Colorado considers limits for mental-distress claims

A proposal to limit compensation for mental distress under workers’ comp laws is expected to be reintroduced in the Colorado Legislature this session, and proponents are hopeful it will succeed this year.

The measure is one of several that, if passed, could affect Colorado employers.

“We have attempted to pass it for the last two years, but it died for lack of one vote in the Senate,´ said Sandra Potter, issues manager for the Northern Colorado Legislative Alliance, which represents chambers of commerce in Fort Collins, Loveland and Greeley.

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However, the state Senate makeup has changed this session, “so we believe we could pass it. We are much more hopeful this year,” Potter said.

“Under the current law, there’s no limitation on the amount of a claim or the length of time it can cover for an accident on the job,” she said.

A 1991 bill that substantially changed the workers’ comp statutes didn’t include this piece of legislation.

Mental distress on the job can refer to any type of emotional trauma. Even normal job stress has qualified as mental distress under the law, she said.

“It’s so vague and broad that it has bankrupted the system in California,” Potter said.

Patrick Boyle, executive vice president of the Colorado Association of Commerce and Industry, the state’s largest business association, said the measure that would reinstate emotional stress limits will be a hotly debated issue.

The proposal also would limit the amount of paid time off for an employee, he said.

“It’s a very controversial bill,” Boyle said.

Deborah Howard, spokeswoman for the Colorado Department of Labor’s Division of Workers’ Compensation, said her office has no plans to introduce any new measures this year. The division is charged with administering the workers’ comp program and setting fee schedules.

Howard said there were 20 workers’ comp bills introduced in the last session of the Legislature.

Another measure that would more clearly define the type of method — schedule versus formula — to determine workers’ comp benefits also is expected to come up before the state Legislature this year, Potter said.

“Some (compensation for) injuries are based on schedules. If you hurt your arm, you get so much money per month,” she said.

Compensation for other injuries is determined through a formula method, she said. And some types of injuries can be determined with either method.

Potter said the formula method generally results in a higher payment to the beneficiary.

Her group also is working with others to try to move workers’ comp litigation from the administrative-law courts to the government’s judicial branch. Administrative-law judges tend to rule more in favor of workers, she said.

“We will support the effort to move it to the judicial branch,” she said.

In the area of medical insurance, Potter said she anticipates more measures regarding “willing providers” for managed care. Typically, these pieces of legislation are proposed by pharmacists who want to contract as vendors with managed-care organizations.

“We oppose that, because managed care is designed to keep costs down,” Potter said. Small groups of pharmacists contracting with managed care could result in an increase in drug-prescription prices for members of the managed-care program, she said.

“It impedes cost-savings components. We’ve opposed it in the past,” she said.

Potter said her group also will support legislation to move Medicaid patients over to managed care organizations.

“Now someone under Medicaid can go to any doctor they want. They have more choice than employees who are covered under managed care,” she said.

Medicaid is the state and federally funded health-care program for low-income individuals and families.

A state analysis recently reported that a proposed bill to shift Medicaid recipients into managed-care plans could save the state up to $22.3 million a year.

The proposed bill would shift three-fourths of Colorado’s 280,000 Medicaid recipients from traditional fee-for-service coverage into managed-care plans over a three-year period.

The state and federal government share Medicaid costs about evenly. Last year, Medicaid spending in Colorado totaled $1.3 billion.