The Report Stated; …“computer claims software’s utilized by 95% of the nation’s largest insurance companies, can be manipulated to produce unjustifiably low injury payments to consumers and tens of millions of dollars in illegitimate ‘savings’ for insurers.” 29
The Report Also Stated: …”unfortunately, these companies violate their obligation to deliver fair claims’ payments to their own policyholders on a huge scale, in order to increase profits.” 30
And finally: …”most of the nation’s top insurers use “Claim’s Handling Software’s” in ways that put millions of American consumers at risk of not getting the claims payments that they paid for with their premiums”. 31
We Practice In A World Of Improper Claims Tactics, Driven By Computers And Decision Point Guidelines 32
Decision Points …The set of factors for which Colossus determines a range of values that convert into settlement dollars using a formula . Decision points are the points by which Decisions are made regards value 33
The Formula To Convert “Decision Points” Into Settlement Dollars Is: “Point to Dollar Translation Percentage Multiplier” Formula! 34
Decision Points that Determine Value • 14,357 “Value Drivers” • 27,125 “Severity Drivers” • 26,350 “Standard Multipliers” • 33 “Liability Drivers” • 15 “Additional Increase Multipliers” • 67,847 Decision Points • PLUS: • Injury Severity Points • Case Maximizers • Prolonged Modifiers 35
Since …these decision points are not well known by the legal, medical or public communities, it makes it difficult to represent the full value of the injury. 36
80% 0% Of Of The e De Deci cisi sion on Poi oints nts Ar Are e Mi Miss ssin ing g In The e Average rage De Deman mand 37
Mi Miss ssin ing g De Decision cision Points ints Equal ual Mi Miss ssin ing g Settlement ttlement Do Dollar lars 38
Understanding that missing “Decision Points” cause missing settlement value. 39
How It Works To use these claim settlement software’s as Colossus, an adjuster inputs the “Decision Points” and “Value Drivers” about a claim and Colossus calculates a range of values for the claim's worth. 40
Original programmers at CSC, …Report Colossus was set up to calculate GENERAL DAMAGE CATEGORIES based upon Decision Point Guidelines in: Administrative Economic and Legal Areas 41
Original programmers at CSC …Report Colossus was also set up to calculate GENERAL MEDICAL INJURY (non-economic) damages based upon four (4) medical decision point corners of a claim. 42
1. Injury Severity Points 2. Duties Under Duress 3. Loss Of Enjoyment 4. % Whole Person Impairment 43
Assessing Medical Claim Value Injury Types:………………………..25% value Duties under Duress:…………….25% value Loss Of Enjoyment:……………….25% value % Whole Person Impairment:..25% value 100% value 44
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#1 Injury Severity Points Injuries are represented by diagnoses. Colossus requires double digit diagnoses represented by ICD 9 Codes. Average # of diagnosis = 4 HCFA form = room for 4 diagnoses 1 st area of missing Decision Points and missing value therefore is the diagnoses = 25% value 50
Las Vegas Attorney Steven Burris Reports …"When it comes to discussing the damages issues re injuries, the lawyer must stick to the four corners of the medical records documents. 1. Injury Severity Points 2. Duties Under Duress 3. Loss of Enjoyment 4. % Whole Person Impairment If it is not in the medical records, it doesn't count. Stupid rule, but that's apparently how it's done." 51
Therefore the physician is the single most important aspect of a Colossus case and data contained within the doctor’s chart notes, [not narrative] are the only source of information that adjustors are allowed to derive decision points from to enter into Colossus. 52
Injury Model Assessment International Classification of Functioning DRE Categories DBI Estimates Spine Impairment Summary Specific Disorders of the Spine 5th Edition AMA Guidelines Whole Person Impairment 53
Aaron DeShaw, ESQ “It’s no secret that many plaintiffs' attorneys believe there is nothing that can be done to prevent unfair settlements unless they involve major injuries”. He points out that this is NOT the case as soft tissue injuries meet the “Serious Injury Threshold”. 54
1. MTBI = Closed Head Injuries 2. Sensory Loss 3. Motor Loss /weakness 4. Range Of Motion Loss 5. Diminished Deep Tendon Responses 6. Disc (Disorder/Derangement) 7. Ligament Laxity (728.4 Loss of Segment Integrity/AOMSI) 8. Radiculopathies 9. Fractures (Vertebral Body, Uncinate Process) 10. Spondylolisthesis 55 11. Stenosis
#2 % Whole Person Impairment The evaluator must identify the involved body; Parts • Systems and • Functions • …The evaluator must list: AMA Guide Edition • Chapter and • Table • …used to make the WPI Determination. 56
Colossus Uses 5th Edition AMA Guides All claims should be assessed for whole person impairment according to 5 th edition guides. 57
Attorney Aaron DeShaw: "While the legal profession has historically used narrative-style demand letters to convey claims, much of the information provided in medical or legal narrative style demand letters has no value in Colossus. Adjusters look almost entirely to the medical records for the decision points that input value required by Colossus. Only a minority of lawyers and doctors have a clue what's going on. Attorneys need to convey data about the claim using TABLE format ”. 58
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SO, HOW CAN WE PREVENT OR REDUCE IMPROPER, LOW VALUATION ? 61
2 Main Factors All settlement claims will be devalued due to the use of the insurance company’s software’s and Business Process Improvement (BPI) culture, however settling a claim favorably without trial is dependent upon two main factors: 1 ). The physician’s ability to chart the medical decision points so they input value into Colossus and 2). The attorneys specific mirroring , formatting and sequencing of the decision points in the demand letter 62
Strict Requirements of Adjuster “The claims handling software’s themselves make a lot of demands on adjusters, requiring them to enter scores of information. You have to have a good medical record of what the injury is" …says Mr. Smith of American National Property and Casualty Co. 63
Peripherals "Any injury can have many peripherals attached to it. A neck injury might cause a pinched nerve, which may or may not cause injury down to the finger tip, for example. Colossus is very good at finding out what kind of injuries are actually present. The more information an adjuster inputs, the more accurate Colossus' calculation becomes”. 64
What To Include In Demand Because Colossus asks many specific questions about claims factors, you need to know what is being asked, what is being valued, what is missing and what to include in your demand. 65
Decision Points Normally Included In The Average Demand: Summary of Claim Background Damages Facts and faults of Accident - Liability Injuries and Treatment Economic factors (property damage, lost wages, etc). Medical Expenses – current and future Past Medical History Evaluation, Summary, settlement demand and supporting documents 66
Colossus Expert & Attorney Aaron Deshaw “ Plaintiffs' lawyers are frequently unaware of what other decision points & value drivers are treated as significant by Colossus”. 67
Value Drivers That Should Be Included In Every Demand: In response to the data contained in both the medical chart notes and the demand, Colossus will then bring up “drop - down” screens seeking additional information. 68
Colossus Questions Here are some of the medical “pop - up” questions Colossus will ask when seeking data. 69
As we review the following list, compare how many Administrative Legal Economic and Medical Decision Points are included and how many are omitted in both your medical experts chart notes and also in your demand. 70
Points To Be Included In Demand Medical, Administrative, Legal & Economic Decision Points Value Drivers Injury Severity Points Case Maximizers Prolonged Modifiers Standard Multipliers Additional Increase Multipliers Liability Drivers Injury Drivers Mileage Drivers Undisputed Statements Of Fact Points Of Memorandum Evidentiary Burdens Of Proof & Authorities 71
Points To Be Included In Demand Medical History Medical Office Records with Laboratory Tests, Special Tests, Diagnostic Procedures Hospital Records Records From Client Records From Other Sources Explanations For Delay In Seeking Care Explanations For Gaps In Treatment Medical Validation Letter – 2 nd opinion from independent 3 rd medical party 72
Functional Physical Examination Injury Types (ICD’s) [25% value of claim] Symptoms (Documented) Laboratory Tests Special Tests (CRMA/MDF) Diagnostic Procedures Specialist’s Evaluation Diagnoses (Double Digits) Complaints – (intensity, frequency, type, radiation, further effects) Duties Under Duress [25% value of claim] Loss Of Enjoyment [25% value of claim] Treatment Stability of Medical Condition 73
Medical Determination of Future Treatment Prognosis Overall Prognosis Each Body Area Future Treatment Plan Number of Future Visits (On stable injuries) Future Treatment Duration and Time Lines MMI For Each Body Part % Whole Person Impairment with Medical Validation Letter. [25% value of claim] Evidentiary burdens of proof showing soft tissue injuries meet “Serious Injury Thresholds” Diagnostic Related Estimates (DRE’s) Diagnosis Based Injuries (DBI’s) Spine Impairment Summary Specific Disorders Of The Spine Whole Person Impairment 74
Monetary Factors Administrative and legal costs Damages Current Medical Costs Future Medical Costs and Probability Economic Expenses & Loses Property Damage & any additional losses Vehicle Repair Costs Car Rental Expenses Mileage calculated @52 cents per mile Current Income Loss Future Income Loss Supportive Statements of Costs & Losses 75
ATTORNEY OUTLINE/ CHECKLIST FOR DEMAND LETTER Attorney Demand Letter Attorney Use this checklist to 1. Medical History tag and extract 2. Medical Office records 3. Hospital Records 4. Records From Other Source decision points and 5. Records From Client 6. Explain Delay in Seeking value drivers to be Care 7. Explain Gaps in Treatment 8. Physical Examination included in the 9. Injuries (ICD-9 codes) 10.Symptoms (Documented) demand to input 11.Laboratory Tests 12.Special Tests value into Colossus 13.Diagnostic Procedures 14. Specialist’s Evaluation 15.Medical Validation & Determination Letter 16.Diagnoses(double digits) 76
ATTORNEY OUTLINE/ CHECKLIST FOR DEMAND LETTER “Claim Finalization and Demand Letter” Attorney Demand Letter Attorney 17. Complaints – have to be 28.MMI For Each Body Part 29.% Whole Person Impairment rated according to; (Provided by MD Utilizing intensity, frequency, 5 th Edition AMA Guidelines type, radiation, further or with a Medical Validation Letter as effects a 2 nd Opinion from an MD) 18.Duties Under Duress 30.Monetary Damages 19.Loss Of Enjoyment • Current Medical Costs • 20.Treatment Future Medical Costs and Probability 21.Stability of Medical • Economic Loses Condition • Property Damage & any 22.Medical Determination of additional losses • Future Treatment Vehicle Repair Costs • Car Rental Expenses 23.Prognosis Overall • Mileage calculated @52 24.Prognosis Each Body Area cents per mile 25.Future Treatment Plan • Current Income Loss 26.Number of Future Visits • Future Income Loss • Supportive Statements (if Not Stable) of Costs & Losses 27. Future Treatment Duration and Time Line 77
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SOFT TISSUE INJURY LIABILITY CASE CLAIM RESERVE 2004 was $15,800 2015 is $5,800 79
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How Do We Win the “Greater Weight” of the Evidence Challenges? 82
Validate Colossus rates a 2nd opinion with weighted value. A 2 nd opinion, validation letter from an independent 3 rd medical party, is the court approved method to meet evidentiary burdens of proof to win the Greater Weight of the evidence challenges. 83
Validate The Case To: 1. Eliminate varying opinions 2. Establish preponderance meeting court accepted evidentiary burdens of proof 3. Win the “Greater Weight” of the Evidence challenges 4. Prevent Unfair Settlements 84
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Simply Stated • Improving Settlement Claim Value Is A Matter Of; …understanding and sequencing the Medical Decision Points with the Administrative, Economic and Legal Decision Points to interface with the insurance company software’s to input value into Colossus. •…And winning the Great Weight Challenges! 90
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LEVERAGING DEMAND LETTERS TO OBTAIN HIGH SETTLEMENTS Ronald J. Cook, ESQ Willoughby Stuart, Bening & Cook 50 W. San Fernando, Suite 400 San Jose, CA 95113 408.494.9211 408.295.6375 (fax) ron@wsbclawyers.com www.wsbclawyers.com
INTRODUCTION TYPICAL CASE Great Facts Serious Injury Clear (or close to it) Liability Good Plaintiff Inadequate Insurance Coverage 98
WHAT ARE THE LIMITS? Policy limits are confidential. (e.g., Ins. Code § 791.13; Griffith v. State Farm (1991) 230 Cal.App.3d 59, 65-68) --BUT SEE Boicourt v. Amex Assurance Co. (2000) 78 Cal.App.4th 1390 “No less an authority on insurance law than John Alan Appleman declared 40 years ago that a liability insurer ‘is playing with fire’ when it refuses to disclose policy limits. Such a refusal ‘cuts off the possibility of receiving an offer within the policy limits ’”. 99
WHAT ARE THE LIMITS? (cont.) Ask nicely-Many carriers volunteer information “Limits are more than adequate” Umbrella Coverage Personal Counsel Cooperation Use Boicourt to discover limits: Ins. Co. obligated to seek insured’s permission to disclose Refusal to ask is bad faith since settlement is impossible Send letter citing Boicourt and instructing carrier to forward a copy to the insured If insured refuses is that good news? 100
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