Colorado Legislative Council Staff

STATE

FISCAL IMPACT

Drafting Number:

Prime Sponsor(s):

LLS 99-0020

Rep. Grossman

Sen. Epps

Date:

Bill Status:

Fiscal Analyst:

January 27, 1999

House HEWI

Will Meyer (866-4976)

 

TITLE:            CONCERNING THE CONDUCT OF HEALTH COVERAGE PLANS WHEN MAKING DECISIONS REGARDING HEALTH CARE SERVICES OF COVERED PERSONS, AND, IN CONNECTION THEREWITH, EXTENDING THE SCOPE OF REQUIRED REVIEW PROCEDURES FOR SUCH DECISIONS AND ESTABLISHING A CIVIL RIGHT OF ACTION AGAINST HEALTH COVERAGE CARRIERS THAT ACT NEGLIGENTLY WITH RESPECT TO SUCH DECISIONS.



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

Cash Fund


 


 

State Expenditures

Cash Fund


$4,500


 

FTE Position Change

0.0 FTE

0.0 FTE

Other State Impact: None

Effective Date: July 1, 1999.

Appropriation Summary for FY 1999-2000: Department of Regulatory Agencies, Division of Insurance: $4,500 Division of Insurance Cash Fund

Local Government Impact: None



Summary of Legislation


            This bill requires health coverage plans to offer its policyholders the option of an expedited binding arbitration process prior to the plan making a determination that it will deny a request for reimbursement for, or coverage of, medical treatment or other benefits on the grounds that the treatment or covered benefit is not medically justified. The bill requires plans to make this option available, in addition to the internal review process already required pursuant to rule, and requires the arbitrator to make a decision within 30 days after the arbitration hearing. The bill also adds new language to the statutes concerning "Civil Liability of Managed Care Plans", and includes the requirement that carriers providing coverage through a managed care plan exercise reasonable care when making decisions about the provision of health care services, including experimental treatments, and making them liable for damages for harm to a covered person proximately caused by any decision made by the plan.


State Expenditures


            The Division of Insurance will require $4,500 in FY 1999/00 (250 hours of staff time at a cost of $18.00 per hour) to develop and adopt a new complex regulation specifying expedited arbitration procedures. The division will also need to amend an existing regulation. This would have a minimal impact on the workload of the division. This increase in workload could be absorbed by current staff, but may require re-prioritizing existing workload. This bill would not have any impact on any other state agency, or unit of local government.


            Division of Insurance - Effective Date. The effective date of July 1, 1999 will require insurers to file supplemental policy and form filings with the division and will have a minimal impact on both the insurers and the division. This impact could be avoided if the effective date were changed to January 1, 2000.



State Appropriations


            This fiscal note implies that the Department of Regulatory Agencies, Division of Insurance, should be appropriated $4,500 cash funds in FY 1999/00 from the Division of Insurance Cash Fund.



Departments Contacted

 

            Regulatory Agencies              Judicial Branch