Focusing on the facts can keep a claim out of the courtroom and the expenses in check. (Photo: iStock)

It is no secret that bodily injury severities continue to rise significantly faster than the rate of inflation.

Compounding the problem is that frequency is rising as well. Prior to 2015, the industry had taken note of the rising bodily injury (BI) indemnity costs, but took some solace in the declining frequency. With cars becoming safer, these divergent trends made sense in that there should be fewer injury claims, but those that were reported tended to be more serious, hence the rise in the average paid. All of that changed last year when both severities and frequency rose. Now insurers are faced with the increased challenge of being able to properly price for this double whammy.

The good news is that there are steps that can be taken to combat this rise. The bad news is that it requires the full attention of management who must effectively deliver consistency from all front line adjusters in order to get accurate settlements.

Consider a typical scenario. It’s been two years since the date of loss and the plaintiff attorney has been remiss at returning phone calls and responding to letters, and is basically ignoring any e-mails. Suddenly, a large demand lands on your desk with nearly $20,000 in medical bills!

The adjuster is puzzled because there was virtually no damage to either vehicle. However, the bills have been incurred and many adjusters will simply consider them at face value. While the bills may be questionable, attorneys are quick to point out that they will be able to black board the full value in many jurisdictions.

The proper rebuttal is to focus on the facts of the case, including both causation of injury and necessity of treatment. While attorneys may ultimately choose to litigate the case, this is a costly proposition for a highly improbable outcome. Carriers defending such cases have a wide array of tools in their arsenal to fight such runaway costs including bill review software, medical coding experts and independent medical examination doctors who will refute many, perhaps even all, aspects of the plaintiff’s claim.

The reality is that most claims do not go into litigation, let alone reach the courtroom. Plaintiff attorneys generally understand the limitations of their cases, just as adjusters do.

There are also a number of steps adjusters can take to proactively position a case for a settlement that is fair and just. Here are 12 steps to an accurate bodily injury outcome:

A police report provides independent verifcation of information.

    1. Police report

While generally considered to be inadmissible in court, this document can be a treasure trove of information that will assist with the investigation.

Was there any mention of an 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? Did the police respond, or was a counter report filed after the fact?

Adjusters rarely assess negligence when looking at claims.

2. Liability

Who is at fault for the accident?

Insurance adjusters across the industry assess comparative negligence on just 3% to 5% of all claims, a vast understatement of what should truly be assessed.

In looking at claims that are adjudicated, Jury Verdict Reporter has indicated that more than half of all claims involve facts pointing to shared liability.

Using tools such as ClaimIQ can provide adjusters with the critical elements needed to properly identify duties owed and breached.

Photos can tell an important story about an accident.

3. Vehicle photographs (auto claims)

Does the damage match? Are there paint transfers? A white car hitting a blue car will not leave a red paint transfer.

What is the directional force of impact? Is the damage such that the injury being claimed may be related?

Was there a mechanism for injury? For example, a lumbar injury in a sideswipe collision is highly improbable.

In addition, point of impact plays a significant role in the assessment of comparative fault.

Look for contributing to factors to an accident such as missing or inoperable signs.

4. 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.

Does the movement, as stated by the parties, correspond to what is being visualized?

First responders can provide important details regarding an accident.

5. Emergency room records

What was said to the emergency medical technicians 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? Is there any indication of pre-existing conditions?

Verify any treatment.

6. 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?

Can the patient describe where she went for treatment?

7. 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 or prior states? Can the claimant describe the doctor, medical facility and staff, and provide directions from home and/or work to the facility?

Take a close look at medical costs and how long treatment lasted.

8. Medical costs, duration and frequency of treatment

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?

Was a bill review tool used to price medical bills based upon proper jurisdictional benchmarks? Were there deceptive billing practices such as upcoding, unbundling or modifier abuse?

Ask about tests, X-rays and other medical records and whether they were reviewed by an independent medical expert.

9. Objectivity

Were there objective findings such as an X-ray, MRI or CT scan?

Were the records and films obtained and reviewed by an independent medical expert?

Was there any evidence of trauma or were the objective findings pre-existing?

Identify what kinds of medication were prescribed and if they matched the injuries.

10. Pain management

Did the doctor prescribe medication to ease the complaints of pain?

If so, then what type (analgesics, prescriptions, injections)?

Was the use excessive? Were opioids involved?

Match the treatment provided to the medical provider’s assessment plan notes.

11. ‘SOAP’ notes

Does the treatment being provided and billed match the medical provider’s 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 current procedural terminology coding and modifier abuse.

Check to see if the patient has suffered a number of other injuries.

12. Index and priors

Did the claimant have prior claims or injuries? There is a percentage of the population that will abuse the system in an attempt to get compensated for every malady.

Adjusters need to do a detailed investigation, including seeking out prior providers, reviewing prior indexes, requesting medical authorization and reviewing old claims. This can be time-consuming, but so is panning for gold. Digging deep during investigations is not only a requirement of the job, but it is part of the duty of being a fiduciary for the insured in order to pay only what is owed.

While there may be many additional steps, depending on the type and complexity of the investigation, these 12 are designed to provide a roadmap for success. By focusing on the basic fundamentals, leveraging the triad of people, processes and the right technology, insurers will find that they can effectively combat the rise in BI severities.

Christopher Tidball is a casualty claims consultant, industry veteran and author of multiple books.

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