Shared Liability

It is incumbent upon adjusters to identify and accurately assess liability in any claim. The reality is that many claims involved shared liability, or comparative negligence. It is estimated that insurance carriers assess comparative negligence in just 3 to 5 percent of claims. According to Jury Verdict Reporter, an organization that tracks such results, more than half of claims involve scenarios other than clear liability, such as intersections, parking lots, or slip and falls. Needless to say, this gap provides a tremendous opportunity for insurers to improve bottom line results with more accurate outcomes.

The bigger question may be, “Why does this gap exist in the first place?” There are any number of reasons, from limitations of time to taking the path of least resistance to emphasizing the wrong metrics. As is so often the case, success stems from a fundamental execution of basic blocking and tackling of claims skills. In every auto claim that is being investigated, adjusters must consider the following:

Liability – Which driver was at-fault for the accident? There are only three possible outcomes: a.) the insured was at fault; b.) another party was at fault; or c.) there was shared fault among two or more parties. Far too often claims adjusters select either option “A” or “B.” Meanwhile juries, more often than not, choose “C” and apportion liability accordingly.

Damages – What were the economic and non-economic losses from the accident? Again, there are three possible outcomes:

• There are damages, and they are related to the accident.
• There are no damages.
• There are damages, but some or all of them are unrelated to the accident.

Like liability, it is important to remember that the path of least resistance often yields the wrong answer, as claimed injuries are not always related to the accident. The challenge to insurers is ensuring that both liability and damages are investigated concurrently. Commonly one or both are either overlooked or incomplete, thereby adversely impacting outcomes.

Prudent Investigations

There are immense opportunities for improving the accuracy and efficiency of claims investigations, evaluations, and negotiation strategies. At the outset of any claim, all involved parties should be contacted, including those who are claiming injury. If they are represented, then a request for a statement should be made through legal counsel, even though the request may not be granted. It is an important aspect of claims handling to document when and why this request was made. The attorney needs to understand early on that you have an obligation to thoroughly investigate injury causation as well as the frequency and duration of treatment.

There should be due diligence regarding the mechanism for injury, as well as a thorough investigation of potential pre-existing conditions or intervening causes. Index information, hospital checks, and public records searches provide a wealth of information, as do friends, neighbors, witnesses, and particularly ex-spouses. Taking the time to seek out those who may be able to shed light on the possibility of pre-existing conditions or intervening causes can prove invaluable in settlement negotiations, arbitration, or litigation.

Quantifying Bodily Injury

Another key component of the BI demand are the medical specialist fees, which may be inflated, and at times, unrelated, to the claim. Just because the attorney says it is so, doesn't make it so. In many instances, there are varying degrees of subjectivity in findings. There are also opportunities for billing errors, or even worse, intentional billing fraud. Claims adjusters today realize there is a high probability that medical bills contained in a BI demand are upcoded or unbundled. It is also possible there are issues pertaining to causation, duration, and frequency of treatment.

While adjusters generally aren't medical professionals, they do have the requisite training to identify questionable billing practices or treatment patterns. Therefore, it is the job of the adjuster to raise questions, often documented with the assistance of third-party medical billing review software, such as Mitchell International's DecisionPoint, to identify potential fraud, billing errors, or improper edits.

When the BI demand is received, the adjuster should review all contents to ensure that he or she can include the necessary documentation to complete the injury evaluation. There should also be a notation of any time limit demand requirements with the appropriate action taken to ensure a timely response. Generally, this requirement is met by either tendering an offer (when warranted) or notifying the attorney, in writing, of additional documentation necessary to complete the injury evaluation.

The job of the adjuster is to recognize impediments to the case being presented. For example, if the claimant is saying his lower back hurts but he was sideswiped, then where is the mechanism for injury? Similarly, be sure to look for red flags, such as a claimant stating he or she was “rear-ended yet thrown forward,” thereby defying the laws of physics.

Adjusters must also be cognizant of the increasing opportunistic fraud, such as certain deceptive billing practices. According to the office of the inspector general (OIG), modifiers 25 and 59 are used improperly more than 40 percent of the time, resulting in significant medical inflation. Modifier 59 is used to distinguish procedures that are not normally reported together, while modifier 25 identifies significant, separately identifiable evaluation and management services conducted on the same day. In some instances, the modifiers are used as a provider solution to get bills paid. However, it is important to recognize that improver usage can be considered abusive and can amount to fraudulent billing at times. Again, knowledge of coding is critical to identify bundling and unbundling scenarios.

When performed properly, BI claims investigations, evaluations, and settlements require significant amount of time, knowledge, and expertise. They require painstaking attention to detail and a fundamental understanding of biomechanics, medicine and medical bill coding. The most effective BI reviews incorporate a variety of processes to leverage the expertise of others with a higher degree of proficiency in these same areas. This in turn bolsters the adjuster's case while dramatically improving outcome accuracy. The result is an optimized process that increases productivity while reducing severities, a benefit for carrier and consumer alike.

Claims Negotiators

Certainly more than 3 percent of claims should be considered for comparative negligence, depending on claimant credibility, facts and jurisdiction. Mastery of this type of negotiation actually begins with the hiring process. Managers build a foundation of success by hiring curious minds. Although some are simply not cut out for a career in claims negotiation, managers can develop the right people by offering initial training and ongoing career support.

During my tenure implementing solutions for a large multinational insurer, for example, we leveraged tools such as ClaimIQ, which supports adjuster decisions throughout the claims process and provides them with a framework from which to formulate a negotiation strategy.

The Bodily Injury Demand: 10 Pieces of Critical Information

1. The police report. Was there mention of any injury at the scene? Was the injured party transported to a medical facility? Was there mention of contributing factors against the claimant? Were any witnesses identified?
2. Vehicle photographs (auto claims). Review the metal deformation, principal direction of force and pain transfers, telltale signs that can give rise to question or causation.  
3. Accident scene. Are there any other potential tortfeasors? Overgrown bushes, signal outages, missing or blocked signage, absentee third parties, and similar factors should always be investigated.
4. Emergency room records. What was said to the EMTs at the scene and during transport? What does the ER admission statement say? What type of pain was relayed to the treating physician? Was there a mention of symptoms other than what may be related to the accident? Is there any indication of drug or alcohol usage that could have contributed to the loss?
5. Medical treatment patterns. How soon did treatment begin? Were there gaps in treatment? Was treatment provided on evenings and/or weekends? Were you able to verify the treating physician's office hours?
6. Provider type. Was the claimant seen by a chiropractor or a medical doctor? If the latter, then what was his or her specialty, such as neurology, orthopedics, and so on? What are the medical professional's credentials? Is his or her licensure current? Are there any prior or pending disciplinary actions within the current state, or in prior states?
7. Treatment charges, duration, frequency and necessity. When did treatment start? How long did it last? Was it active or passive? Was it longer than an anticipated expected recovery date among the general population for a similar complaint? Are there indications of deceptive billing practices, such as upcoding, unbundling or modifier abuse?
   Consider the situation where an adjuster is reviewing a lumbar MRI that was billed under CPT codes 72148 and 72149 for $6,000 in a specific zip code. Without the proper tools to assist in medical bill repricing, they likely wouldn't realize that this is an unbundling scheme that should have been billed as CPT code 72158 for $3,900 in this particular zip code.
8. Objectivity. Where there objective findings, such as those from an x-ray, MRI, or CT scan? Were the records and films obtained and reviewed by an independent medical expert?
9. Pain management. Did the doctor prescribe medication to ease the complaints of pain? If so, then what type (analgesics, prescriptions, injections)?
10. SOAP notes. Does the treatment being provided and billed match the medical providers SOAP (subjective, objective, assessment, plan) notes which can be a great indicator of not only what treatment really occurred, but also a red flag for CPT coding and modifier abuse.