Disability Law

The Colorado Springs Gazette reports on what may be insurance company misconduct regarding denial of workers? compensation claims in that state. Here are excerpts from the article:

A workers compensation insurer may have paid bonuses to employees for denying claims, a lawmaker said Thursday, citing documents provided by the company.

State Sen. Morgan Carroll, D-Aurora, said that documents indicate Pinnacol Assurance paid bonuses to claims adjusters and doctors based on performance standards that included net income targets. She said the documents also indicate claims adjusters were assigned to teams that competed against each other for bonuses.

Carroll said employees were rated on how fast they disposed of claims, giving claims adjusters an incentive to dismiss them.

"The fastest way to close a case is to deny it in the first place," Carroll said.

Carroll said claims adjusters were also rated based on "customer satisfaction," which Pinnacol told her were the businesses that paid for the insurance, not the injured workers who needed medical attention, giving Pinnacol an incentive to hold down costs.

Pinnacol spokeswoman Suzi Stolte said the company wouldn't comment until after it has a chance to explain the documents Friday to a legislative committee that Carroll chairs.

The committee was formed after lawmakers considered but ultimately rejected taking the company's $684 million surplus to help balance the state's budget. Pinnacol says its surplus is now $580 million because it again refunded more money to its policyholders this year.

Lawmakers said the surplus came at the expense of injured workers who had their claims denied.

The committee is looking at whether the company should have more state oversight or whether it should be sold off. But since Pinnacol is a hybrid of public and private, it's unclear whether lawmakers have the right to sell it.