Legislature takes aim at businesses once more

The clay pigeon shoot of Colorado business taking place under the Capitol dome continues unabated this week as state lawmakers zero in on what surely must be important legislation to pull Colorado out of this deep economic downturn.

In that vein, let’s look at House Bill 1012, which takes on the economically desperate topic of limiting video surveillance of workers’ compensation seekers who the insurance company thinks may be faking injuries.

Most people are not surprised insurance companies engage in this behavior, having seen numerous videos of workers who claim to be bed-ridden, loading up their jet skis or landscaping their yards. Our attorney general has said he thinks such surveillance stops people from engaging in fraud, and video evidence is extremely persuasive in court when prosecuting offenders for attempting to defraud the workers’ compensation system.

According to an interview with Channel 9 News in Denver, Attorney General John Suthers only has one prosecutor to handle all workers’ compensation cases and he has said that in approximately 2/3 of the cases where he obtained convictions, video surveillance has been the key or deciding factor.

Right now, nothing stops the insurance companies from observing people from public places or following them to recreational areas to determine whether or not their behavior is consistent with the injuries they are claiming.

Normally, anyone can watch anyone do something in public and video it, as the person has decided to perform an action somewhere he or she doesn’t have a reasonable expectation of privacy. If someone’s behavior becomes intrusive, there are laws involving harassment and stalking that can come into play.

There were witnesses who came forward to testify on HB 1012 to say they were harassed or their lives intruded upon by private investigators and insurance company agents, and there certainly are individual cases of abuse.

However, Pinnacol Assurance, which handles the majority of state workers’ compensation claims in Colorado, said that, of the 54,751 claims it had in 2008, only 2,600 of the claimants were put under surveillance.

Pinnacol is undoubtedly the big boy in the room when it comes to workers’ compensation coverage for the state of Colorado. It is a quasi-governmental entity, presently in negotiations with the state of Colorado to buy itself out from under state control.

It is something of a voyage of coincidence when you consider that late last year, during the Legislature’s last desperate grasping at money, lawmakers discovered that Pinnacol had large cash reserves in excess of $550 million. After this discovery, an interim committee was created by the Legislature to study the insurer’s business.

In January, this piece of legislation was introduced and in February, the insurance company made an offer of $200 million to the state of Colorado to allow it to function as a private entity and disentangle itself from the state. That wasn’t good enough, so on March 18, the president of Pinnacol made a new offer to the governor of $350 million, with $115 million to be paid in 2010, $115 million paid in 2011 and the rest paid over the following years.

There is no doubt that this proposed legislation is something of a butterfly kiss to workers’ compensation attorneys, but at least they’re constituents and have as much right to ask their Legislature to do something as anyone else.

Some people, however, may perceive this as a negotiating tool in the state’s ongoing back-and-forth with Pinnacol over the value of its proposed buyout.

In either case, the consumer will see higher costs, as businesses pay higher premiums if fraud is not allowed to be effectively weeded out of the workers’ comp system.

Rick Wagner offers more thoughts on politics at his blog, The War on Wrong, which can be reached through the blogs entry at GJSentinel.com.


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