These companies promise savings (reduction of benefits to the injured person), and rake in hundreds of millions of dollars. They spend lavishly to get new business, and the injured person just suffers. Disgusting.
‘All of This Because Somebody Got Hurt at Work’
Hummer limos, go-go dancers, a live alligator and glowing aliens in spandex at the national workers’ comp and disability expo. Journey into the little-known workers’ comp industrial complex.
The party at Light, a Cirque du Soleil-themed club at the Mandalay Bay Resort and Casino, capped off the workers’ comp industry’s biggest annual networking event. For three days in November, hundreds of vendors wooed insurers and employers with lavish after-hours parties, giveaways of designer handbags, photos with Olympic gymnast Kerri Strug, and free rides in orange Hummer limousines.
A top manager for a major insurance company recalled standing amid the hoopla a few years back when a company CEO turned to her and marveled: “All of this because somebody got hurt at work.”
Workers’ comp is supposed to be simple. If you’re injured on the job, your employer pays your medical bills and part of your wages while you recover.
But over the past two decades, a cottage industry of middlemen has emerged, which some have dubbed the “workers’ comp industrial complex.” Even private equity firms have bought in, seeing profit opportunities in employers’ and insurers’ quest to contain spending.
The middlemen offer an array of services, from managing claims to negotiating medical bills, all promising to reduce costs — although critics say some actually raise them, as well as the burden on those hurt on the job.
It’s a world largely unknown to the injured workers that the firms ultimately serve, and often to the employers who spent an estimated $89 billion on workers’ comp in 2013.
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By Michael Grabell
ProPublica, Dec. 29, 2015, 8 a.m.