SYNOPSIS OF HB 03-1321 A BILL FOR AN ACT CONCERNING AUTO INSURANCE HOUSE SPONSORSHIP Wiens, Stafford, Lee, Brophy, Clapp, Coleman, Crane, Lundberg, May M., McCluskey, and Rose SENATE SPONSORSHIP Johnson S., Evans, Arnold, Dyer, Entz, Jones, and Kester House Committees Business Affairs & Labor Senate Committees Defines an accident as an unforeseen, unplanned, or unintended event that causes bodily injury or property damage Economic loss includes the cost of reasonable and necessary medical and rehabilitation expenses, loss of earnings, funeral costs, and essential services; and does not include pain and suffering unless that rider was purchased, health insurance, employer wage continuation programs, workers compensation, deductibles or coinsurance payments. Collision deductibles must be reasonable and are from $1,000 not to exceed $10,000 Continues $50,000 for personal injury protection (PIP) and reduces the time to claim benefits from 5 years to 3 years for medical benefits Continues $50,000 for PIP rehabilitation benefits and reduces the time to claim benefits from 10 years to 5 years. o For rehabilitation, a healing art procedure or treatment includes any system, treatment, operation, diagnosis, prescription, or practice for the prevention, ascertainment, cure, relief, palliation, adjustment, or correction of any human disease, ailment, deformity, injury, or unhealthy or abnormal physical or mental condition. The inclusion of non-medical and religious healing in the previous law is removed. o The cost of a procedure, treatment, or training shall be reasonable in relation to its probable rehabilitative effects. o Durable medical equipment is the property of the insured and is not returned unless it was rented. Durable medical equipment is specified as of a type commonly found at a health, exercise, or athletic facility. It shall not include hot tubs, mattresses, weight machines, or other devices that are not primarily designed to serve a medical purpose and that are not normally classified as durable medical equipment. o In a different section excluded medical and rehabilitative treatment is listed as: A hot tub, spa, or any similar product Aromatherapy
A fish tank, aquarium, or any similar product Yolked prism glasses Music therapy Dance therapy Treatment that is experimental in nature Treatment that is not primarily designed to serve a medical purpose or not commonly or customarily recognized by licensed health care professionals within the United States as medically necessary treatment of the bodily injury Thermography or other procedures of a similar nature, or Equipment that is not durable medical equipment or a durable medical device Includes coverage for closed-head injuries, temporomandibular joint disorder, craniomandibular disorder, vestibular auditory, or visual disorders, psychological disorders, and cognitive disorders. Creates pain and suffering insurance coverage Allows additional time for growth factors for injured persons under the age of 13 Occupational training shall be reasonable and appropriate for the particular case Requires an insurer to offer coverage for loss of gross income benefits and essential services o 100% of first $125, o 70% of next $125 60% of next $125 o Not to exceed $400 per week for loss of income not to exceed 52 weeks Allows for up to $25 per week for essential services not to exceed 52 weeks Requires an insurer to offer deductibles of $100, $500, and $1000. Requires a covered insured to pay coinsurance of 10% of the amount of an office visit, except for emergency care and treatment under basic PIP on all options. Also allows an insurer to offer policies with no coinsurance amount, or policies with coinsurance up to 20% of an office visit for an adjustment in premium. Excludes emergency care from all coinsurance and deductible arrangements. Requires insurer to provide to each applicant, before applicant chooses motor vehicle insurance, written information that includes the following: a) The comparative cost of insurance under the no-fault option, the managed care option, and the tort option; and b) The benefits, rights, and obligations of insurers and insured s under the different options. c) Creates a penalty for failure to provide such disclosures to an insured. Prohibits an insurer from giving bonuses, incentive pay, or additional compensation to a producer for selling a particular type of personal injury protection coverage. While maintaining the existing personal injury protection benefit coverage, creates a choice system in which a person may elect to sue or not to sue for economic and non-economic damages related to injuries that resulted from the use or operation of a motor vehicle
No-Fault Options: Defines "no-fault option" to include PIP without the ability of the person to sue for non-economic damages, but with the ability to sue for uncompensated economic damages. Unless driver is: a) Convicted for driving under the influence of alcohol or a controlled substance b) Is operating a motor vehicle that is registered in another state and is not in compliance c) Intends to injure him/herself or another person d) Is convicted of a felony during the accident, or e) Is operating an uninsured motor vehicle at the time accident occurred. If a person who is insured under a no-fault option is in an accident with a person who is insured under a tort option, they may not sue for noneconomic damages, but may sue for economic loss. Insurer must offer a no-fault option Low Income PIP Option: Creates a reduced personal injury protection policy option (reduced PIP) that would comply with mandatory coverage for medical, chiropractic, optometric, podiatric, hospital, nursing, X-ray, dental, surgical, ambulance, and prosthetic services; and that includes: o $40,000 for medical benefits; o $40,000 for rehabilitation benefits; o $25,000 for legal liability coverage for bodily injury; and o Optional coverages for loss of gross income and essential service o No occupational training is included o $5,000 death benefit o To qualify, must have income of 185% or less of federal poverty level. o Insurer may offer a managed care option o Loss of income reimbursement may not exceed 185% of federal poverty level, may be waived, and may be limited to $5,000 o Persons who have basic PIP option and are in an accident with a person in low income PIP option will receive basic PIP coverage amounts Managed Care Option: A) Requires disclosure by insurer of the following when this option is selected: a) Includes, but is not limited to HMO and PPO s b) What managed care is and how it affects the consumer c) What the approximate cost savings will be d) The benefits, rights, and obligations of insurers and managed care arrangement B) Creates a structured internal review process for managed care C) Prohibits an insurer offering managed care personal injury protection from dictating the duration of treatment or results of an internal review D) Bars an insurer offering managed care personal injury protection from retaliating against, punishing, or removing from performing internal reviews a health care provider because of the health care provider's prior determinations of care and treatment
E) Must use written internal review process before denying claims and decision must be in writing and signed by a licensed health care provider in the same specialty as would ordinarily treat the case. Reasons for denial must be in writing. F) Treatment must be approved or denied within 20 days after all necessary information is received. G) Insured s insurance card must carry clear, conspicuous, and understandable information about insured s enrollment in a managed care plan, whether it is a no-fault or tort option and the deductible and coinsurance amounts selected. Tort Option: Defines the "tort option" to PIP with the ability to sue for economic and non-economic damages pursuant to all other applicable law. o If an insured does not choose an option, they will be assumed to have chosen the tort option. o If a tort option driver is involved in an accident with a no-fault option driver, the tort option driver may sue for uncompensated economic damages from the no-fault option driver and seek non-economic loss reimbursement from the no-fault option driver's pain and suffering insurance coverage; o If a tort option driver is involved in an accident with another tort option driver, each driver may sue for economic and non-economic losses Review: o Requires that a PIP examination practitioner have at least 3 years of experience and receive no more than 10% of his or her compensation from witness fees or examinations of persons not under the practitioner's care. o Standard for a PIP examination for the termination of future treatment is the attainment of maximum medical improvement (MMI) except that future care and treatment shall be provided despite MMI if such care and treatment are medically reasonable and necessary to not jeopardize an injured person s ability to retain the level of function associated with MMI. o Requires an insurer to create a process for expedited review of a denial of benefits and to disclose such process to an insured. o Allows the PIP examination program administrator to contract with health care providers for participation in the PIP examination panel. o Requires the PIP program administrator to terminate a PIP health care provider's contract for treatment that requires over- or under-utilization of treatment, inappropriate examination of an injured person in the PIP examination program, or charging an unreasonable fee for a PIP examination o Allows a member of the PIP examination panel to report to the commissioner suspected insurance fraud by a health care provider Excludes from claims, accidents which were staged with the purpose of collecting insurance payments
Makes it illegal to drive without insurance coverage and an uninsured motorist may not sue an insured motorist in the event of a motor vehicle accident. Institutes a fee schedule for the reimbursement of personal injury protection benefits to health care providers that requires the insurance commissioner to adopt the fee schedule on relative value, conversion factors, and procedural terminology, including the current dental terminology codes and national drug codes fee schedule to equal an amount between 110% and 132% of the amount of the workers' compensation fee schedule o Specifies that the fee schedule does not include workers' compensation treatment guidelines, procedures, rules, restrictions, protocols, prior approval or preauthorization for treatment, limitations, billing restrictions or forms, or discrimination among providers performing service Requires that an insurer not discriminate against types of providers who perform services for personal injury protection benefits within the provider s scope of practice Allows an insurer to refuse to pay a health care provider who engages in a practice of submitting fraudulent personal injury protection benefit claims and a fine of 3 times the fraudulent claim. The fine is paid to Insurance Commissioner and goes into the General Fund. Benefits are overdue if not paid within 30 days unless claims are accumulated. In that case, they are overdue if not paid within 15 days after accumulated. Prohibits an insurer from retroactively adjusting payment of a personal injury protection claim after 12 months from the date the claim is paid. Records relating to claims must be kept for 5 years Prohibits an insured driver from suing for damages when the uninsured driver is at fault. Clarifies when a pedestrian's insurance coverage is primary for the purposes of payment of benefits for injuries arising out of the use of a motor vehicle. Becomes effective January 1, 2004 Extends the repeal of no-fault insurance until July 1, 2006 Requires the department of regulatory agencies to perform a review of the functions of no-fault auto insurance prior to the repeal in 2006.