Date: 10/16/2009
Final
Public Testimony
INTERIM COMMITTEE TO STUDY ISSUES RELATED TO PINNACOL ASSURANCE
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10:07 AM -- Public Testimony
10:08 AM -- Willard Gatzke, representing himself, commented on the interim committee's previous meetings. He talked about the bills that address reversionary interest and privacy. Mr. Gatzke said the committee is a step in the right direction. Senator Mitchell asked Mr. Gatzke to talk about his injury and his issue with Pinnacol Assurance. Mr. Gatzke talked about the Independent Medical Examination. Senator Mitchell commented on Mr. Gatzke's comments. Representative Gerou asked whether Mr. Gatzke filed a complaint. Mr. Gatzke said he did file a complaint against the physician and he was given a response that there was no illegal actions found. Mr. Gatzke talked about the fact that IMEs cannot be sued under Colorado law. Dr. Parry talked about the Medical Practice Act. Mr. Gatzke submitted his written testimony (Attachment O).
10:35 AM -- Neil O'Toole, representing the Workers' Compensation Education Association, commented on Bills 3 and 13. He talked about a reference to possible legislative determination regarding risk based capital in Bill 3, page 3, line 22. He stated that this is a term of art for the commissioner of insurance that should be defined. Mr. O'Toole talked about Bill 3, page 4, where it limits the insurance commissioner's discretion. He suggested that on Bill 13, page 3, line 18, include "shall be denied or approved" instead of just denied. Mr. O'Toole also addressed reversionary interests on page 4. Mr. O'Toole explained that social security has a Medicare set aside trust for workers' comp claimants because Medicare does not pay for it. This statute could address set asides. Mr. Ross clarified that in Bill 3, the risk based capital formula should not be included in statute. Senator Mitchell asked about the Medicare set asides.
10:48 AM -- James Elson, representing himself, testified about his experience as a nurse at the Colorado Mental Health Institute at Pueblo with difficult, maximum security patients. He stated that he was assaulted routinely and had 17 surgeries. Mr. Elson said he shared his experiences with Pinnacol Assurance when filing claims. Mr. Elson said he also suffered from post traumatic stress disorder (PTSD), depression, and anxiety from threats from patients and their families. He noticed that he and his family were under surveillance which increased his PTSD. Mr. Elson said that there needs to be probable cause for surveillance. He also would like settlements looked at for people who were manipulated into settling and allowing claimants to be given a chance to renegotiate.
11:05 AM -- Leonard Delgado from Pueblo, representing himself, spoke about working at the Colorado Mental Health Institute at Pueblo. Mr. Delgado said that the Medicare set aside came out of his settlement after he was told it would not. He read from a letter from a Pinnacol Assurance attorney stating that they would try to settle below the projected claim amount. Mr. Delgado also presented denial information. He said he found the Pinnacol Assurance doctor to be biased. Mr. Delgado said that he received a settlement of $95,000 but it went to Medicare. He also explained that if he does not use the money, it would return to Pinnacol Assurance. Mr. Delgado believes that PERACare should have received settlement rather than Medicare.
11:15 AM -- A panel of the following witnesses came to the table to testify together:
- John Berry, representing the Workers' Compensation Coalition;
- Tony Gagliardi, representing the National Federation of Independent Businesses;
- Tamra Ward, representing the Denver Metro Chamber of Commerce;
- Virginia Morrison Love, representing the Colorado Competitive Council (C3);
- Dennis Jakubowski, representing the Assoicated General Contractors (ACG) of Colorado; and
- Loren Furman, representing the Colorado Association of Commerce and Industry and Colorado Concern.
John Berry, representing the Workers' Compensation Coalition, noted that the bills have not been reviewed by boards yet. He made the following comments on the bills:
- Bill 3 - they oppose because of a concern about the dividend trigger based on the RBC percentage. He is not sure the trigger will work and recommends trusting the board for these types of decisions.
- Bill 4 - he said they do not condone abuses of surveillance, but believe it has uses.
- Bill 9 - he commented on the Senate confirmation requirement for the Pinnacol Assurance CEO.
- Bill 8 - he said he recalls that mandatory vocational rehabilitation was removed at the request of both employees and employers. He said it was a trade off with higher benefits and recommended leaving it optional.
- Bill 13 - he said they are concerned about reversionary interest.
- Bill 12 - he explained that they are concerned about reducing the standard for denying claims from knowingly to willingly and increasing the penalty.
Virginia Morrison Love, representing C3, made the following comments on the bills:
- Bill 1 - she believes it is already being done and is concerned about the costs involved. She showed the committee the current letter Pinnacol Assurance sends claimants and said there is also information available from the division and said its quite thorough.
- Bill 2 and 11 - she said she is concerned about changing the per diem so drastically.
- Bill 14 - she believes Pinnacol Assurance and the division are providing information well.
Tony Gagliardi, representing the National Federation of Independent Business, said that he is concerned with the upward pressure on costs of employment. He explained that NFIB members want injured employees to return to work and that businesses can only control costs by not hiring or laying off employees. Mr. Gagliardi encouraged the committee to consider the bottom line costs to employers so no additional harm is done to the job market. He also commented on surveillance.
Loren Furman, representing the Colorado Association of Commerce and Industry and Colorado Concern, referred to Senate Bill 09- 281 and said that bill's intent was not to address the entire workers' compensation system. She talked about an amendment that was added during the conference committee last session that limited the scope to Pinnacol Assurance. Representative Pace asked the panel about Bill 3 that should lower premiums. Ms. Love responded that the insurance commissioner has plenty of discretion and that Pinnacol Assurance needs to maintain an adequate reserve. Mr. Berry does not think it changes current law much because it still gives the insurance commissioner discretion if rationale is provided. Senator Carroll clarified that when there is a doubt, the insurance commissioner should choose the lower. Dr. Parry asked about Bill 14 and asked why the panel would not want more information provided to claimants. Ms. Morrison Love said she doesn't object, but wants to know what more needs to be done. Dr. Parry does not think people know about their rights. Ms. Morrison Love provided a copy of a letter from Pinnacol Assurance that claimants receive along with a printout of the division's website and its resources (Attachments P and Q respectfully). Mr. Ross clarified that the RBC formula is used nationally and is used to determine if a company should be put on an action list. Mr. Ross explained that the company determines policyholder surplus and that Pinnacol Assurance's surplus levels are where they are supposed to be. He added that the insurance commissioner does not always choose the lowest loss cost, sometimes she has gone lower and already must justify his or her decision.
11:48 AM -- Mark Perschbacher testified on his own behalf. He said he just received an IME letter. Mr. Perschbacher talked about how his eyes were severely injured while working for CDOT in an explosion. He was told Pinnacol Assurance would not pay because he was not wearing safety glasses. Mr. Perschbacher said he has been accused of faking his injury. He talked about a newspaper article regarding a raft race that Pinnacol Assurance accused him of racing in that he claims he was not involved with. Mr. Perschbacher recommends training on equipment. He continued explaining his experience with Pinnacol Assurance and stated that he was ultimately fired by CDOT.
12:06 PM -- Lunch Break until 1:30 PM