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Tort Has Gap, Panel Told ; Health Care Providers Say Plan Faulty

Posted on: Wednesday, 10 August 2005, 09:03 CDT

The tort auto insurance system costs Kaiser Permanente $15 million a year.

To compensate, the health plan has increased health insurance premiums 2 percent this year and will add 1.5 percent next year.

That amounts in 2006 to an extra $4.50 a month for singles, $13 a month for families.

"We think that's a pretty good hunk of money to ask people to pay," Jerry McElroy, director of government relations for the state's third-largest health plan, told the Interim Committee on Auto Insurance on Tuesday.

Since tort went into effect, doctors and ambulances involved with accident victims have been stripped of payments to cushion operational costs. The result is a gap in coverage, providers say.

Lawmakers are meeting this summer to study the problem and will meet again Aug. 23.

Under the old no-fault system, insurers would pay to cover motorists' injuries regardless of who was at fault in an accident.

Now, only the at-fault motorist's insurance will pay.

The question of who is at fault has led to court battles and payment delays.

In addition to Kaiser's report, a host of other health care providers outlined their ills to the committee.

Physical and occupational therapists say payment delays have forced them to cap their load of accident patients. Others have shuttered their doors.

"If you have a mild traumatic brain injury, your most important treatment is occupational therapy," said Steve Shapiro, executive director of the Brain Injury Association of Colorado. "Now, you don't have occupational and speech therapists because nobody pays them."

Trauma surgeon Dr. Charlie Mains of St. Anthony Central Hospital testified that trauma doctors have left Colorado because they can't stomach the payment hassles.

"Today's meeting proves that tort has created a huge gap in funding for health care providers," said Rep. Fran Coleman, D- Denver.

Bill Imig, a lobbyist for auto insurers, agrees that trauma centers may be underpaid.

But he said he believes the money must come from the public - either through fees or state taxes - not auto insurance premiums.

The public already is paying more.

Colorado taxpayers under tort foot the bill for double the auto accident patients than under no-fault.

Medicaid, the state-federal program for the poor, paid to care for 363 accident victims in 2004, up 137 percent from 153 in 2002.

According to hospital data, that includes 69 patients with cases that cost more than $100,000 each, or a price tag of at least $6.9 million.

Meanwhile, the number of all hospital Medicaid cases rose by 13.8 percent.

INFOBOX

Tort trends

Two years into tort, several trends seem clear from the first two Interim Committee on Auto Insurance meetings:

* Consumers are paying less for auto insurance, and they're getting less coverage. Insurance Commissioner David Rivera said that immediately after the switch, overall premiums dropped 13 percent. Premiums dropped 25 percent for liability coverage only. And premiums for total coverage, without medical insurance, decreased 15 percent. Lawmakers disputed his numbers, saying they don't reflect the true value of no-fault - with its generous medical coverage - when compared with tort.

* Health insurers are increasing rates in response. Insurers reported their rates went up between 0.03 percent and 5.9 percent in the first year after tort.

* The trauma system says it is being hurt by the new law, specifically because fewer people than expected - between 10 percent and 20 percent of drivers - have bought additional coverage for medical payments.

* The time it takes to process claims and collect payments has increased, and some hospitals and clinics are selling their accounts receivable to third parties for 50 cents on the dollar.

Sources: Division of Insurance, testimony to the Interim Committee on Auto Insurance

Source: Rocky Mountain News

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