Employers will save 59 percent of Workers’ Comp premiums with ColoradoCare.
by Ralph Ogden
Note: This is in response to recent opinion writing to decry Amendment 69, ColoradoCare, by Pinnacol Assurance Chief Executive Officer Philip Kalin.
In writing his opposition to Amendment 69 (ColoradoCare),Pinnacol executive Phil Kalin suggests that health providers outside its network of hand-picked physicians somehow care less about curing and relieving symptoms of injured workers than those inside its network.
Actually, ColoradoCare will benefit Colorado providers (who do in fact, tend to follow the Hippocratic Oath) in two important ways. First, they will be paid for treating work-related injuries and illnesses at the same rate as providers who treat non-work related problems, rather than the steeply discounted rates set in the Division of Workers’ Compensation fee schedules. Second, providers will no longer be required to keep separate sets of billing records for treating workers who are injured on the job. Thus, more providers will be willing to treat injured workers. The General Assembly can still require providers to provide employers and compensation insurers with copies of their treatment notes and periodic reports about the worker’s progress towards Maximum Medical Improvement (MMI).
In its 2015 annual report, Pinnacol reported reserves of $935,298,000 at the end of the year, an increase of more than $87 million over 2014. It also had net income of $98,571,000 in 2015. In the last few years, Pinnacol has unsuccessfully sought permission from The General Assembly to cease being a political subdivision of the state and become like every other for-profit insurer, and to expand its operations into neighboring states. Pinnacol isn’t subject to administrative control by any state agency or officer. The governor appoints its board.
ColoradoCare–a nonprofit cooperative owned by all Coloradans with an elected board of trustees–will ensure medical care for all for less and be accountable to all Coloradans.
Medical expenses account for approximately 59% of every dollar spent from workers’ compensation premiums. Since ColoradoCare will assume responsibility for these expenses, all workers’ compensation premiums, including Pinnacol’s, should decrease by this same 59% figure.
According to Pinnacol’s 2015 annual report, it collected $615,733,000 in premiums that year. Reducing this figure by 59% means that with ColoradoCare, policy holders will pay $363,282,470 less in workers’ compensation premiums for the same or better medical coverage they have now.
The remaining $252,450,530 Pinnacol collects would be used to pay temporary disability and permanent impairment benefits.
With ColoradoCare’s passage, part of the General Assembly’s task will be to insure the continuation of a fair system for qualified, Level II physicians to determine permanent impairment ratings. Furthermore, MMI determinations by a treating physician could continue to be challenged by means of an Independent Medical Examination (IME),just as they are now. These procedural safeguards for employers would remain.
Having ColoradoCare pay for medical care for injured workers will insure that all workers receive adequate and immediate medical care, even when there is a dispute over whether the injury or illness is compensable. It will eliminate conflicts between workers’ compensation insurers, who claim that the injury or illness did not arise out of and in the course of employment, and health insurers, who claim that it did. These conflicts often arise in cases such as carpel tunnel syndrome, back injuries, falls, vision problems, heart attacks, and cancers. They also arise in disputes over whether a person is an employee or an independent contractor. Workers who in the past had no health insurance and whose compensation carrier denied compensability will have coverage. This insures that they will get the treatment they need and will return to work as quickly as possible, thus saving employers money resulting from sick leave.
Finally, by allowing all Colorado residents to choose their own primary care providers, these providers can effectively integrate treatment for work-related injuries and illnesses with regular preventive care — something that Pinnacol is already doing (by coordinating treatment of injured workers with at least one private health insurer) and seems to endorse.
Because compensation insurers remain liable for temporary disability and permanent impairment benefits, they will have the same incentive to help employers maintain safe workplaces.
Ralph Ogden is an attorney who edited the workers’ compensation column for the Colorado Lawyer, the journal of the Colorado Bar Association, from 1993 until his retirement in 2012. He authored over forty articles on workers’ compensation issues. He also represented workers who were injured on the job during this period. He also chaired the committee that drafted Amendment 69.