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 proposed rules will have limited economic effect (either positive or negative).  The intent is to maintain consistent application of the rules adopted two years ago.  The proposed rules will reduce litigation and streamline decision making with regard to prior authorization.  This will not result in a widespread economic benefit, but will assist in fulfilling the legislative mandate to resolve disputes efficiently without the need for litigation.  

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 impact on costs or revenues is anticipated as a result of the rule changes.  

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

The current system has been operational for two years.  Over that time, the vast majority of insurers have obtained new reports when there has been a change in the underlying facts.  Obviously, this approach would not incur any additional new costs to the system; however, it would also not accrue any of the benefits of the proposed amendments.  
	
While rare, the use of overly-stale medical reports carries a significant cost for the injured workers.  They are required to litigate the request for medical treatment, which not only contradicts the intention of the Workers’ Compensation Act but also can substantially delay medical treatment.  
 
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.  

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.

Requiring a new medical report if more than thirty days have elapsed between the first report and the renewed request for prior authorization.

While the benefits of this alternative would be similar to the proposed amendment, the costs would be substantially higher. This alternative would impose greater costs on insurers by requiring more frequent medical reports in order to deny prior authorization for medical treatment has been previously reviewed and determined to be not related and/or neither reasonable nor necessary.  The use of any strict expiration date for medical reports would require either a new exam or record review even where the underlying facts haven’t changed.  This would impose a substantial cost on insurers without a corresponding increase in benefits.      

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