DENVER - Instead of imposing new fees and higher auto insurance rates, the Legislature is addressing the cash crunch in Colorado’s emergency rooms with a minor change that consumers may not even notice.

Senate Bill 41, which is near passing in the General Assembly, requires health insurance companies to pay car crash-related medical bills in 30 to 45 days.

Backers of the bill hope that will help ambulance services and hospitals that are struggling under the switch in 2003 from a no-fault insurance system to a tort insurance system.

“It’s just a move to help ease the transition between no-fault and tort, and to make sure people don’t get caught between their auto insurance and their health insurance,” said Sen. Jennifer Veiga, D-Denver, sponsor of SB41.

Colorado changed its insurance system in 2003 to get a handle on soaring auto insurance rates.

The old system was generous to hospitals and medical providers. Auto insurance companies paid all the costs up front, regardless of who was at fault in a crash, and emergency medical care providers — from ambulance companies to trauma surgeons — were paid well and quickly.

Coloradans had some of the highest auto insurance rates in the nation.

The move to tort allowed drivers to drop that medical coverage, the idea being that those with good medical insurance didn’t need it.

Now, only one out of four Colorado drivers pays for medical coverage on his or her car insurance policy — a big reason rates are lower.

The shift from a no-fault to a tort system has reduced rates by as much as 27 percent, the Rocky Mountain Insurance Information Center says.

But the tort system requires the at-fault driver to pay medical and other costs. Sometimes it can take years of legal wrangling to sort out liability.

Recently, health insurance companies have been holding off making payments to hospitals and ambulance companies until it was clear the cost would be picked up by one of the driver’s auto insurance policies.

That delay in payment means emergency care providers are waiting longer to get paid.

“We know, in some cases, payments are being made six months out from the time services are delivered,” said Sen. Bob Hagedorn, D-Aurora. “These small ambulance companies and hospitals in rural areas are impacted terribly by the late payments.”

SB41 would require health insurance companies to pay quickly. They then would seek reimbursement from the person who caused the crash once blame had been determined.

“The first responders and trauma care providers complained they weren’t getting paid in a timely manner,” said Sen. Andy McElhany, R-Colorado Springs. “This will make sure they are.”

Other proposed legislative fixes have been rejected. Senate Bill 19, which was defeated several weeks ago, would have required drivers to pay for additional medical coverage on auto policies. Senate Bill 221, defeated last week, would have required all drivers to pay a $10 annual fee for vehicle registrations to cover the cost of crash-related emergency medical care.

SB41 has already passed the House and Senate. There were some changes to the bill in the House, and the differences need to be worked out. Veiga said she’s confident SB41 will pass with bipartisan support.

But emergency medical providers say SB41 is a stopgap solution. Lynn Perry, president of the Colorado Medical Society, notes it does nothing to address the fact up to 15 percent of Colorado drivers don’t have health insurance.

“You only get paid promptly if the person you are taking care of has health insurance,” she said. “It doesn’t address the lack of coverage for people in auto accidents, and that’s the big issue.”

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By KYLE HENLEY - THE GAZETTE
 
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Copyright 2006, The Gazette, a division of Freedom Colorado Information.