TITLE: CONCERNING GOVERNMENTAL IMMUNITY FOR CERTAIN HEALTH CARE PROFESSIONALS EMPLOYED BY PUBLIC ENTITIES.

The bill would eliminate governmental immunity for physicians and dentists employed by public entities. It also would eliminate the current exemption for such individuals from purchasing excess commercial professional liability insurance. The bill would become effective upon signature of the Governor.

STATE FISCAL IMPACT SUMMARY	FY 1998/99	FY 1999/2000
State Revenues General Fund Other Fund
State Expenditures General Fund Cash Fund Exempt	$3,579,784 39,440	$4,356,768 39,440
FTE Position Change	None	None
Local Government Impact — None Identified.

All agencies of the state, except for the Department of Higher Education, currently provide liability coverage to the physicians they employ through the state’s Risk Management Unit, Department of Personnel. The unit has indicated that they receive almost no claims against physicians and dentists, and therefore the statewide assessments to provide liability coverage would not be significantly affected. The following departments employ physicians and dentists and have indicated that they would be impacted in the following ways:

• Human Services. The Division of Youth Corrections, Mental Health Institutes, and Institutional Programs for Persons with Developmental Disabilities employ approximately 70 physicians and dentists. It is assumed that these agencies would need to purchase liability insurance for these professional employees. It is estimated that such insurance would cost $631,464 ($592,024 General Fund and $39,440 Cash Fund Exempt) a year beginning in FY 1998/99.

• Public Health and Environment. The department employs six physicians. It is assumed that the department would need to purchase liability insurance for these professional employees. It is estimated that such insurance would cost $51,660 General Fund a year beginning in FY 1998/99. (This estimate does not include the cost of purchasing “tail liability” coverage, covering the liability for actions of persons formerly, but no longer employed by the department.)

• Corrections (DOC). The department utilizes the services of the Panel of Medical Consultants, a group of private physicians, to provide medical care to DOC’s inmates. It has indicated that the services of the panel would no longer be available without the current liability limits. It is assumed that the department would need to purchase liability insurance for these professional employees. It is estimated that such insurance would cost $136,100 GF in FY 1998/99 and $213,084 GF in FY 1999/2000. These estimates reflect the large number of claims filed against the DOC.

In addition, the Department of Higher Education employs physicians and dentists. The University of Colorado Health Sciences Center is the major employer of physicians and denstists and has been self insured since 1985. Based on actuarial analysis of their self insurance fund, it is estimated that potential losses to the fund would range between $3 to $5 million, requiring an increase of $4 million to support the self insurance fund. If the university were to continue to self insure up to the $150,000, it is estimated that this would cost $1.6 to $2.4 million a year or an average of $2 million a year; and would require $800,000 in FY 1998/99 and $1,500,000 in FY 1999/2000 to purchase excess liability coverage (in excess of $150,000). This additional expenditure of the university would total $2.8 million in FY 1998/99 and $3.5 million in FY 1999/2000.

Total state expenditures required to implement the provisions of this bill are estimated to be $3,619,224 ($3,579,784 GF and $39,440 CFE) in FY 1998/99 and $4,396,208 ($4,356,768 GF and $39,440 CFE) in FY 1999/2000.

This fiscal note implies that the following departments would require increased appropriations in FY 1998/99. Department of Human Services $592,024 GF and $39,440 CFE; Department of Public Health and Environment $51,660 GF; Department of Corrections $136,100 GF; and Department of Higher Education $2,800,000 GF.