If you watch daytime television, you might be thinking that everyone is getting six and seven figures for their personal injury claim.  Just ask the trial lawyer advertising on Judge Judy or the back of the local bus.   The reality is most claims are worth far less than that.  Despite average BI’s continuing to rise and nuclear verdicts appearing outside of the traditional “judicial hellholes”, it is still possible to pay only what is owed for personal injury claims.

But we live in challenging times.   Carriers continue to push adjusters to do more with less.  Disposition demands often take precedent over a good, solid investigations.   At the end of the day something has to give, and sometimes that is the quality of the claim file.

Adjusters are often overwhelmed.  We see it time and time again; stacks of papers piling up on claims adjusters’ desks in the form of bodily injury (BI) demands from attorneys for injuries supposedly sustained as the result of an auto accident, slip and fall or other type of injury. Of course, the attorney’s client is never at fault, and most certainly the alleged injuries are always the result of your insured’s negligence. Does this sound familiar?

Like a game of cat and mouse, some attorneys will try to take advantage of busy adjusters to maximize settlements for their clients, at times garnering far more than the claim may actually be worth. It should be said, however, that the tables can be turned, as attorneys are equally as busy, often necessitating the use of associates, or negotiators, to push through an even greater volume of work. Fortunately, this latter bit of information can be of invaluable assistance when evaluating and negotiating injury claims.

The truth of the matter is that attorneys get paid based upon how much they collect. Their contingency fee is often one third of the settlement value, and perhaps 40 percent if a lawsuit is filed. The same cannot be said of adjusters, whose obligation is to conduct a thorough investigation in order to arrive at a fair value based upon the facts and evidence presented. Herein lies the challenge for organizations trying to intersect accuracy with perfection.

Core Claims Skills
As is so often the case, success stems from the fundamental execution of basic blocking and tackling claims skills. While there are many important aspects to a claim investigation, the two most critical are liability and damages, as the claim would not exist without both.

Liability – Let’s take a look at an auto accident.   Which driver was at-fault for the accident? There are only three possible outcomes:

  • The insured was at fault.
  • The claimant was at fault.
  • There was  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, 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.

Consider that, on average, comparative negligence by insurers nationwide is assessed on somewhere between 3 and 5 percent of all claims. Let’s also consider the fact that research on jury verdicts indicates that around 55 percent of all claims adjudicated involve scenarios other than clear liability. These may include intersection accidents, sideswipes, slip-and-fall accidents, and liquor liability. In other words, a myriad of opportunities exist to improve basic blocking and tackling skills in the comparative negligence arena.

Accurate Investigations

In addition to liability, 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, social media 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 existence of pre-existing conditions or intervening causes can prove invaluable in settlement negotiations, arbitration, or litigation. Most importantly, this doesn’t need to be burdensome on adjusters who should rely on networks of key business partners to do the heavy lifting.

For carriers concerned about the expense of such detailed investigations, consider how much subrogation is being overlooked by simply missing comp neg situations.   Those dollars alone could pay for solutions that can dramatically improve BI indemnities.

To put this in perspective, during my tenure overseeing aspects of claims operations for a large global carrier we faced challenges as it related to comparative negligence assessment.   Adjusters were just too busy.   Disposition demands were simply too great.   Something had to give, and it was often the underlying investigation.   We brought in SecondLook to review closed files and their ID and recovery of missed subrogation alone provided enough lift to justify the costs of a liability and injury tool that made a quantifiable difference in the future of claims handling.

Quantifying Bodily Injury 

Another key component of the BI demand are the medical specials, 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 numerous opportunities for billing errors, or even worse, intentional billing fraud. Some claims adjusters today may not 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. Thus, it is the job of the adjuster to identify these issues and raise questions, often documented with the assistance of third-party medical billing review software to identify potential fraud, billing errors or improper edits.

By further leveraging medical experts or those fluent in billing and coding, a tremendous amount of medical inflation could be avoided. By coupling this knowledge with proper liability assessment, the benefit to insurers and the policyholder, for which they are a fiduciary, is significant. Furthermore, by paying the right amount, insurers immediately gain a tremendous competitive advantage in an increasingly challenging marketplace.

When the BI demand is received, the adjuster should review all contents to ensure that they 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.

10 Pieces of Critical Information

When reviewing the bodily injury demand, it is important to look at a variety of critical information:

  1. The police report. Was there any mention of any injury at the scene? Was the injured party transported to a medical facility? Was there any mention of contributing factors against the claimant? Were any witnesses identified?
  2. Vehicle photographs (auto claims).Does the damage match? Are there paint transfers? What is the directional force of impact? Is the damage such that the injury being claimed may be related?
  3. The 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.  If you are dealing with a slip and fall or other commercial type of situation, is their video surveillance?
  4. Emergency room records. What was said to the EMT’s at the scene and during transport? What does the ER admission statement say?  What type of pain was related 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 may 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 treating physician office hours?
  6. Provider type. Was the claimant seen by a chiropractor or 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 with the current state, or in prior states?
  7. The duration and frequency. 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?
  8. Were 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?   Request the films and have them reviewed.  If the attorney refuses, this is always discoverable.   Utilize a company such as Authentic4D to get an impartial review by fellowship-trained and subspecialized radiologists.  In a recent case in the Rio Grande Valley, universally considered to be a “judicial hellhole”, this company was utilized and the results were presented to the jury which resulted in an award of ZERO against a seven figure demand.
  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.

While just touching on some of the key components of the proper investigation, it becomes easier to visualize just how complex the role of the casualty adjuster can be. However, the BI evaluation is just part of the equation, as there must be an effective negotiation strategy to bring the claim to closure.

The job of the adjuster is to properly investigate a claim and pay what is owed.  Part of this process is to recognize impediments to the case being presented. For example, if the claimant is saying his or her lower back hurts but they were sideswiped, 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.

It is this attention to detail that allows for a case to be built to most accurately support and settle the pending claim. By further leveraging tools to identify potential fraud or billing errors, the adjuster not only increases productivity but also gathers the proof necessary to support contentions gathered during the investigative phase.

Consider the situation where an adjuster is reviewing a lumbar MRI that was billed under CPT codes 72148 and 72149 for $4,000. 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 $2,300.

A further review of the medical records may show CPT codes billed as multiple regions, yet the SOAP notes indicate only one region. This is a red flag for upcoding. Or perhaps a modifier of “93” was used, which denotes interpreter services. Who is the interpreter, and why were they needed? This is another basic question that should be asked but is too often overlooked during the course of the BI evaluation.

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 improper 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 a 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.

In the end there is a quantifiable correlation to best-in-class service, quality, and optimal outcomes that separate the extraordinary from the ordinary.

Chris Tidball is an Executive Claims Consultant with SecondLook, an industry leader of insurance consulting and recovery services.   He began his career as an adjuster and has worked for multiple top 10 carriers in management and leadership roles.   He is the author of Re-Adjusted:  Taking Your Claims Organization From Ordinary To Extraordinary.   He is the creator of The Adjuster screenplay which is adapted from his fictional thriller Deep State.   To learn more visit www.secondlook.net or contact him at ctidball@2ndlook.net.