Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON HEALTH AND HUMAN SERVICES

Date:01/19/2006
ATTENDANCE
Time:01:35 PM to 03:56 PM
Johnson
X
Mitchell
*
Place:SCR 356
Sandoval
X
Shaffer
X
This Meeting was called to order by
Traylor
X
Senator Hagedorn
Hanna
X
Hagedorn
X
This Report was prepared by
Elizabeth Burger
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
SB06-011
SB06-019		Amended, Referred to Appropriations
Laid Over


01:38 PM -- Senate Bill 06-011

Senator Tapia, bill sponsor, began his discussion of Senate Bill 06-011. He explained that the bill authorizes a study of health insurance rates in Pueblo county, and that the legislation is necessary because, for many years, health insurance rates in Pueblo have been higher than in the rest of the state. Senator Hagedorn distributed amendment L.003 to the committee (Attachment A). Senator Tapia stated that the bill that will allow citizens of Pueblo to have information regarding their health insurance rates.

01:43 PM -- Dr. Rita Shian, Pueblo Medical Society, testified in support of the bill. She stated that residents of Pueblo do not understand why their health insurance rates are higher than the rest of the state and that the study will help identify the cause of the disparity. She explained that providers at the Mental Health Institute at Pueblo are University of Colorado employees, and they have difficulty finding affordable health insurance.

01:45 PM -- Steve McNally, University of Colorado, testified that his responsibilities include providing health insurance benefits to University of Colorado employees. He stated that it is difficult to provide health insurance to the physicians at the Mental Health Institute at Pueblo. He testified in support of the bill.

01:47 PM -- Rod Slyhoff, Pueblo Chamber of Commerce, testified in support of the bill. He responded to questions from Senator Johnson regarding a previous study of health insurance costs conducted by the Pueblo Chamber of Commerce. Mr. Slyhoff stated that the chamber was not able to get necessary data from health insurance companies in order to complete the study.










01:51 PM -- Pam Hanes, Colorado Health Institute, testified in support of the bill. She stated that the Colorado Health Institute worked on the previous study of Pueblo health insurance costs, but that there was difficulty obtaining necessary data from several health plans. She responded to questions from Senator Johnson regarding the funding of the previous study, stating that a local foundation was funding the study. She stated that the Colorado Health Institute would fund the completion of the study outlined in Senate Bill 06-011 or find the resources to complete the study. She further responded to questions from the committee regarding the scope of the previous study.

01:57 PM -- Ralph Pollock, Colorado Association of Commerce and Industry, testified in support of the bill.

01:58 PM -- Dr. Carl Bartecchi, Pueblo Physicians, distributed a handout to the committee (Attachment B). He stated that the problem of high health insurance rates in Pueblo is not new. He identified some factors which may contribute to the problem, including lack of health insurance companies in Pueblo and the number of persons in Pueblo who have chronic diseases, who are smokers, or who are elderly. He stated that Pueblo has been experiencing a loss of internal medicine specialists and, as a result, the remaining providers must see more patients and are less capable of caring for persons with more complicated illnesses. Senator Tapia discussed Pueblo's smoking ban.

02:06 PM -- Michael Huotari, Colorado Association of Health Plans, distributed a handout to the committee (Attachment C) and testified in support of the bill.

02:09 PM -- A.W. Schnellbacher, AARP, testified in support of the bill, stating that AARP supports community rating and they were pleased to see that community rating was one aspect the study would address.


02:11 PM

Senator Tapia gave concluding remarks regarding the bill and distributed two amendments, L.001 (Attachment D) and L.002 (Attachment E), to the committee.
BILL:SB06-011
TIME: 02:12:16 PM
MOVED:Hagedorn
MOTION:Adopt prepared amendment L.001 (Attachment D). The motion passed without objection.
SECONDED:
VOTE
Johnson
Mitchell
Sandoval
Shaffer
Traylor
Hanna
Hagedorn
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:SB06-011
TIME: 02:12:27 PM
MOVED:Hagedorn
MOTION:Adopt prepared amendment L.002 (Attachment E). The motion passed without objection.
SECONDED:
VOTE
Johnson
Mitchell
Sandoval
Shaffer
Traylor
Hanna
Hagedorn
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


02:13 PM

Senator Hagedorn announced that amendment L.003 (Attachment A) would not be offered.
BILL:SB06-011
TIME: 02:14:51 PM
MOVED:Hagedorn
MOTION:Refer Senate Bill 06-011, as amended, to the Committee on Appropriations. The motion passed 7-0.
SECONDED:
VOTE
Johnson
Yes
Mitchell
Yes
Sandoval
Yes
Shaffer
Yes
Traylor
Yes
Hanna
Yes
Hagedorn
Yes
Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


02:17 PM -- Senate Bill 06-019

Senator Tochtrop, bill sponsor, introduced Senate Bill 06-019. She explained that the bill was recommended by the Interim Committee on Auto Insurance. She testified that that committee received a lot of testimony regarding the problems associated with payments for emergency medical services. She explained that the bill mandates that persons with auto insurance carry coverage for emergency medical services. She explained that a revised fiscal note will be prepared on the bill.









02:20 PM -- Rich Gebhardt, State Farm Insurance Companies, testified in opposition to the bill. He discussed the transition from no-fault auto insurance system to a tort system. He stated that auto insurers currently offer optional medical payments coverage to customers, but that many persons are electing not to purchase the coverage because they have health insurance that covers emergency services. He stated that the bill will subject consumers to increased expenses, and that the coverage is unnecessary. Mr. Gebhardt stated that there are 38 states that have a tort system, and, of those states, 25 do not mandate any form of medical payments coverage. He stated that no states require coverage specifically for emergency care. He stated that the bill could raise the costs of auto insurance from a minimum of $145 to as much as $700 a year, depending upon the age of the driver. He asked the committee to support the current tort system, which is resulting in cost savings for consumers. Mr. Gebhardt responded to questions from Senator Hagedorn regarding whether or not companies could make emergency medical payments as outlined in Senate Bill 06-019 without raising premiums. Mr. Gebhardt stated that would be actuarially impossible, stating that for a liability system to work, there needs to be a finding of fault. When fault is determined, the insurance company must indemnify the insured to the extent of fault, but that fault is often not determine right away. He stated that there is no practical way that a person could make payments from a liability system prior to the establishment of fault. He further responded to questions from Senator Hanna. Senator Hagedorn asked to what extent Medicare engages in subrogation. Mr. Gebhardt responded that Medicaid engages in subrogation. Senator Johnson asked how other states with a tort system fund emergency medical care. Mr. Gebhardt testified that many states have a state-funded system of emergency care. These states have created reimbursement funds, funded by state general funds or fees, and trauma care providers can apply for reimbursement from the funds. He further stated that the no-fault system may have encouraged an expansion of trauma care, but after the transition to tort, trauma providers have had to adjust to the end of rapid first-party payments. Senator Johnson asked how emergency medical coverage benefits would differ from a consumer's health insurance benefits. Mr. Gebhardt responded that there was no reason that a consumer should pay for emergency medical coverage if they have health insurance unless the person has a high-deductible health insurance plan and wants coverage for medical expenses incurred before the deductible is met.

02:48 PM -- Michelle Colaizzi, Colaizzi Agency Inc., stated that the transition from no-fault to tort has been good for her customers; the transition has been smooth and rates have gone down. She stated, under the tort system, her customers are able to pick coverages that they feel they need. She stated that Senate Bill 06-019 will be a big step backward and will increase rates and take away consumer choice. She stated that Senate Bill 06-019 is not the solution for problems with the trauma system. She responded to questions from Senator Shaffer about whether she has seen an increase in the cost of health insurance that corresponds with the decrease in auto insurance premiums. She testified that while health insurance rates have risen, she has not seen the direct correlation. Senator Johnson asked how the coverage required under Senate Bill 06-019 would differ from the medical payments coverage currently offered by auto insurers.



















02:53 PM -- Bill Imig, Property Casualty Insurers Association of America, testified in opposition to the bill. He stated that the transition from no-fault to tort has reduced auto insurance premiums for consumers. He spoke to testimony offered in the Auto Insurance Interim Committee that health insurance premiums have increased very little as a result of the transition. He stated that about one in four people who buy auto insurance purchase medical payments coverage and that the bill will result in duplicate coverage for individuals with adequate health insurance. He responded to a comment made by the bill sponsor that trauma centers have lost money as a result of the transition from a no-fault system to a tort system, stating that hospitals, of which trauma centers are a part, are making record profits and that shifting costs to auto insurance consumers when hospitals are making record profits does not make sense. He responded to questions from Senator Hanna about the effects of the transition from no-fault to tort on ambulatory services. Mr. Imig stated that some metro-area providers have weathered the change, but that the providers that based their systems on the old no-fault system have experienced an impaired source of funding. He discussed a study by the National Conference of State Legislatures, stating that there are no states that fund emergency response services by requiring emergency medical coverage. Rather, states fund trauma services through sales taxes, surcharges, and other methods. He further stated that Colorado has an Emergency Response Fund and the money in the fund is distributed for emergency response services.

03:03 PM -- Kevin Klein, Trauma Care Preservation Coalition and Colorado Fire Chiefs, distributed a handout to the committee (Attachment F), and testified in support of the bill. He stated that the fire service is the largest employer of pre-hospital care providers in the state. He described statistics related to traumas in Colorado. Mr. Klein stated that the transition from no-fault to tort has had a major impact on the emergency care system because the system was built with no-fault in place. The transition has resulted in an increase in the number of payments for trauma care made by health insurers, rather than auto insurers. He stated that, after the transition from no-fault to tort, payments for emergency medical coverage have been delayed and that, not only are payments delayed, but there has been a decline in the number of claims paid. Negotiated settlements are further reducing payments for pre-hospital care providers. He stated that 43.4 percent of the claims for pre-hospital care services go unpaid and without a stable source of funding, the sustainability of hospitals is in question. Rural hospitals, especially, may not be able to offer trauma services in the new payment environment. He stated that the cost of medical payments coverage is not expensive and, even with this coverage, consumers will still be paying less for insurance than under no-fault. He stated that the Emergency Medical Services fund does not fund any patient care, but pays for training and licensing of emergency medical technicians. He responded to a question from Senator Johnson regarding why additional medical payments coverage was necessary if an individual already has health insurance. Mr. Klein respond that the most effective way to pay for the trauma care system is through auto insurance because auto accidents cause the majority of traumas in the state. Senator Shaffer discussed the delay in payments to pre-hospital care providers resulting from the transition from no-fault to tort. Mr. Klein stated that emergency providers are collecting less money after the transition and this has been caused because some people don't have health insurance, the fact that some health insurance policies exclude automobile accident treatment, and by negotiated settlements. Mr. Klein stated that other states subsidize emergency trauma care. Mr. Klein further responded to comments made by Senator Mitchell regarding reimbursements to providers and liability claims. Mr. Klein stated that previously, pre-hospital bills were paid by insurance companies prior to subrogation.

03:29 PM -- Jeanne Robinson, consumer, testified in support of the bill. She discussed her personal experiences with an automobile accident. She stated that, in her experience, emergency medical coverage is inexpensive and having it avoids the issue of who should pay for emergency medical treatment. She testified that some agents are not good at explaining what coverages are necessary for their consumers. Senator Tochtrop stated that the auto insurance industry is not doing a very good job of educating consumers regarding who will pay for emergency care after an auto accident.









03:35 PM -- David Bressler, Weld County Paramedic Services, testified in support of the bill. He stated that the ability of Weld County Paramedic Services to meet the needs of its community have been affected by the transition from no-fault to tort. He stated that the transition has reduced the revenues available to fund emergency services and that customers have had difficulty understanding their coverages and rights under the tort system. He stated that consumers are often not aware if they need emergency payments coverage. He stated that the reimbursements for pre-hospital care from health insurers are less than they received under the no-fault system - for instance, Medicaid only reimburses seven cents on the dollar.

03:41 PM -- Steve Hoffenberg, Colorado Chapter of American College of Emergency Physicians, testified in support of the bill. He stated the problem is that basically, the emergency care system was built on personal injury protection insurance, and since the transition from a no-fault to a tort system, there has been a substantial decline in the collection of payments for trauma services. Many emergency medical service providers do not have the funding or resources to collect the payments owed to them. The impact of this problem is being felt throughout the emergency trauma system, and may result in many problems, such as a decline in training of emergency medical services providers. He said that the effects are especially felt in rural areas. He testified that specialists that are often called in on trauma cases are reluctant to see trauma patients because they are not being reimbursed and stated that much of the payment for emergency care is being transferred to Medicaid.

03:48 PM -- Dr. Lynn Parry, Colorado Medical Society, described a typical automobile trauma, concluding that trauma physicians are not being reimbursed for their services. She stated that payment for emergency care is critical for the citizens of Colorado, and that, if the current problem is not abated, it could erode the trauma system in Colorado.


03:51 PM

Senator Hagedorn announced that the bill would removed from the table and that the committee would take action on the bill on Thursday, January 26. Senator Tochtrop gave a wrap-up. She stated that if the state doesn't address payment for emergency and trauma services, the trauma and medical system could be jeopardized.


03:56 PM

The committee recessed.