NOTICE OF HEARING TO CONSIDER AMENDMENTS TO THE
WORKERS’ COMPENSATION RULES OF PROCEDURE, 7 CCR 1101-3

Notice is given of a public hearing to afford all interested persons an opportunity to be heard prior to the adoption of proposed amendments to the Workers’ Compensation Rules of Procedure, 7 C.C.R. 1101-3 as described below.  The Director of the Division of Workers’ Compensation has the authority to promulgate rules pursuant to the Workers’ Compensation Act as set forth in section 8-47-107 as well as section 8-42-101(3) C.R.S.

Date and Time of Hearing:		August 6, 2007
					9:00 a.m. 

Place of Hearing:			2nd Floor Conference Room
					633 17th Street
					Denver, CO

The public hearing will be held in accordance with the provisions of the Colorado Administrative Procedures Act, section 24-4-103, CRS.  Any interested party is invited to appear at the hearing and testify or to submit written data, arguments or position papers to Bob Summers, Director, Division of Workers’ Compensation, 633 17th Street, Suite 400,  Denver, CO  80202.  Any written submissions should be submitted to the Director prior to the hearing on August 6, 2007.   

The topics to be considered are:

Rule 16
Revisions to language and standard terminology, revisions to or clarification of administrative procedures, requirements and related billing forms required to implement the Division Medical Treatment Guidelines and Medical Fee Schedule.

Rule 18
Revisions to clarify or update the language of the Medical Fee Schedule; revisions to the medical billing codes systems; update of forms, fees and relative values; revisions to medical requirements, procedures and payments as they relate to the Medical Fee Schedule.

Proposed rule revisions will be available at the Department’s website on or before June 8, 2007.  Copies of the proposed rules, the proposed statement of basis and purpose, and a regulatory analysis will also be available on August 1, 2007 at the Division’s Customer Service Office, 633 17th Street, 4th Floor, Denver, Colorado, or on the website.

			

Bob Summers					June 7, 2007
Director              				Date

STATEMENT OF BASIS AND PURPOSE FOR
AMENDMENTS TO THE WORKERS’ COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

BASIS:  §8-47-107, C.R.S. provides the Director of the Division of Workers’ Compensation with authority to adopt and amend proper rules and regulations to govern the proceedings and hearings of the Division.  The Director also is given authority and directed to adopt rules concerning specific matters that fall within the Workers’ Compensation Act.  For instance, §8-42-101(3)(a)(I) requires the Director to annually review the medical fee schedule established by the Division.  

PURPOSE:  These rules will update, revise or clarify previous Workers’ Compensation Rules of Procedure. The proposed revisions identify and clarify procedures and requirements, update and clarify language, fees, forms and payments contained within the rules.  Further, the rules will update policy and reflect statutory changes.

The rules address the following subjects:

•	Rule 16     Utilization Standards updates to standard terminology, revision of administrative procedures, requirements and forms.  This rule is used in conjunction with, and to implement the Medical Treatment Guidelines and Medical Fee Schedule.

•	Rule 18    Medical Fee Schedule required by statute, this rule sets out maximum allowable fees for health care and related services falling within the purview of the Workers’ Compensation Act. Amendments revise, clarify and update language, terminology, procedures, requirements, billing codes, forms, fees, payments and relative values associated with the fee schedule. 

Pursuant to §24-4-103(4)(b), C.R.S., the Director finds that: 1) there is a demonstrated need for the rule amendments; 2) the proper statutory authority exists for this regulation; 3) to the extent practicable, the rules are clearly stated so that their meaning will be understood by any party required to comply with the regulation; 4) the rules do not conflict with other provisions of law; and 5) the duplicating or overlapping of the regulation is explained by the agency proposing the rules.

			

Bob Summers					June 7, 2007
Director              				Date         

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.

These rules revise, update or clarify the current Rules 16 and 18.  Amendments to Rules 16 and 18 reflect revisions or updates to terminology, billing codes, rule language, procedures, requirements, forms, payments and exhibits related to the medical fee schedule. The rules should increase efficiency and assist persons in implementing required actions.  

The medical fee schedule sets maximum rates for professional services, and the facility fee portions apply to all providers who bill facility fees (i.e., hospitals, urgent care facilities, ambulatory surgery centers).  The Division’s analysis of the fee schedule, including the facility fee sections estimates that the overall impact of the proposed rule will be less than one (1) percent increase in total system costs. Premium rates actually charged by carriers to employers vary depending on a variety of underwriting and competitive factors, and are not directly tied to the fee schedule.  

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.  The costs for updating the billing system for the Workers’ Compensation Major Medical Insurance Fund will be absorbed with existing resources by the Division of Workers’ Compensation.

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

Promulgation of a medical fee schedule to be effective January 1 is required by statute, so failing to implement that rule would result in the Division being out of compliance with statute.  

The fee schedule will require updating of programming to computer systems, as most billing is performed electronically.  The proposals regarding facility fees are based on Medicare billing methodologies, which are already used by medical facilities, thereby reducing the impact of the necessary programming. Overall, the increase in predictability, fairness, and cost control should more than repay the costs in computer programming and maintenance. 

Providing small increases in the medical fee schedule when appropriate for some of the professional areas reflects the recent increases in the cost of medical services.  Not providing incremental increases could result in a larger increase in the future, making it hard for Colorado participants to prepare and include such increases in their budgets.  Such unpredictability is particularly difficult for small businesses that have fewer discretionary dollars in their budgets.  In addition, resulting cost pressure could reduce access to medical care as well as accelerate the consolidation of health services.  

Additionally, without implementation of the amendments Colorado’s medical fee schedule will not have up-to-date medical billing codes which are regularly updated to keep current with medical technology and treatment.  Not having updated codes will require payers and providers to spend more time researching and cross-referencing codes.  The uncertainty or disagreement regarding proper coding will also increase the number of disputes between payers and providers.  

The other non-fee changes should decrease uncertainty and increase efficiency.  Therefore, not taking this action would result in a missed opportunity to clarify requirements and increase efficiency.

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.  Updating the fee schedule is required by statute and is necessary to provide equitable compensation and assure injured workers’ access to quality health care.  

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.

In performing the statutorily required updating of the medical fee schedule, different methods were considered.  As discussed above, in terms of the professional and facility fees the purpose is to provide equitable reimbursement that will provide access to quality care, while keeping overall costs as low as possible. Providing regular updates of codes and relative value systems is necessary for efficient budgeting and maintenance by the workers’ compensation community. 

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 Health and Hospital Association
Colorado Association of Commerce and Industry
Mountain States Employers Council
Colorado Self-Insurers Association
				   Colorado Medical Society