Final
STAFF SUMMARY OF MEETING
AUTO INSURANCE SYSTEM
Date:
08/09/2005
ATTENDANCE
Time:
10:05 AM
to
03:57 PM
Cadman
X
Carroll M.
X
Place:
LSB A
Cerbo
X
Cloer
E
This Meeting was called to order by
Gordon
*
Representative
Coleman
McElhany
X
Tochtrop
X
This Report was prepared by
Wiens
*
Jeanette Chapman
Veiga
X
Coleman
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed:
Action Taken:
Interim Committe on Automobile Insurance
-
HOSPITALS AND MEDICAL CARE PROVIDERS
10:08 AM
Larry Wall, Colorado Health and Hospital Association, provided a handout to the committee (Attachment A). He discussed trends in payment for traffic accident related injuries in the years since no-fault was repealed. He noted that generally payment for injuries from vehicle accidents has shifted from auto insurers to health insurers including HMOs and Medicaid insurers. The process for recovering costs for insurers has become much less predictable as it may take weeks or months to determine who will be responsible for payment. Administrative costs to deal with claims have increased including increased paperwork, new staff, sending claims to collection agencies, and other issues. He explained the term "dual billing," which occurs when individuals submit claims to both health and automobile insurance companies to ensure their costs will be covered once fault is established.
10:24 AM
Mr. Wall continued his discussion indicating that
consumers are confused about what kind of insurance they have and there is added confusion regarding the process for determining who is responsible for payment in the event of an auto accident. In addition, consumers have said they are discouraged by agents to include medical payments coverage pay with their auto insurance coverage. Agents are alleged to be telling consumers that their medical insurance is now adequate for any injuries sustained in an automobile accident. Representative Cadman questioned whether such stories are anything more than hearsay and asked that Mr. Wall determine if there is a more factual basis for the claim. Senator McElhany asked for clarification of who is responsible for covering an insured person if the other driver is at fault. He also asked whether there is a prompt pay requirement for health insurance. Senator Veiga asked if the Health and Hospital Association had been in contact with other states to determine ways to support trauma care. Mr. Wall indicated the association has begun those discussions and that the state may want to consider a means to support trauma centers.
10:34 AM
Steve Shapiro, Brain Injury Association, spoke about catastrophic injuries in a tort system. He walked the committee through an example of an individual's experience with a catastrophic injury under no-fault versus his or her experience under a tort system. For those without health insurance at all, physicians frequently use a lein system by which the physician must wait for payment until the determination of fault is made. The physician must absorb the costs of trauma patients and may have to wait for up to three years to be paid. A cottage industry has developed of companies who purchase liens from the physicians. These people, rather than the physicians, eventually collect the money from the insurers. The alternative for the uninsured is self pay, which may have unfortunate results to the injured's financial situation. Mr. Shapiro stated that prompt medical payments would help since under tort the obligation to pay occurs when the case is closed. One possible suggestion would be a catastrophic injury fund that would cover severe injuries such as spinal injuries or amputations. Representative Coleman asked Mr. Shapiro to provide information about other states' catastrophic injury funds.
10:48 AM
Mikayla Shannon, Quality Healthcare Coalition, talked about the impact of the new tort system on members of the Coalition, which includes trauma clinics as well as specialists, based on a poll of their membership. She provided a handout to the committee (Attachment B). Generally, the poll found that trauma clinics cover costs by attorney liens and group health insurers. Specialists, conversely, indicate they anticipate payment from insurance or self-payment. In addition, it takes an average of 6 months for clinics to receive payment for services, versus 60 days for specialists. Trauma services are provided up-from, while specialists' services are provided later.
11:01 AM
Specialists.
Tom Friermood, Panorama Orthopedics and Spine Center, discussed the impact from his own perspective. He described the development of trauma care and the specialization of trauma centers to deal specifically with it. Providing this care is quite expensive. Under no-fault, trauma clinics received payment from the auto insurers that covered a rate reflective of that service. This rate was higher than the rate paid by managed care which is set by a Medicare based payment rate specific to the state. Now that payment for trauma care is often covered by health insurance, trauma centers have seen a 40 percent drop in payment. In addition, payment is often delayed. This change is particular to level one trauma centers. Dr. Friermood indicated his belief that trauma services are not sustainable under the current system. He stated that the impact on the market for trauma care is that physicians are leaving the practice of providing trauma care or leaving the state altogether. He suggested that moving trauma out of the managed care system and implementing a reimbursement method would be more successful. Senator Tochtrop asked whether other states receive different medicare rates than Colorado. Indeed, physicians are not paid at the same rate in Colorado as in other states for the same services. Physicians choose to go to other markets because reimbursement rates are better.
11:26 AM
Tauma Centers.
Dr. Andrew Berson, Memorial Hospital, Colorado Springs, spoke about the impact of tort on trauma centers. He provided a handout to the committee (Attachment C). He agreed that the current trauma system under tort is not sustainable because of gaps in coverage and problems with the delivery and availability of health care for injuries received in automobile accidents. (See his handout for comments).
11:38 AM
Dr. Steven Hoffenberg, emergency physician, discussed the impact on physicians in hospital emergency departments. There are currently problems in recruiting physicians to staff emergency departments. While that shortage has multiple factors, the changes in Colorado with the switch from no-fault to tort has further negatively impacted this problem. The current trauma system in Colorado developed based on a no-fault insurance system, so the change to a tort system has been dramatic for the state's trauma care providers. Providers would like to see assistance in dealing with funding for trauma care. Representative Carroll asked for suggestions for funding assistance. Dr. Hoffenberger indicated that other states have used fees, state general funds, or tobacco funds to assist with funding trauma care. Representative Coleman asked the doctor to provide funding suggestions.
11:45 AM
Dr. Charles Mains, discussed the impact on patients who need trauma care. He provided an example of a particular patient's experience as a result of a car accident. He cited a study in 2002 that indicated trauma care was in serious trouble across the country. There have been follow up studies that show Colorado as particularly at risk since the switch from no-fault to tort.
11:57 AM
Kathy Baxley, Weld County Paramedic Services, spoke from the perspective of emergency medical technicians.
12:01 PM
The committee recessed for lunch.
01:29 PM
The committee came back to order. Representative Coleman discussed the order for the afternoon's proceedings.
01:30 PM
Dr. Patricia Gabow, Executive Director, Denver Health Medical Center, discussed the financial impact on Denver Health. She provided a handout to the committee (Attachment D). Prior to the tort system, approximately 70 percent of motor vehicle accidents were paid for by medical or auto insurance. Currently 42 percent are paid by medical or auto insurance and approximately 30 percent are uninsured. Of those paid by insurance, payments are 75 percent of the actual costs, for those who are "self pay" or uninsured, repayment rates are 10 percent. She discussed the possibility of creating a trauma fund, and, in conjunction with that, doing a statewide needs assessment to ensure that funds are dispersed adequately. She noted that Washington has one level one trauma center in Seattle that serves the entire state, Idaho, Oregon, and Alaska, whereas Colorado has four in the metro area. She pointed out the importance of limiting the number of level one trauma centers because of their expense as well as to ensure adequate experience of the staff.
PUBLIC TESTIMONY
02:09 PM
Monika Valentine, OccMed Colorado, discussed the experience of her clinics with regard to who pays for care for individuals in automobile accidents. She expressed concern that she is hearing anecdotal stories that insurance agents are telling customers that their health insurance covers them in the event they are in an accident with an uninsured motorist. She added that this is not necessarily the case. She discussed the administrative costs of providing care in Colorado.
02:21 PM
Dr. Tricia Shaar, chiropractor, talked about an informal survey she conducted of insurance companies. She provided a handout to the committee (Attachment E). She indicated that there is a great deal of confusion, misinformation, and ignorance about adequate, necessary, or required insurance on the part of both insurance agents and consumers.
02:37 PM
Dr. David Evans, chiropractor, spoke about the impact on his practice of the switch from no-fault to tort. He provided a handout to the committee (Attachment F). He discussed his proposals for improving the current system to ensure individuals are adequately covered.
02:56 PM
Greg McCall and Phil Plante, American Physical Therapy Association, spoke about the impact on their individual practices of the end of no-fault. They provided a handout to the committee (Attachment G).
03:06 PM
Jonathan Graves, representing himself, spoke about his experience in an automobile accident. He responded to a question from Senator McElhany.
03:13 PM
Roger Veach, representing himself, spoke about his experience as a rehabilitation specialist. He provided two handouts to the committee (Attachments H and I). He responded to questions from the committee.
03:19 PM
Julie Knoll, representing herself, responded to some of the preceeding discussion.
HEALTH INSURANCE PROVIDERS
03:24 PM
Dorien Rawlinson, Rocky Mountain Health Plans, spoke about her company's responses to the elimination of no-fault insurance. She provided a handout to the committee (Attachment J). Rocky Mountain Health Plans believed that there would be an increased cost burden to health insurers under a tort system and their preliminary data suggests substantial cost shifting from 2003 to 2005. Representative Carroll asked for data on how many claims are "clean" claims and how many claims are "wait and pay later" claims. She also asked for the number of cases in which the insurance company pays the initial claim and then seeks reimbursement from the at-fault driver's insurance company.
03:35 PM
Jeff Smith, Anthem Insurance, spoke about paid claim increases since tort. He provided a handout to the committee (Attachment K). He noted that Anthem has seen a significant increase in costs, including administrative costs, which have been passed on to employers who purchase the plans.
03:43 PM
Jerry McElroy, Kaiser Permanente, spoke from the perspective both as a health care provider as well as an insurance company. Senator Tochtrop asked about HMO patients who receive emergency care from another provider. Managed care laws require that Kaiser pay for emergency care regardless of where it is provided. When a patient is stable, Kaiser will try to get them back to the Kaiser system for the rest of their care. In the meantime, Kaiser will pursue reimbursement from the at-fault provider for Kaiser's costs.
03:54 PM
Representative Coleman opened discussion to the committee regarding how to proceed in the next meetings.
03:56 PM
The committee adjourned.