The friction between social mission and business mission that workers' compensation represents goes much deeper than the conflict an insurance company or third party administrator faces when pressured for profits.
Many of you, I'm sure, know of or have at least heard of the hedge fund industry.
In summary, hedge funds seek businesses in which there is an opportunity, at least perceived, to flip ownership stakes for short term profit. Usually this is done on borrowed money. And usually this activity occurs in low glamour, off-the-radar industries, like workers' compensation.
I get telephone inquiries all of the time from research groups seeking information about work comp on behalf of some investor. Usually these inquiries are in the medical supply side of the industry, and occasionally some other sector.
These investment groups have a single, very powerful, mission - short term profit.
Some might call it greed, but I think that's too powerful given that avidity underlies capitalism.
Still, when capitalism is not tempered with transparency then misguided rapacity damages companies and industries.
Copperfield Research, an otherwise anonymous entity, posted a 32-page report online on the stock market analysis website SeekingAlpha accusing professional employer organization Barrett Business Services, aka BBSI, of violating generally accepted accounting principles, under-reserving and overstating its income, warning investors that the self-insured entity should be viewed as an insurance company that is undercapitalized.
|Bowzer smells something wrong...|
The problem with the Copperfield report is that it is anonymous and, based on research by WorkCompCentral, appears to be tied to a short-selling investment group that has used "research" reports in the past in attempts to manipulate the stock market, and in the workers' compensation space no less.
Copperfield, which publishes anonymously on SeekingAlpha and the document-hosting website Scribd, issued a similar report about the risk management firm CorVel in 2012. The report accused CorVel of operating a “quasi-black market” preferred provider organization and said the company was “generating financial results that would appear to defy the laws of business.”
CorVel's stock was not as dramatically affected as BBSI's and has since generally recovered.
The Wall Street Journal posted an article exploring the idea that the research group was involved in “short selling” after Copperfield issued a negative report about MagicJack, an alternative phone service company.
Meanwhile, the California Office of Self Insurance Plans, which lists Barrett on its roster of private self-insured entities in the state, has no record of issuing a disciplinary or corrective action against the company, Department of Industrial Relations spokesperson Peter Melton told WorkCompCentral.
Barrett posted net income of $7.3 million in its second-quarter financial earnings report. That represents an increase of 24% from the second quarter of 2013.
All of which is to say that you can't believe everything you read, you must be skeptical whenever money is involved, and that the financial underpinnings of workers' compensation, like any other financial product, are highly susceptible to manipulation by people whose business mission clearly overrides their social conscience.
Postscript - many thanks to Mike Gavin, president of Prium, Inc., and formerly in the private equity industry for correcting my errors and my confusion between private equity and hedge funds.
No comments yet? David, great piece! “quasi-black market” Must share!! 99% of America needs to know!ReplyDelete
I always wondered how Corvel gets away with so many bizarre 'Recommendations for Non-Certification"... Their doctors and nurses, in and out of state, sure come up with some real doozies, too!
The most recent one received is that 'the neurologist called to have a peer-to-peer discussion with the neuro-psychologist at the brain injury treatment center RECREATION ROOM (yep, they provided the direct phone number used) (rather than the doctor's office, in another city) and then the insurance industry neurologist allegedly spoke with the Occupational Therapist and thereby determined no further treatment is required as there had not been sufficient progress noted.' D'oh!
(That neurologoist seems to be one of the WorkComp kind without any knowledge or expertise in brains, like the QME/AME's before, also capable of writing some pretty hilarious works of fiction into their expensive reports used to deny medical treatments to injured workers for years.)
As one civil attorney said, after hearing some of the whoppers, "Wow, you can't make this stuff up!" shaking his head.
Another Corvel APPEAL IN PROCESS today... all the Way to the Carrier Fraud Investigation Unit...with copies to the Big Company HR Executives, too. Too much finger pointing and too much 'not my job' going on in WorkComp worlds.
LOL What clowns! Date of injury 1/9/12, a witnessed slip and fall backwards with first approval for TBI treatment 8/4/14, and they say 24 days of very late treatment didn't fix anything much, so cut off the treatment .
So, off to the insurance Fraud Complaint email box I went, with a large distribution list and copies of medical records. Will follow up with this log link, it may help the Fraud peeps grasp the magnitude of the the issues of the little denials that happen all day, every day, to injured workers everywhere.
Yep, "The report accused CorVel of operating a “quasi-black market” preferred provider organization and said the company was “generating financial results that would appear to defy the laws of business.”
"These investment groups have a single, very powerful, mission - short term profit." Yep.
That makes these folks just like the Pro-Nukers; profits before lives, creating a 'WebOfDeath' in their tracks.
If any law agencies need a little insight on the nuts and bolts of how Corvel does what they do, encourage them to simple ask an injured worker. We know. #InjuredWorkersUniting #SilentNoMore
This comment has been removed by the author.ReplyDelete
IT IS bad enough when a person is hurt at work, but when it is done on purpose for profit IS the most evil. Cannibalism is not captialismReplyDelete
I am an injured worker who is experiencing horrific crimes set against me in a workers comp case. I have joined with other injured workers to spread awareness of this fact. "Crimes Against Injured Workers" is a forum for anyone who is concerned about injured workers. Although not all injured workers are the target of crimes, many have endured and suffered crimes of fraud, battery & maiming, harassment, vandalism, invasion of privacy, and much more. These crimes are well orchestrated and pitted against people who are injured and/or ill, who are in a vulnerable state, who have no idea of the crimes that may befall them. We believe that awareness is the key. Injured workers should be made aware of the most common crimes in the workers compensation system are those that are set out by Insurance carriers, Attorneys, Doctors, surgery centers and other medical providers. If we can’t stop these well-orchestrated crimes against injured workers, then perhaps we can warn injured workers at the very beginning of their claim so that they are not blindsided, so that they can be aware of the potential for intentional physical harm. You can help too. If you become aware of any person, business or medical provider, doing harm or cooperating in an intention to harm or commit fraud against an injured worker, we hope that you will expose it for what it is. Silence not only hurts the injured worker, but it also hurts the system.ReplyDelete
Crimes Against Injured Workers on Facebook.ReplyDelete
Hi David and All....ReplyDelete
In order to reach more InjuredWorkers, here's another little blog with some thoughts on how to thank you by sharing your blog, and how to use the opportunity you have just given InjuredWorkers everywhere to share a bit about their own stories.... on your blog, and bring any long rants to my blog and we'll roll from there.... or not. :)
Anyway, this is the fastest blog I've ever put together... I hope you let it ride... Many thanks again.... Nothing changes if Nothing Changes.
“WORKCOMP AND BASEBALL” — TRIAGE!!! #INJUREDWORKERS!!