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Colorado Bill Would Require More Insurance, Aid Hospital Collections

COLORADO SPRINGS, Colo. — Four years after no-fault auto insurance died a celebrated death in Colorado, trauma-care providers say the repercussions have put them on life-support.

The statewide switch to a tort system has saved drivers an average of 32 percent a year on auto insurance, the Rocky Mountain Insurance Information Association reported. Surveys have shown that 73 percent of Colorado residents oppose the idea of the state s requiring additional health coverage on their policies again.

But since July 2003, hospitals have lost $80 million a year on collections, at least partly because of the switch, according to the Colorado Hospital Association. Some ambulance companies collect only 30 percent of their bills. Some rural hospitals have a hard time finding specialists to serve on trauma calls because they aren t sure they re going to get paid, rural lawmakers say.

Sen. John Morse, D-Colorado Springs, is writing a bill that would raise money for ambulance companies, doctors and hospitals who treat life-threatening injuries. It would do so by requiring motorists to buy an additional trauma-care insurance policy and by adding $16 to their annual vehicle registration fees for a trauma fund.

Legislators from both parties who sat on an interim health care task force this summer agree that trauma funding has become a serious problem. They disagree on the solution — namely whether Morse s steps are necessary or whether money can be found in the budget from sources such as tobacco-settlement funds.

Trauma-care providers, who are watching the debate closely, are less concerned about the source of the money. But they need it — and quickly, they say.

We re at that point where no hospitals have closed their doors or stopped providing trauma services, but we could be there in a couple of years if we re not careful, said Sarah Blum-Barnett, a consultant with the Trauma Care Preservation Coalition.

No-fault insurance, which was state policy for 30 years, required drivers to buy insurance that covered the medical bills of people involved in accidents. But rates were rising at twice the national average, according to the Rocky Mountain insurance association, and in 2003, Colorado ended the practice.

Tort insurance, a policy shared with 37 other states, delays payment of many bills until fault is determined, meaning care providers take longer to get reimbursed. Other states have set up trauma funds through vehicle registration fees, drunken-driving fines and other traffic-violation surcharges to augment payments, Rocky Mountain insurance association Executive Director Carole Walker said.

But because these insurance reimbursements come from policies that may include deductibles, insurance agents often don t cut checks to the first responders — ambulance companies.

Memorial Hospital often used to get paid within 30 days, but now it must wait six months at times, said John Suits, associate administrator of business and government affairs.

Ute Pass Regional Ambulance District, based in Teller County, has seen repayments go from an average of 45 days to four months, Chief Executive Officer Tim Dienst said. Also, because many people cannot afford to pay their insurance deductibles and do not have a specific auto insurance coverage that pays for medical bills, the district now must write off 52 percent of its billable revenues rather than collect them.

These financial problems have not led to major layoffs, but smaller setbacks are piling up. Ute Pass, for example, is supposed to run two ambulances 24 hours a day and a third for 20 hours, but it often must cut the third schedule by six hours a day to save money, Dienst said.

Penrose Hospital has delayed replacement of older equipment because of lost revenues, trauma program manager John Gentzel said. It also has raised its patient rates higher than anticipated to make up for the money it can t collect, he said.

The people who do have insurance and can afford it, we re paying higher health care costs, Suits said.

Morse s bill would require all motorists to purchase trauma-pay insurance that would cover medical bills up to $15,000 for themselves or passengers in their car. The money would apply only to care performed in the first 72 hours after a crash and not long-term rehabilitation.

The legislation also would add a $16 vehicle registration fee to create a trauma-care fund that could be accessed by providers after other means of collection are exhausted. If approved, it would be the fourth — and largest — fee on registrations directed toward specific funds.

It s important because we need a trauma-care system throughout the state that s ready to spring into action throughout the state and has the capability to keep (residents) alive, Morse said.

Rep. Tom Massey, R-Poncha Springs, is running a bill to require trauma-pay insurance policies, and he has agreed to co-sponsor Morse s bill. But Massey is doubtful the registration-fee increase will pass, especially as a transportation panel is looking at raising the same fee for roadway improvements.

Insurance providers say the insurance mandate could be the most egregious part of the bill. Not only is it costly, but it harks back to the unpopular no-fault policy, Walker, of the insurance association, said.

No other state has an insurance mandate specifically for trauma care, Walker said. States that make drivers purchase general health coverage average only $6,800 in required coverage, she added.

There s a big concern that it s a slippery slope, that it smells like no-fault, Walker said of Morse s bill. Fifteen thousand dollars may not sound like a lot, but when you look at what s required in other states and what people buy, $15,000 is a high mandate.

Suits predicted that a number of trauma bills could come out of the session because the need is so great. He, like other trauma-care providers, said he backs Morse s plan.

It helps us recoup our expenses, Dienst said in agreement with Suits. It helps us put money in the bank so we can continue to do what we do, and that is 24/7 ambulance service in a timely, effective manner.


Sen. John Morse proposes to add $16 to the annual vehicle registration fee to pay for a trauma-care fund. Fees vary based on the age and value of a car, but there are three portions of the fee that go to specific accounts:

  • 25 cents to the Peace Officer Standards and Training fund
  • $1 for emergency medical services
  • $7, $10 or $12 (depending on the age of the car) to the Highway Users Trust Fund