Glenn Youngkin's Carlyle Group Bought Sedgwick, Infamous Employee Disability Claim Company In 2018.

While Glenn Youngkin was COO of the Carlyle Group the firm made many purchases.  Real estate, energy, technology, basically anything a vulture private equity firm could get its hands on.  One of those companies, Sedgwick, is almost monolithic when it comes to its reach regarding employee disability claims.

There is nothing illegal about buying Sedgwick, but it is interesting how nearly every purchase made by this firms consolidates more money and power towards the top.  But first, a bit about Sedgwick “clients.”

The trouble began in December 2003, when Charles Romano sustained an injury to his left shoulder and cervical spine while stocking the shelves of Ralph’s Grocery Co. in Camarillo, California. Two years after the initial injury, Romano finally received the authorization required to proceed with surgery. Romano’s shoulder was healed, but he contracted a serious staph infection as a result of the procedure. Once healthy and hardy, Romano suffered both pulmonary and renal failure, followed by partial paralysis.

And what did Ralph’s Grocery Co. and its third party claims adjuster do once they realized that Romano had contracted an antibiotic-resistant staph infection, more commonly known as MRSA? As Romano suffered from this debilitating, multi-system illness, Sedgwick CMS delayed eleven requests for authorization and reimbursement.

But wait–it gets worse. Not only did Sedgwick CMS fail to deliver fair reimbursement in a timely fashion, they also ignored a judge’s direct order to provide Romano with the intensive care that he needed until his medical bills had reached a grand total of $24,000 a day.

The firm later provides an update-

Not long ago, we wrote about how Sedgwick CMS’s unreasonable delays in delivering treatment to an injured worker killed him.  Well, they’ve recently agreed to a $1,129,600 settlement in response to the allegations brought by the California Workers’ Compensation Appeals Board for labor code violations stemming from Sedgwick’s utilization review practices.

What is utilization review, anyway? An online search of the terms brings up a definition saying it’s a “safeguard against unnecessary and inappropriate medical care.” That’s not what I’ve observed.  I’d define it in the workers’ compensation claims management process as this:  “a tool used by insurance adjusters to delay or deny medical treatment prescribed by an injured worker’s authorized treating physician, by sending select medical records to a non-practicing physician in another state who has never seen the injured worker and paying him a fee, with the expectation that said physician will declare the requested medical procedure unreasonable and/or unnecessary.”

This story is not rare.  You can find hundreds if not thousands of similar stories, even, worse, regarding Sedgwick.  One of the most interesting elements of this is that the majority of worker’s comp claimants are working class, and frequently white males.  And I would dearly love to explain to these majority Trump voters how the Trumpkin is as we speak, likely, at least indirectly profiting off of any claim they may have filed in the past 20 years.

Carlyle, upon making the purchase announcement, was quite effusive in its praise of its “management.”

“[Sedgwick CEO] Dave North and Sedgwick’s world-class management team have built the company into an industry leader over the last two decades,” Stephen Wise, global head of healthcare for Carlyle, said in a news release.

“We are excited to collaborate with Sedgwick, which has distinguished itself by constantly improving the claims management and loss adjusting process to the benefit of all key stakeholders, including its colleagues, customers, insurance companies and brokers.”

Translation-we are happy to have acquired a company that has perfected squeezing worker’s compensation claimants.  Now who was COO at that time?  Why none other than Glenn Trumpkin Youngkin.

See Sedgwick is valuable precisely because the vast majority of its claims are worker’s compensation related.   This limits financial liability.  This makes them more profitable.  So if you bought a company that relies on worker’s comp litigation limits, maybe down the road, I don’t know..maybe..being Governor and having a hand in how worker’s compensation is handled in the state of Virginia could be advantageous?

Let’s look at what Progress Virginia thinks about Mr. Youngkin.

• In 2001, when Carlyle acquired Vought Aircraft Industries, Carlyle cut 20% of Vought’s 1,200 person unionized workforce.
  • When workers went on strike in 2009, Carlyle hired non-union workers, and hired guards to watch union members picket.

• According to Revolving Door Project Research, in 2005, Carlyle acquired Hawaiian Telecom. Over the years Carlyle engaged in several rounds of layoffs, despite assurances they wouldn’t fire members of the International Brotherhood of Electrical Workers (IBEW). As with other companies, Carlyle loaded Hawaiian Telecom up with $1.2 billion in debt, and the company eventually declared bankruptcy. Meanwhile Carlyle executives paid themselves hefty bonuses.

Clearly Youngkin has a history of his vulture capital firm investing in projects that leverage the well-being of the most vulnerable in society.  He is wrong for Virginia, and he is wrong for America.  Help Glenn Youngkin stay in the privatr sector by helping Terry McAuliffe here.

-ROC