Colorado Legislative Council Staff

STATE

CONDITIONAL FISCAL IMPACT

Drafting Number:

Prime Sponsor(s):

LLS 99-0182

Sen. Dyer

 

Date:

Bill Status:

Fiscal Analyst:

January 14, 1999

Senate Business Affairs

Will Meyer (866-4976)

 

TITLE:            CONCERNING THE RULE-MAKING AUTHORITY OF THE DIRECTOR OF THE DIVISION OF WORKERS' COMPENSATION.



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

Cash Fund


 


 

State Expenditures

Cash Fund


 


Future Contract Costs

FTE Position Change

0.0 FTE

0.0 FTE

Other State Impact: None identified

Effective Date: Upon signature of the Governor

Appropriation Summary for FY 1999-2000: No appropriation required for FY 1999/00; however an appropriation would likely be required in FY 2000/01.

Local Government Impact: None identified



Summary of Legislation


            The bill prohibits the director of the Division of Workers' Compensation from adopting rules that increase or decrease workers' compensation benefits or increase or decrease the overall cost of administering the Workers' Compensation Act. The bill provides for a exception to this prohibition with regard to the rules establishing the state average weekly wage and the medical fee schedule. The bill would become effective upon signature and would apply to cases of injuries occurring on or after that date.



State Expenditures


            The rule making procedure currently utilized by the division is provided for in Section 24-4-103 (4.5)(a)(II), C.R.S., of the State Administrative Procedure Act. It requires a state agency to provide "to the extent practicable, a description of the probable quantitative" impact of a proposed rule, "economic or otherwise". Subsection (4.5)(d) provides that, "If the agency has made a good faith effort to comply...the rule shall not be invalidated on the grounds that the contents of the regulatory analysis are insufficient or inaccurate". The provisions of this bill will require a level of analysis beyond what is currently required. The division indicates that it will be necessary to contract with outside consultants who have the necessary expertise to perform a comprehensive analysis to ensure that a proposed change would not have the effect of increasing or decreasing benefits or increasing or decreasing the overall costs of administering the Workers' Compensation Act.


            There are rules establishing ten injury specific treatment guidelines that will be affected by this bill. These treatment guidelines need to be updated to add, change, or delete diagnostic treatment procedures and to stay current with medical advancements. New guidelines were adopted last year, and the other guidelines were updated. As a result, no rules establishing or changing treatment guidelines will be needed in FY 1999/00. However, a number of these guidelines may need to be changed in the following fiscal year. The number that may need to be changed cannot be accurately estimated at this time.


            The division will contract with an actuarial firm to analyze the proposed changes. Based on the division's most recent experience, it is estimated that it will cost $33,000 to evaluate a single rule change. If more than one rule were changed, the cost of analysis, per rule, would likely decline significantly. The actual cost to conduct a comprehensive analysis in FY 2000/01 will depend on the ability of the division to successfully contract with an actuarial firm and the number of rule changes proposed. It is not possible to estimate the costs of this bill for FY 2000/01.



State Appropriations


            This fiscal note implies that no appropriation should be required in FY 1999/00. However, a future appropriation may be required in FY 2000/01.



Departments Contacted


            Labor and Employment