ProPublica Profiles the "Workers' Comp Industrial Complex"
A startling piece from ProPublica shines a light on the little-known industry of workers' comp "cost containment" companies. This booming "workers' comp industrial complex" (as some have called it) promises reduced costs for employers and insurers—often at the cost of injured worker benefits.
What is "cost containment?"
Medical cost containment can be defined as acts of diligence by a third party company in an effort to reduce medical care costs by reducing, shortening, or terminating workers' comp benefits. These companies facilitate this a number of different ways: medical bill reviews, data processing, headhunting, drug screening, and even claimant surveillance. One medical review firm employs doctors who are expected to provide second opinions on workers' comp cases—via paperwork only—at a rate of four to five an hour.
"Cost containment is not a dirty phrase," said Robert Hartwig, president of Insurance Information Institute. "If insurers were to eliminate cost containment because it was costing too much, I can assure you we would see a rapid escalation in fraud and abuse in the system. And we would quickly see an explosion in claims costs."
There is also the industry assertion that cost containment is good for injured workers', as well. One Call Care Management of Jacksonville Florida released a statement that said its services "make sure that injured workers receive the best care possible, quickly and efficiently."
"A Layer of Cold Bureaucracy"
However, not all believe that cost containment is actually helping injured workers. For most experts, this industry has added "a layer of cold bureaucracy to an already complicated system." Most alarmingly, it leaves many critical medical decisions in the hands of third-party administrators and adjusters. The number of workers' left with insufficient workers' compensation benefits because of these companies is growing.
"I don't think we have created the savings intended and I think we've made the system a much more complex, difficult to navigate system," says Bob Wilson of WorkersCompensation.com. "No wonder injured workers are getting lost in the system."
Acrobats, Alligators, and Aliens
Despite misgivings about the effects of workers' compensation cost containment, the industry is booming. In California, insurers spent $471 million on medical cost containment services-- more than double the amount spent a decade earlier.
The result is a lavish industry trade show circuit. The National Workers' Compensation and Disability Conference & Expo last year in Las Vegas featured Cirque du Soleil acrobats, live reptiles, and alien-costumed extras. A glimpse at the calendar on CompEvent.com reveals other similar events, featuring rock n' roll acts, b-list celebrities and a host of other after-hour parties and perks—all so that cost containment professionals can convene on the latest industry trends and hock their services to browsing employers and insurers. The only party left out of these events? Injured workers.
"Even though the injured worker is the center of the claim, they're very far removed from what actually happens to them," says editor of WorkCompCentral.com David DePaolo. "It's very dehumanizing. Why aren't injured workers part of the conferences? It's because they're a number."
If you are an employee that has been hurt at work, you are facing an increasingly complex workers' compensation landscape. At Busch Law Offices, our legal team is committed to helping our clients navigate this landscape and recover the benefits they deserve. We have time and time again advocated for injured workers and fought against the inaccurate assertions of employers, insurers, and other parties trying to put their bottom line before the well-being of an employee.
Ready to start reviewing your workers' comp options? Contact us today to speak with our dedicated Loveland workers' comp attorneys.