the board might inappropriately favor the newly formed for-profit. InnovAge is being purchased by Welsh, Carson, Anderson and Stowe, an equity investment firm. Under the proposal, InnovAge will remain headquartered in Colorado for at least five years.

In the end, this opinion affirms our belief that a public review process is necessary and effective in ensuring that assets that are built through public funds and tax-exempt status remain in the community and benefit the people for whom they are intended.

Though the opinion substantially improved InnovAge’s original proposal, CCLP will consult with members of the affected communities as we assess whether the opinion meets legal requirements and whether it is subject to court review seeking to establish greater protections and benefits for those affected.

Media contact: Bob Mook, Communications Director, Colorado Center on Law and Policy, bmook@copolicy.org, 303-573-4947, ext. 311

The Colorado Center on Law and Policy is a nonprofit, non-partisan research and advocacy organization that engages in legislative, administrative and legal advocacy on behalf of low-income Coloradans.

Recent articles

CCLP testifies in support of TANF grant rule change

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

CCLP’s legislative watch for April 5, 2024

For the 2024 legislative session, CCLP is keeping its eye on bills focused on expanding access to justice, removing administrative burden, preserving affordable communities, advocating for progressive tax and wage policies, and reducing health care costs.

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.