Colo. lawmakers question bonuses paid by insurer

DENVER — 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.

Pinnacol CEO Ken Ross told lawmakers last month that employees receive bonuses based on how well they manage claims based on a number of factors, but they have no financial incentive to deny claims.

He also told legislators he didn't know how many of the approximately 55,000 claims filed with Pinnacol each year are denied, but he promised to get the information to the committee.

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.

On Monday, a dozen workers injured on the job told lawmakers they were spied upon and their claims were unfairly denied. Witnesses included a former Durango firefighter who was injured in training told legislators he was forced to sell his home after Pinnacol denied him the surgery he needed to fix his back, and a former union worker who said nurses were sent with him on doctor visits to spy on him.

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.