{Originally published September 11, 2016}
Phil Kalin Pinnacol Assurance president and CEO has been going around Colorado writing self-serving letters and articles denouncing Amendment 69 the ColoradoCare health care reform amendment on this November's ballot. I'm responding to the letter he had published in the September 8th issue of the Durango Telegraph and titled "Amendment 69 and workers comp." I have made the effort to incline footnotes with links to further information for your convenience.
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Having direct experience with Pinnacol Assurance practices I found their CEO Phil Kalin’s self-serving Amendment 69 bashing letter to the Durango Telegraph (Sept. 8) rather fascinating and I’d like to respond to him.
In his first sentence Phil Kalin voices his opinion: “Is there any question about the damage Amendment 69 would do (to Colorado’s Worker’s Comp program)?” He simply presents this query as a self-evident truth and moved on. But what is it that would be damaged? Worker’s Comp or Pinnacol Assurance’s cozy and profitable arrangement?
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Irene Aguilar, M.D. Colorado State Senator and Primary Care Physician
Yes on Amendment 69: ColoradoCare makes sense economically
Knopf: Slaying myths around ColoradoCare and single-payer health care (column)
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Mind you, this is the same Pinnacol Assurance that was taken to task by Colorado legislators for having an excessive profits driven culture of refusing claims. Then reprimanded for spending hundreds of thousands of dollars on an executive golf vacation to Pebble Beach, giving 4.3 million in golden parachutes to 12 outgoing executives and other excessive bonuses.
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See footnotes ¶3
Pinnacol Assurance | Performance Audit May 2010
Colo. lawmakers question bonuses paid by insurer
Audit: Pinnacol shows abuses
More Scandal Ahead for Pinnacol?
Pinnacol retaliated to this hand slapping by dropping their administration duties for Colorado state employee’s insurance, affecting 42,000 employees.
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See footnotes ¶4
Pinnacol Stops Administering Colorado State Claims
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Pinnacol is so profitable that this past March for the ninth time in eleven years they paid out dividends to employers, now adding up to over half a billion dollars. That’s a lot of avoided health care costs for a company tasked with helping injured workers. Lawmakers found they gave bonuses based on net income targets and “customer satisfaction.” Customers being businesses, not injured workers.
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See footnotes ¶5
Pinnacol issues $30 million in dividend checks to Colorado employers
Audit hits Pinnacol for bonuses, travel expenses
Colorado’s Pinnacol Assurance CEO Stripped of 2010 Bonus
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Doing business this way turns out to be so lucrative that Pinnacol recently squandered around 3.5 million dollars on trying to put together an ultimately abandoned privatization scheme and attempts to expand into other states. The obvious implication being that they are more interested in expanding business and profits, than in taking care of their assigned job.
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See footnotes ¶6
Analysis: Not privatizing Pinnacol Assurance also could be costly
Colorado’s Pinnacol Assurance has spent millions in privatization push, but has little to show for it
Colorado’s largest worker comp provider eyes expansion
Insurer holds off on expansion efforts amid pushback
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Mr Kalin, how does Pinnacol manage to avoid so many costs?
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See footnotes ¶7
Jury Finds Pinnacol Benefits Denial “Unacceptable"
Adding Insult to Injury
Bonuses for Denying Claims
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Let me share my eye-opening experience with one of your Senior Claims Representatives who investigated my claim and me as thoroughly as possible. She even commended me for my open forthright sharing. Later it dawned on me that her focus was not on assessing my injury and what happened.
Nope, her focus was on finding anything, no matter how tenuous (even removed from the incident) that might indicate grounds for a “denial of claim.” I found out that any vaguely plausible justification for denial is embraced, cultivated and tenaciously clung to.
Despite clear and undisputed evidence that her base assumption is not only factually false but chronologically impossible - she remains unmoved with the facts because in her head she can imagine another scenario and her self-certain faith trumps all real world facts.
Furthermore, she understands she’s part of a corporate culture and knows that the might and lawyers of a two billion dollar outfit have her back. All I have is my integrity, keyboard and stubbornness.
Mr. Kalin, you should know that my ongoing interactions with your Senior Claims Representative has been strikingly similar to dialoguing with contrarian types. Truth matters not one wit, their self-certainty, mockery and refusal to listen to or acknowledge facts carries the day every time. Mr. Kalin, I’d be happy to provide the particulars, should you care, I imagine you know how to reach me.
What I know, is that it is time for public servants with public oversight to wrestle health insurance and health care away from self-serving profits obsessed boards of directors.
Sure there will be growing pains with ColoradoCare, every sector will need to get engaged in making it work. It won’t be easy, particularly considering Republican obstructionism, hostility and dirty tricks.
But, insurance companies fleecing us is worse. The time has arrived for some real health care reform - vote YES on 69!
Sincerely,
Peter Miesler
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Footnotes ¶3
Pinnacol Assurance | Performance Audit May 2010
LEGISLATIVE AUDIT COMMITTEE 2010 MEMBERS
OFFICE OF THE STATE AUDITOR
also see
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Colo. lawmakers question bonuses paid by insurer
By: Steven K Paulson | September 3, 2009
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.
On Monday, a dozen workers injured on the job told lawmakers they were spied upon and their claims were unfairly denied.
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Audit: Pinnacol shows abuses
June 11, 2010
also see
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Is More Scandal Ahead for Pinnacol?
By Michael De Yoanna | January 18, 2011
If you thought Pinnacol Assurance executives would surely resign after they were caught spending hundreds of thousands of dollars in sorely needed state funds on an exclusive trip to a swanky California golf resort, think again. After all, who'd want to leave behind perks like that?
Indeed, an internal e-mail shows the execs of the agency, which provides workers' comp for the state, remain entrenched and defiant.
CEO Ken Ross and three board members—Gary Johnson, Ryan Hettich, and Debra Lovejoy, who also partook in spending a total of $318,000 in golf, dinners, alcohol, spa treatments, and more at Pebble Beach—refuse to step down despite calls for their resignation, according to 7News.
"This kind of behavior is incredibly outrageous," says Jim O'Toole, a professor of business ethics at the University of Denver. …
Indeed, an internal e-mail shows the execs of the agency, which provides workers' comp for the state, remain entrenched and defiant.
CEO Ken Ross and three board members—Gary Johnson, Ryan Hettich, and Debra Lovejoy, who also partook in spending a total of $318,000 in golf, dinners, alcohol, spa treatments, and more at Pebble Beach—refuse to step down despite calls for their resignation, according to 7News.
"This kind of behavior is incredibly outrageous," says Jim O'Toole, a professor of business ethics at the University of Denver. …
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Footnotes ¶4
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Pinnacol Stops Administering Colorado State Claims
By Steven K. Paulson | August 8, 2011
A Colorado-chartered workers’ compensation insurer will no longer administer the claims of state employees following disagreements with state officials over lavish trips, compensation and golden parachutes for key executives.
Pinnacol Assurance’s decision to bail forced Colorado to scramble to hire an independent contractor to administer claims for state workers. State Rep. Sal Pace, D-Pueblo, said about 42,000 employees were affected, including about 1,000 who have claims pending.
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footnotes ¶5
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Pinnacol issues $30 million in dividend checks to Colorado employers
By The Denver Post | March 24, 2016
Colorado’s largest workers’ compensation insurer will pay $30 million in dividends to about 93 percent of its policyholders, or about 53,000 companies.
This is the ninth time since 2005 that Pinnacol Assurance has been able to issue dividends. The last time was in 2012, when it distributed $37.5 million. Including the 2016 payout, Pinnacol has returned $506 million in dividends to employers.
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Audit hits Pinnacol for bonuses, travel expenses
By Tim Hoover
June 7, 2010
The executives of Pinnacol Assurance, Colorado’s state-chartered worker’s compensation insurance fund, are paid better than their peers and Pinnacol does not have enough controls over travel and gifts, according to a state audit released today.
Auditors found that Pinnacol’s board of directors regularly set bonus targets below prior years’ actual results between 2002 and 2008, allowing Pinnacol executives to receive maximum bonuses nearly every year during the period in question.
The bonus plan allows executives to receive a bonus that ranges up to 52.5 percent of the annual salary for the chief executive officer.
And in a blistering conclusion, the audit concluded that “the fact that 75 percent of the sample we tested contained violations of the travel and entertainment expense policies borders on abuse under government auditing standards.”
Pinnacol officials at the hearing, which included CEO Ken Ross, said they concurred with auditors’ findings that the insurance fund needed better policies on its bonuses and travel. …
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Colorado’s Pinnacol Assurance CEO Stripped of 2010 Bonus
March 4, 2011
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footnotes ¶6
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Analysis: Not privatizing Pinnacol Assurance also could be costly
By Tim Hoover | Jan 10, 2012
A number of business groups have eyed the proposal skeptically, saying the present system works well and keeps workers’ compensation premiums low while it would be unclear what privatization would do in the long term.
But a memo given to the Pinnacol Stakeholders’ Task Force from the panel’s chairman, John Huggins, argues that maintaining the status quo has many risks. The analyses in the memo were compiled by a team of legal and financial advisors working for Hickenlooper. …
Huggins also told task force members that Pinnacol’s existing board is considering whether there should be limits on executive compensation even after privatization. Pinnacol executives last year agreed to forgo hefty severance payouts that critics had labeled “golden parachutes,” but the Pinnacol board is being asked to look at excessive compensation even if Pinnacol were a private company.
A Kansas law dealing with demutualization, for example, prohibits “unjust enrichment” by insurance executives. …
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Colorado’s Pinnacol Assurance has spent millions in privatization push but has little to show for it
By Tim Hoover | March 30, 2012
The Denver Post obtained a copy of the records received under the request, which showed that since January, the firm of Brownstein Farber Hyatt Schreck, for example, had been paid $781,458 for lobbying and had a contract that says the firm will be paid $375,000 if Pinnacol fires it.
Meanwhile, Pinnacol spent $544,314 on public relations and advertising for the privatization push since January.
The Denver Business Journal obtained records of additional expenses since September that showed they included $120,383 paid to John Huggins, chairman of the Pinnacol Stakeholders Task Force, who, although he was representing Gov. John Hickenlooper’s office, was paid by Pinnacol, along with $1.2 million in costs for two financial firms and two law firms, to review the proposal on the state’s behalf.
Many business owners have complained of overly aggressive tactics by Pinnacol in pushing privatization, such as when the company held teleconferences with policyholders who were given the options of pushing a button if they liked the proposal or pushing a button for more information.
“They have policyholders’ names and addresses. They could have gone the route of communicating directly,” Davia said. “That $3.5 million was a tremendous amount of money to kind of kick the tires on a proposal.”
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Colorado’s largest worker comp provider eyes expansion
By Aldo Svaldi | June 1, 2015
Pinnacol Assurance, the state’s largest provider of workers’ compensation coverage, is looking at providing coverage in other states and creating a separate business focused on employee wellness.
“We believe it could make sense for us to pursue other lines of business and expand beyond Colorado — things that are natural extensions of what we do now,” Pinnacol’s president and CEO Philip Kalin told the Colorado Legislative Audit Committee on Monday. …
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Insurer holds off on expansion efforts amid pushback
By Stephanie Goldberg | 3/31/2016
In the midst of pushback from industry groups and competitors, Colorado's state-chartered workers compensation insurer has decided against introducing a bill that would allow the company to provide coverage in other states.
Denver-based Pinnacol Assurance, which was established a century ago as the workers comp insurer of last resort for Colorado, proposed legislative language late last year that would have enabled the company to form a for-profit subsidiary to sell workers comp policies in other states. The company clearly stated it was not seeking to privatize, which is something it tried and failed to do in 2012.
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footnotes ¶7
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Jury Finds Pinnacol Benefits Denial "Unacceptable"
Pinnacol E-mails Celebrated Denial Of Denver Man's Workers Compensation Claim | Nov 15, 2010
The states largest workers compensation insurance company denied a Denver mans claim, celebrating the denial in e-mails, a CALL7 Investigation found.
Workers comp provider Pinnacol Assurance lost a lawsuit by Michael Schuessler claiming the company improperly denied his claim.
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Adding Insult to Injury
By Stuart Steers | October 16, 2003
Many people would say that Pinnacol Assurance is a Colorado success story. Benson Von Feldt would disagree. He has spent the last three years fighting Pinnacol, his employer's workers' compensation carrier. …
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Bonuses for Denying Claims
Linda Chalat | Sep 2009
Pinnacol Assurance, the insurance company responsible for Colorado workers’ compensation claims, paid bonuses to claims adjusters and doctors based on performance standards that included net income targets.
State Sen. Morgan Carroll, D-Aurora has accused the insurance company of rating employees on how quickly they disposed of claims, giving claims adjusters an incentive to dismiss them.
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. …
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I appreciate a lot of the articles I refer to going back 3 to 6 years, so some may wish to dismiss them as old news. Still it’s worth considering in my internet researching I saw examples of Pinnacol defending their practices and no indication that any wrongdoing has ever been recognized. Nor is there any indication that substantive internal reforms took place as a result of the above listed revelations. If I am mistaken please do share.
Therefore these articles are not old news, they are a reflection of an established mindset.
Then look at Kalin’s letter, there is no indication that he has any appreciation whatsoever for, nor any interest in, the reasons why so many are supporting the ColoradoCare Amendment 69. All he seems concerned with is how it will impact his self-interest.
There are no solutions to Colorado’s growing health care problems coming from such a profits obsessed mindset.
Even with the inevitable challenges that come with pioneering efforts, ColoradoCare is an effort worth committing to.
Here are some more reason to Vote Yes On ColoradoCare Amendment 69:
By Special to the Denver Post | August 27, 2009
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By Arthur Kane / October 21, 2015
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Irene Aguilar, M.D. Colorado State Senator and Primary Care Physician
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Marianne Goodland | May 03, 2016
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Lee Fang | Apr. 22 2016
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Opposition Group 99% Bankrolled by Big Money from Corporations, Insurance Industry.
ColoradoCare.org | May 4, 2016
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