A bill that would have chilled the use of surveillance in Colorado workers' compensation fraud investigations quietly died in Colorado's state Senate committee during the 2010 General Assembly.
"The bill would have imposed needless legal burdens and hurdles on insurers and employers in conducting needed investigations of fraud suspects. This is a victory against workers' compensation fraud. Preserving the ability to fully investigate suspected schemes will benefit consumers and businesses throughout Colorado," said Howard Goldblatt, director of government affairs at the Coalition Against Insurance Fraud.
The most-restrictive provision of HB 1012 that lawmakers debated would have required insurers to establish a "reasonable basis" before they could use surveillance on fraud suspects. Insurers also would have had to destroy case materials after five years unless the material related to an ongoing investigation.
The bill's demise capped weeks of fierce debate that even moved the Denver Post to oppose the bill.
"Having to continually determine a reasonable basis before every investigation would have erected burdensome legal barriers that could have impeded an insurer's ability to conduct timely and effective investigations," Goldblatt said.
Surveillance also is a valuable tool for normal risk management such as determining an injured worker's readiness to return to work. The bill would have limited an essential cost-saving function designed to assist both the insurer and worker, Goldblatt said.
Requiring destruction of case materials also could have impeded later investigations that, an insurer might later discover, relates to the earlier case, Goldblatt added.
The bill also would have required investigators to disclose to suspects that surveillance was underway, if questioned, thus setting up possible hostile confrontations.
HB 1012 passed the state House before dying by a 4-3 vote in the Senate Judiciary Committee.
Passage could have set a precedent that other states might follow.
"Businesses and consumers of Colorado are the ultimate beneficiaries of this bill's demise. Saving costs by uncovering fraud is something everyone can live with," Goldblatt said.
Dennis Jay is executive director of the Coalition Against Insurance Fraud. www.insurancefraud.org.
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