S.b. 78: Colorado's No-fault Law Takes a New Direction
| Publication year | 1996 |
| Pages | 115 |
| Citation | Vol. 25 No. 11 Pg. 115 |
1996, November, Pg. 115. S.B. 78: Colorado's No-Fault Law Takes a New Direction
S.B. 78's PIP claim-handling changes can be better understood against a brief legislative background. Senator Joan Johnson, D-Adams County, drafted S.B. 78 as a remedy for PIP claim problems encountered by a legislative assistant who was injured in an automobile accident. Each change reflected the senator's solution to a particular problem that had been faced by her aide.
Insurers greeted the bill with alarm, claiming it would severely hamper their ability to manage claims for PIP medical and rehabilitation procedures, leading to substantially increased claim costs and higher insurance premiums. Those arguments failed to take the day in the face of sixty-five unhappy customers testifying at the behest of the bill's proponents, however, and it passed out of the Senate Business and Labor Committee on a 5-4 vote.
Following the committee hearing, the senator agreed to meet with representatives of all interested parties to address its unintended impact on consumers, as well as its effect on other interested parties, including hospitals, doctors, managed care companies, and the Colorado Division of Insurance. The group emerged after several meetings with changes to the PIP claim-handling system that were intended to resolve the senator's concerns and to cure some other longstanding inefficiencies and causes of disputes. The amended bill moved through the legislature essentially intact and was signed by Governor Romer on May 2, 1996.
Perhaps the most notable change made by S.B. 78 was the creation of the PIP Examination Program.(fn2) PIP policies include provisions that allow the insurance company to obtain examinations of persons making PIP claims from health care professionals other than those treating the patient. Insurers believe they need these examinations to help determine if a PIP claimant's injuries were caused by the accident in question, or whether injuries that were caused by the accident are being appropriately treated.(fn3) Insurers use the results of these examinations to help make PIP payment decisions.
There is often a perception outside the insurance industry that doctors who perform these examinations are not entirely objective and that their opinions should not carry more weight with the insurance company than a treating doctor's. This basic conflict has been a substantial source of litigation over PIP claim handling.
The PIP Examination Program is designed to reduce disputes related to PIP examinations. It is supposed to assure objectivity through a pool of examiners selected by the Colorado Division of Insurance, affirm the right to obtain outside medical opinions by both insurers and PIP claimants with certain limits, and provide incentives for finality of claim payment decisions made using the program.
S.B. 78 requires the insurance commissioner to promulgate a rule establishing the PIP Examination Program "for the purpose of timely investigation and resolution of disputed PIP claims. . . ."(fn4) An advisory committee will be appointed to assist the Commissioner in establishing the program,(fn5) which will likely be modeled after the independent medical examination ("IME") program already in place for workers' compensation claims.(fn6)
The PIP Examination Program will be the exclusive method for obtaining an IME relating to a disputed PIP claim, except in the case of PIP coverage provided by an insurer through a managed care organization.(fn7)...
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