Corn Amendment Prohibits Bonuses to Insurance Employees who Deny Claims

Sen. Kenneth Corn this week successfully amended House Bill 1055 to include a provision that would prohibit insurance companies from awarding bonuses to employees who deny claims.

Corn said the practice of incentive-based claims denial is unethical.

“Insurance companies shouldn’t be in the business of lining the pockets of those who deny medical services to their customers,” said Corn, D-Poteau. “It’s an unethical practice that needs to come to an end in Oklahoma. This should bring consumers closer to the level of medical care they are paying for.”

Corn noted that awarding monetary incentives for claims denials provides employees with the incentive to go beyond the normal review process to justify the denial of a claim. In recent years, a number of states have successfully implemented similar legislation regarding incentive-based claims denial.

Corn unsuccessfully offered a second amendment that would have required insurance companies to provide justification for rate increases. Corn said that the burden of proof that rates are fair should rest upon insurance providers.

“Insurance providers shouldn’t be able to sharply increase rates without first proposing adequate justification,” Corn said. “Under current law, insurance providers are not required to give the Insurance Commissioner time to object to major rate increases. This would provide important protection for Oklahoma consumers.”

House Bill 1055 was approved this week by the Senate Committee on Retirement and Insurance. It now advances to the full Senate for consideration.