PIP/Medpay Claims Archives

Category: PIP/Medpay Claims

Mar

Is tort reform in the Sunshine State even possible?

The Florida legislature is soon headed back into session with Governor Ron DeSantis aiming for the trial lawyers. At a recent stop in Jacksonville, he described the Sunshine State as a “cottage industry of litigation”.

He went on to say that, “If somebody is harmed, you should be able to get compensated. But I think what our system has done is, you’ll have a situation, someone’s really not liable, but you know if you bring a suit, it’s going to be more expensive to defend the suit. So you (the defendant) have an incentive, as kind of a cost of business, to just do a settlement because that will be cheaper than hiring lawyers to prove your innocence. The problem with that is that those costs get added on to everything that we do.”

What the governor says is a reality in Florida. As someone involved in insurance claims for over twenty-five years in this state, I am the first to attest that there is a tremendous amount of abuse. Arguably the biggest problems are Florida’s crazy, outdated no-fault system related to auto insurance claims coupled with a nonsensical pure comparative tort law that allows for people who are 99% at fault for their own injuries to still file a lawsuit.

Despite years of trying to find a solution, Floridians are paying record insurance premiums while Florida remains the most fraud prone state in the nation.

Ailing Florida insurance industry

Let’s take a look at what really needs to be done. In years past there have been attempts to fix and/or eliminate PIP. In late 2022 there was an attempt to fix Florida’s broken property system and the record premiums that Floridians pay, driven in large part by one way attorney fees and AOB abuse. The problem in Florida is systemic. Just turn on the TV at any hour of the day and watch the parade of attorneys, each promising more money than the next. Not to say that trial lawyers don’t serve a valuable purpose, they do. But there need to be guard rails to protect residents and businesses alike from some predatory and unscrupulous practices.

Florida has become a state where runaway jury verdicts on questionable injury claims have become commonplace. It is a state in which adjusters are routinely threatened with bad faith for simply doing their job of investigating claims. From Jacksonville to Miami and Pensacola to Key West, accident victims are being diagnosed with “disk” injuries that in most other states will be nothing more than soft tissue damage or aggravation of a pre-existing condition.

On the property side of the house, 79% of ALL property lawsuits in the United States are filed in Florida. Yet Florida is a mere 9% of the entire population of the United States. This statistic alone should reinforce the problems Floridians are facing.

So what does the Florida legislature need to do to fix the Sunshine State insurance mess? First, abolishing PIP would be a good start. It is a coverage that provides very limited benefit to recipients and which has become the leading cottage industry of frivolous litigation where disputes over pennies can result in thousands of dollars in attorney fees.

Add to that the lack of a liability insurance coverage for motorists. Florida is the only state with compulsory insurance that DOES NOT include a requirement that motorists carry bodily injury liability insurance. It is estimated that 40% of motorists on Florida roads are either uninsured or underinsured (no BI coverage) resulting in responsible motorists paying record high premiums for UM and UIM coverage.

As a specific example of how problematic uninsured driver’s are in Florida on my own vehicle I pay $145.49 for BI and PD coverage every six months. For that same period I pay $215.18 for UM and UIM coverage. When UM coverages are 67% HIGHER than regular coverages this is again emblematic of a systemic problem in Florida.

Recommendations for legislators

To truly pass meaningful new legislation that will work for the benefit of consumers and businesses, legislators should consider the following:

Eliminate PIP coverage and mandate BI limits of $25,000 per person and $50,000 per accident.
Modify the negligence law so that parties more than 50% at fault for a loss are barred from recovering damages from a third party. Currently, under Florida’s pure comparative negligence doctrine, a person who is 99% at fault is still allowed to sue for damages.
No pay, no play. Florida needs to bar uninsured motorists from recovery of non-economic damages, a solution effectively implemented in several states.
Cap attorney fees.
Cap tort damages for “pain and suffering.” Include a “loser pays” provision that applies to not only the plaintiff but their counsel.
Allow “bad faith” only in the rare situations in which an insurer truly does not honor their fiduciary duties. Enact penalties for trial lawyers who engage in so-called bad faith “setups.”
Allow a reasonable amount of time to investigate suspicious claims.
Give law enforcement the teeth necessary to pursue fraudsters while holding insurers harmless during their investigations.
Enact caps associated with Medicare and/or workers’ compensation, on treatment for soft tissue injuries, which comprise the vast majority of cases clogging our courts.

Unless Florida takes serious steps to address the frivolous litigation clogging our courts, in particular those related to “soft tissue” claims, the problem will not be solved. Both the insurance companies and the trial lawyers need to be held accountable. If insurers can commit bad faith, so to can trial lawyers. By truly understanding the problems in the Florida insurance system, hopefully the legislature can make meaningful changes to benefit consumers while attracting more businesses to our great state.

Christopher Tidball is an executive claims consultant, speaker and author of multiple claims improvement books, including “Re-Adjusted: 20 Essential Rules to Take Your Organization from Ordinary to Extraordinary” and the fictional “Deep State,” an insurance fraud thriller. Views expressed are the author’s own.

Sep

Winning the Subro Response Game to the tune of $18 Million Dollars!

One of the greatest challenges we had in my old claim’s organization was getting adjusters to respond to inbound subrogation demands and arbs. As one of the largest insurers in the nation these missed responses resulted in substantial payments that could have been avoided with a more robust subrogation response process in place.

Our situation was not unique but rather one that many insurers, TPA’s and self-insured’s grapple with. Why does this phenomenon occur? In our case we built an entire Six Sigma study around missed responses it came down to a very simple and predictable answer. Adjusters were busy. With a growing business, staff promotions, attrition, and ever evolving claims assignment models something simply had to give.

For today’s blog I want to share a recent case study from a Top 5 carrier. They were challenged with a backlog of inbound arbitrations and asked SecondLook, a New York based subrogation firm, to assist them in addressing this challenge.

This response task involved months of work and thousands of files worth tens of millions of dollars. At the end of the project the client evaluated their success based upon internal criteria and determined that the SecondLook response approach resulted in an $18 million dollar savings!

How can a response solution help you?

Everyone is busy. A subro demand that doesn’t get responded to has a high probability of turning into an arbitration filing that doesn’t get responded to. This will likely lead to an award for the filing company that will be paid by the company that failed to respond. This is real money that adds up. Fast!

The SecondLook response solution was developed specifically to help carriers, TPA’s and self-insureds get out in front of volume challenges. By leveraging this approach, it creates immediate bandwidth for adjusters and/or subrogation personnel to focus on higher probability, higher value claims to maximize bottom line results.

SecondLook has positioned itself as a leader in the subrogation space with a customized approach that is configurable to any organization. Their mission is to fit into the claims ecosystem as a plug and play solution. Unlike a one size fits all approach, SecondLook uses over 600 years of claims expertise to identify gaps in the end to end recovery process. The result has been the recovery of over one billion dollars for clients.

Chris Tidball is an Executive Claims Consultant with SecondLook, a leading provider of subrogation and claims consulting services. He spent more than 25 years with multiple leading carriers as an adjuster, manager, and executive. He is the author of multiple books including Re-Adjusted: Taking Your Claims Organization From Ordinary to Extraordinary. He can be reached at ctidball@2ndlook.net.

Jul

SecondLook and First OnSite Helping Clients Save Millions

Your business is in the path of a major weather event and following the storm you notice that you have incurred property damage. Is there a chance for you to recover funds associated with the property damage by means of subrogation? Yes, absolutely! For example, the building materials utilized such as a roof system and or how the roof was installed or constructed may have been faulty thus causing plausible means to recover funds via subrogation.

Our national restoration partner, First Onsite; has the capability to respond and mobilize assets to handle every component of the mitigation, restoration and reconstruction process no matter the task at hand. In partnering with First Onsite, SecondLook has added to its bench of industry experts to aid in the preservation of evidence as well as capabilities to obtain detailed documentation which contributes to streamlining the subrogation process. Through the partnership between SecondLook and First Onsite, we empower clients to act confidently during a property loss no matter how large or small it may be and ensure that we are going to work in their best interest throughout the entire subrogation and restoration process.

With over $1 billion dollars recovered for clients, SecondLook, Hauppauge NY, is lauded as a collaborative business partner. We drive results while freeing up your claims staff to focus on more complex issues. Areas of practice include Auto, Property, Worker’s Compensation (liens and credits), UM/UIM, Disability, Excess/Surplus, Healthcare, Reverse Subrogation and Subrogation Purchasing. The reason for our success is that our team is comprised of proven claims experts with years of expertise in adjusting, management, and executive leadership for some of the largest and most successful carriers in the industry. We understand your challenges because we have sat where you sit. Our unique solutions are specifically designed to make our clients more effective than ever.

For more information about SecondLook Inc. please visit our website at www.secondlook.net

Apr

Claims Calibration and Auditing for Success

For anyone who has reviewed closed claims there are often a lot of head scratching moments. I recall times when files were opened and there were signed releases and uncashed checks. There are too many times to recall when an adjuster clearly blew a liability decision and missed any subrogation potential. Sometimes there are inappropriate notes. Other times there is coverage when there really isn’t any or a denial when coverage should have been afforded.

Adjusters are busy. Training isn’t always consistent. Adjusting ability also isn’t a level playing field. Some people are naturally born investigators while others should probably have chosen a different career path. Imagine the challenge I had when tasked with creating consistency in a large claims organization, along with an audit department to hold our many branches, managers and reps accountable. It is no easy task, but it can be done.

Calibration is the key to getting consistent results. If you give one hundred adjusters the exact same claim file you are going to get one hundred different outcomes in most organizations. Some of those outcomes will be good, others marginal and some pretty darn bad. The goal of calibration exercises is to ensure that the bottom 90% of performers get the same outcomes as the top 10%.

As we did this in our organization it became clear that some of our challenges started higher up in the organization with some supervisors and even managers having challenges with things like basic liability assessment. As a result of these findings, it became abundantly clear that money was being left on the table, at which time we brought in SecondLook to identify what had been missed. A lot of this was due to poor liability calls on the front line, resulting in millions of dollars paid never being referred to subrogation to recover.

There are a number of different issues that arise from subpar claims handling, in particular when adjusters do not effectively identify and assess comparative negligence. First and foremost, adjusters are fiduciaries for their insured’s. They need to have the insured’s best financial interests in mind when making decisions. When a claim is paid based on the insured being 100% at fault but the insured clearly isn’t 100% at fault a valid question is whether the insurer is acting in good faith towards the policyholder, in particular in pure comparative states. Not only are people charged with an at fault surcharge, but they are also out a portion of their deductible for which they would otherwise be entitled.

Based on industry data it is estimated that 15% of all claims are closed with a missed subrogation opportunity. The cost to the industry is around $15 billion dollars per year. But what about the cost to the policyholders who are faced with surcharges and out a portion of their deductible.

This is an area that seems ripe for litigation. A savvy trial lawyer, or in the worst case, class action firm, could potentially build the case against insurers who are not acting in the best interests of their policyholders.

Many of our clients recognize the challenges facing adjusters and utilize our no cost closed file review process to identify missed subrogation. In a recent review of 100,000 closed New York PIP files we recovered over $2 million dollars missed by the front line adjuster, the subro department and an outside subrogation vendor. In another recent audit we discovered a significant portion of files being closed with no recoveries by a carrier subrogation vendor did indeed have subrogation potential which has now been recovered, with deductibles returned to the policyholders.

Creating a best in class closed file review process is a great way to maximize carrier bottom line, protect the interests of policyholder’s and can be used as an affirmative defense in the event of creative plaintiff litigation.

Chris Tidball is an executive claims consultant with SecondLook, a leader in insurance subrogation. His career spans thirty years as an adjuster, manager, executive and consultant with multiple leading insurers and insurtechs. Chris is the author of Re-Adjusted: Taking Your Claims Organization From Ordinary To Extraordinary! He has written multiple fiction and nonfiction books and is the creator of the television series The Adjuster. He can be reached at ctidball@2ndlook.net.

Sep

Show Me The Money – ReverseSubrogation™

Subrogation is derived from the Latin word subrogare and is the substitution of one person or group by another in respect to an insurance claim, accompanied by the transfer of any associated rights and duties.

For those of us immersed in the world of claims, subrogation is just part of the vernacular, but even then, a fair bit of subrogation gets missed each year, in particular when ReverseSubrogation™ comes into play. While statistics would indicated that roughly 15% of all subrogation is missed by insurers, that figure is closer to 100% when it comes to ReverseSubrogation™.

Many carriers and vendors, including SecondLook, have developed advanced analytics and algorithms to ID subrogation. In many cases, that is all that is needed, in particular on less complex claims. But analytics will only get your so far, as demonstrated in the chart, which is what led us to the creation of SecondLook Technology where we step beyond a tech only solution and incorporate over 600 years of claims expertise.

ReverseSubrogation™ can come into play in a variety of situations. For the purposes of this post, we will just discuss a couple of the more frequent scenarios involving PIP, construction and Amazon related claims. While the various PIP states have different limits and subrogation nuances, one that we frequently see in New York are underweight vehicles.

Let’s consider the scenario where a van owned by Joe’s Plumbing rear-ends another vehicle. The other vehicle carrier pays the injured party PIP and then subrogates because the gross vehicle weight (GVW) is over 6500 lbs. per a tag check. Herein lies the problem, and the challenge. This payment was not owed because the unladened weight of the vehicle was only 5200 pounds. But getting to this level of detail can be challenging in a world where adjusters are tasked with doing more with less, which is why this type of functionality is built into the SecondLook SecondLook Technology process. The success of our process was proven in a tertiary audit where SecondLook went in behind both the adjuster and the subrogation vendor and recovered $2 million dollars that both had missed on PIP losses.

Now lets consider the construction claim where a home was being remodeled by ABC Contracting. During the remodel, Manny’s Electric was hired to install a new electrical panel. Due to improper wiring, there was an ensuing fire. A claim was made against ABC which was honored by the carrier. However, it was closed prematurely as the contract between ABC and Manny’s had an indemnification clause which was identified in the SecondLook Technology process and pursued, resulting in successful recovery by the carrier for ABC against Manny’s carrier.

Even in the world of Amazon related claims, there have been a myriad of decisions that vary from state to state. In Texas, the courts have held that Amazon is not liable in instances where they do not hold title to a product. In California, and some other states, the results of been quite the opposite. Building this level of sophistication into a subrogation process is ever evolving and one where utilizing a closed file audit could yield substantial missed subrogation opportunities.

Subrogation can be challenging, and often beyond the capability of solely technology, which is why SecondLook Technology has modeled over 600 years of collective claims knowledge. By understanding the individual environments of different jurisdictions and complexities of laws and coverages, we are able to provide carriers with a substantial lift with our no cost closed file reviews that routinely identify missed subrogation which results in a big lift for your subrogation results.

Chris Tidball is an Executive Claims Consultant for SecondLook, a leading provider of subrogation services. He spent more than 20 years in adjusting, management and leadership positions with multiple Top 10 carriers and has authored multiple books, including Re-Adjusted: Taking Your Claims Organization From Ordinary To Extraordinary! He can be reached at ctidball@2ndlook.net.

Jun

Missed Subrogation Opportunities. Dare to Take a SecondLook!

Chris Tidball, SCLA, SSBB Executive Claims Consultant/Head Of Global Sales

Chris Tidball, Executive Claims Consultant – Suborgation Expert

I first came across SecondLook while running subrogation operations for a large multinational insurance company. In reviewing internal audit results and random files, it was evident that our adjusters were closing files that may contain subrogation.

Why was this happening? As is the case in most situations where opportunities for improvement exist, there was a combination of factors. First and foremost, adjusters are busy. They are continually asked to do more with less and measured on a variety of metrics. Simply put, things can fall through the cracks.

In fact, it is estimated that 15% of all claims are closed with a missed subrogation opportunity at an annual cost to the industry of over $15 billion dollars. When SecondLook approached me with a unique business proposition to identify missed subrogation at NO CHARGE, it was a no-brainer. They reviewed files that had been closed by liability adjusters where no subrogation had been identified. In the end, they identified a large percentage of claims where subrogation was overlooked. The net result for our organization was $5.4 million dollars.

Why were recoveries missed? Sometimes it was a simple error. Other times it was an evident case of comparative negligence where the adjuster did not apply fault properly. In more complex situations, it involved contribution or PIP loss transfer. What we learned was that there is always money to be found by reviewing closed files.

While the review process sounds simple, it involves a fair bit of strategy that leverages both technology and our combined six hundred years of claims expertise to narrow down claims where subrogation has likely been missed.

While many in the industry are getting ever more reliant on missed opportunity identification algorithms, our tact is slightly more traditional. Scientific ID methodology is a good start and is part of our process; it only gets you part of the way there. Given the state of technology today, it is estimated that an outstanding identification algorithm can find about 80% of the subrogation opportunities. What about the other 20%, which can often be a disproportionally higher percentage of recovery dollars? That is where SecondLook’s SecondLook Technology capabilities come into play.

SecondLook Technology is a proprietary blend of ID models, machine learning, AI, and extensive domain expertise that is unparalleled in the industry. By finding things that first, or even secondary reviews miss, we provide our clients with a win.

To demonstrate how this works, SecondLook deployed their technology at a large Top 10 insurer. We went in on a tertiary review to identify what the liability adjusters and the carrier’s primary subrogation vendor had missed. In this review of 100,000 files, we identified and recovered subrogation on over 400 (.4%) claims where both reviews failed to recognize the subrogation.

How carriers utilize our skills varies widely. For some, we handle all of their subrogation needs. For others, we handle only challenging and time-consuming aspects. The best use for the SecondLook team is wholly dependent upon what the carrier desires. We are not a one-size-fits-all, but our unique guarantee that we will always find money is something that is appealing to our growing number of clients.

At a time where competition is fierce, and pressure is on to maximize recoveries while lowering expenses, it is beneficial to have a partner who can both understand your needs and provide services designed to drive results.

While nobody knows how much money is buried in closed files, we do know that money is there. If you are interested in daring to take a SecondLook, we are here to help you find that money….at no charge.

Christopher Tidball is an Executive Claims Consultant with over thirty years of claims experience. Beginning as an adjuster, he served in various management and executive capacities for multiple industry-leading carriers. He is a recognized expert on claims process improvement and strategic technology. He is a frequent speaker at industry trade shows and the author of multiple books, including Re-Adjusted: Taking Your Claims Organization From Ordinary To Extraordinary!

I can be reached at (904) 742-9031, or EMAIL ME.

Is tort reform in the Sunshine State even possible?

Winning the Subro Response Game to the tune of $18 Million Dollars!

SecondLook and First OnSite Helping Clients Save Millions

Claims Calibration and Auditing for Success

Show Me The Money – ReverseSubrogation™

Missed Subrogation Opportunities. Dare to Take a SecondLook!

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