REGULATORY ANALYSIS
FOR AMENDMENTS OF RULES 16 AND 18
OF THE WORKERS' COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

1.	Description of classes of persons who will be affected by the rules, including classes that will bear the costs of the rules and classes that will benefit from the rules.

The classes of persons affected by the rules are all persons and entities involved in the Colorado Workers’ Compensation system.  This includes, but is not limited to, injured workers, health care providers, insurance carriers, third party administrators and employers.

2.	Description of the probable quantitative and qualitative impact of the proposed rules, economic or otherwise, upon the classes of affected persons.

The adopted rule restructures the DIME process.  Since it was first introduced, the requirement to obtain a Division Independent Medical Exam prior to litigating the issues of maximum medical impairment and/or whole person impairment has served to dramatically reduce litigation.  In the past fifteen years, the fee for such an exam (paid to doctors) has not been increased.  Over that same period the complexity of contested cases has increased.  The result of these two factors was doctors being required to do more work for less remuneration, and ultimately to less doctors being willing to provide this service.  

The adopted rules ease some of the burden resulting from complex cases to by requiring a chronological format for submission of medical records and prohibiting duplicate records.  The rules also increase the fees, from a flat rate of $675 to a tiered system based on claim complexity.  These changes will retain doctors in the system and encourage new doctors to perform these exams.  

More doctors performing DIMEs means better outcomes and less litigation, which both offset the increased cost and administrative burden.  In recognition that some claimants may not be able to pay the new fee, the standard for indigence will be reviewed on an annual basis.  

3.	Probable costs to the agency and other agencies of the implementation and enforcement of the proposed rules and any anticipated effect on state revenues.

No significant impact is anticipated.  The Division maintains a unit dedicated to overseeing the DIME process. The procedural demands of the adopted rules can be met with existing resources.  Increased fees for the DIME will be paid to doctors, not to the state.    

4.	Comparison of the probable costs and benefits of the proposed rules to the probable costs and benefits of inaction. 

Inaction would pose a significant threat to the ability of the DIME program to retain doctors, as well as to the quality of the examinations being performed.  The proposed rules do create a new requirement for respondents to format medical records prior to submission, an administrative cost some insurers already undertake voluntarily.  The proposal also increases the cost to a requesting party for a DIME.  The benefits are an improved pool of doctors and a more efficient and stable system.  

5.	Determination of whether there are less costly or less intrusive methods for achieving the purpose of the rules.

There are no known less costly or less intrusive means.  The proposed rule is the result of nearly two years of stakeholder outreach and consultation.  Through extensive stakeholder engagement, the Division has determined the proposed rules represent the least intrusive, most efficient mechanism for accomplishing the statutory goals of the DIME program.   

6.	Description of any alternative methods for achieving the purpose of the proposed rules that were seriously considered by the agency and the reasons they were rejected in favor of the proposed rules.

Alternative tiers for DIME fees were explored; however, none of the alternatives adequately balanced the work being performed by physicians with the need to ensure accessibility for all parties to this system.  

As noted above, stakeholder groups conduct a series of extensive meetings to review the current system and draft the rules.  The initial rule proposal included mandatory color-coding and sorting of medical records.  Based on hearing testimony, this process was determined to be overly burdensome for respondents while not providing sufficient value to medical providers.  The adopted rules require medical records be submitted in chronological order without duplicates.   

Copies of the Notice of Public Hearing were provided to the:

Colorado Association of School Boards
Colorado Counties, Inc.
Colorado Municipal League
Special District Association of Colorado
Colorado Hospital Association
Colorado Association of Commerce and Industry
Mountain States Employers Council
Colorado Self-Insurers Association
				   Colorado Medical Society