Archive for June, 2011

Overcoming the obstacles of subrogation response

Funny Car AccidentWhen it comes to the life of a claim, arguably some of the greatest organizational challenges arise during the subrogation process.  Perhaps nowhere is this more evident than subrogation response, a task often left to line adjusters struggling to manage ever increasing workloads. 

During my tenure as a claims process leader at multiple Top 10 P&C carriers, this was a challenge that we constantly faced.   Through our recognition of this area for improvement, we focused on continual process enhancements in order to remove these time consuming claims from the line adjusters scope of responsibility.  

While organizations have a myriad of processes and claims workflows, there are two constants that can drive improvements in subrogation response; Recognition and Response.  

Recognition- The first step to maximizing financial returns on subrogation response is through timely recognition and review of the demand.   In many organizations this can prove to be challenging in a world of competing priorities where higher emphasis may be placed on contacts, inspections and disposition. 

Response- With the advent of technology it is now possible to balance priorities while leveraging innovative new solutions to handle subrogation response.   This benefits the adjuster by freeing up time to address the most important priorities, as well as the organization which can get an immediate lift from technological innovation.  

The results of such actions will speak for themselves, with an improvement in indemnity, decreased cycle time and a reduction in intercompany arbitration.   In addition, technology will increase quality and accuracy by ensuring compliance with corporate guidelines, estimated standards AND identification of historical alternative parts availability.  

Companies such as Chicago based HyperQuest, provide a seamless and transparent workflow using patented technology, thereby enabling adjusters to hand off subrogation demands from claimant carriers.   In a traditional setting, these demands often find their way to the bottom of an incoming stack of mail.   In some organizations the estimates may be rubber stamped for payment or inadvertently forgotten, resulting in an increase in adverse intercompany arbitration filings.  In the best case scenarios, the subrogation demands may be submitted to an appraisal group for review using their estimating platform to be scrubbed for company compliance and industry standards.  The downside is that this formalized process will increase costs while limiting productivity with a limited impact on leakage. 

By identifying workflow opportunities, insurers have the ability to fundamentally transform the existing subrogation response process.  By leveraging technology, insurers can free up existing staff to focus on more critical tasks, such as contacts, inspections and claims disposition.   Most critically, changing the paradigm on subrogation response from reactive to proactive will have a profound impact on severity and expense improvement. 

Christopher Tidball is an executive claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   He is a twenty year insurance industry veteran having served in a variety of claims management, quality assurance and executive leadership positions.  To learn more, please call (904) 742-9031 or e-mail chris@christidball.com.

June 28, 2011 at 8:25 am Leave a comment

Leveraging liability to improve claims accuracy

If assessing liability is so important, why is it seemingly one of the most underutilized tools in the end to end claims process?   The reasons for not effectively executing liability decisions can range from a lack of understanding to a lack of time.   Whatever the reason, this results in money being left on the table.  

During my tenure as Quality Assurance Director and Claims Process Leader for a large multi-national insurer, this was a challenge that we were constantly confronted with.   It seemed that we were always asking the question, “Why is it that when shared liability is so evident it was never even addressed?” 

In speaking with line adjusters and management during audit wrap-ups the answers varied widely.   From “you don’t understand our tough jurisdiction” to “I’m not really sure how to explain joint and several liability” it seemed that nothing was off the table.  

Having moved up the adjusting ranks from an adjuster trainee in the streets of South Central Los Angeles, liability was an issue that served as a foundation from which claims would be settled.   As I discuss in Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary, assessing liability was never an option, and assessing it properly was part and parcel to career development.  

Much like other aspects of claims, liability assessment is a negotiation.   It is based upon the outcome of a critical investigation that requires the adjuster to properly gather evidence, document a file and identify the duties owed and breached of all involved parties. 

In some instances, liability may be against parties not directly involved in the claim or even completely absent.    Rarely is it 100% against any given party as borne out by statistics from a variety of jury verdict compilation resources generally reflecting a majority of shared culpability in final outcomes.  

As a claims consultant, one of my first questions to prospective clients is what percentage of the time is your organization assessing comparative fault?  While there is no definitive right answer, there are certainly answers that provide insight into opportunities, which are indicative of potential financial gain. 

In my own experience, organizational liability accuracy was often a challenge promulgated by rapid growth that necessitated advancement at a rate faster than the liability learning curve.    Accurate outcomes were hamstrung by limited jurisdictional understanding and adjusters that, at times, took the path of least resistance so as to limit potential adversarial interactions.  

Certainly our organization was not alone, as many claims executives have shared their frustration with a seemingly disproportionate percentage of claims being settled at either 100% or 0%.    When considering an organizational benchmark, it is critical to understand current results.  

It is this straightforward blocking and tackling approach that will enable any organization to elevate the bar.   While seemingly simplistic in nature, consider the frequency by which employees in an organization are unaware of their current results.   

Accuracy depends not only upon the adjuster, but is driven by jurisdiction as well.   When benchmarking, consider that results in Florida or California (pure comparative) will be different than New Jersey (modified) or Alabama (contributory).  

To best address jurisdictional variances, consider a tiered approach.   The goals that I had set for our organization for assessment of comparative on collision features was 30% in pure comparative states, 22% in modified states and 12% in contributory states.   The basis for the goals were derived from a combination of jury verdict reporting, organizational behavioral patterns and internal reporting using a standard deviation of current results obtained from the highest performing adjusters and offices. 

As is often the case with benchmarking and goals, it is incumbent upon the organization to not create a potential for unintended consequences.   For example, a mandate to increase comparative negligence has the potential to drive litigation and increase bad subrogation referrals.   To counterbalance this, a metric such as subrogation claims closed with no recovery can be used to identify files that may have been wrongfully assessed liability to simply meet a number.   In addition, files assessed with shared liability should be measured to ascertain which ones were ultimately paid at 100%.  

Concurrently, training can be a great resource to identify organizational gaps and remediate any shortcomings.   By increasing bench strength with proven training materials, organizations can be assured that liability accuracy will not only increase but so will negotiating effectiveness.  

When properly deployed, liability assessment initiatives will improve everything from accuracy and quality to cycle time and policyholder retention.    To be successful in court one must prove not only damages but liability.   The same holds true in the claims environment where proper tools, technology and staff will enable carriers to pay what they owe, when they owe it one a consistent basis.

Christopher Tidball is an insurance claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.    To learn more, please e-mail chris@christidball.com or call (904) 742-9031. 

 

 

June 27, 2011 at 9:26 am Leave a comment

Being a maverick can take your organization from ordinary to extraordinary

The Dallas Mavericks pulled off what many thought to be unthinkable in beating the Miami Heat for the NBA championship.   Throughout the series, Dallas often seemed to be down but with their fourth quarter surges proved that they were never out.   To the contrary, they exuded characteristics of winners by giving it their all until the final buzzer.   It is this type of focus, and commitment to the optimal outcome, that ultimately gave the Mavericks the slightest edge in their quest for the championship. 

It is this type of focus that can also take claims organizations from ordinary to extraordinary.   From the beginning of the claim to final disposition, not losing site of an accurate outcome is critical in giving organizations a competitive edge in the marketplace. 

During my tenure in various claims capacities, ranging from adjuster and manager to quality assurance and leadership roles, gaps were often identified in the process.   Just as I have found coaching a variety of sports over the years, these types of deficiencies can lead to improbable outcomes.  

The only sure way to win is to field a talented team who recognize AND have the tools to achieve accurate outcomes.   Just as a basketball team can get worn down come the fourth quarter, so too can a claims organization if the processes and workflows are not optimized. 

As I discuss in Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary, there is no room for error.   From First Notice of Loss to final disposition, each i must be dotted and each t must be crossed.   While not quite on par with the complexities of rocket science, claims does have its own unique set of challenges.  

From conducting timely investigations and writing accurate appraisals to identifying joint tortfeasors and subrogation opportunities, there are a myriad of opportunities to leave money on the table.  In the subrogation arena alone, more than 15% of claim are closed with a missed subrogation opportunity costing the P&C industry more than $15 billion dollars annually.  

Add to this overpayments on injury claims, estimate over writes, missed opportunities on LKQ or aftermarket parts, lack of rental control and missed fraud indicators and the dollars really start adding up.  

By recognizing the opportunities and developing workflow processes to address any potential gap, claim teams can be assured of improving results, all the way through final claim disposition.  Of course, the entire organization benefits as the result of a smooth transitional and transparent process that will improve cycle time, reduce claim costs, increase customer satisfaction while ultimately driving up quality and retention.  

Christopher Tidball is a claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary.   To learn more, e-mail chris@christidball.com or call (904) 742-9031.

June 14, 2011 at 7:30 am Leave a comment

The fourth quarter push and the impact on claim outcomes

Dirk Nowitzki of the Dallas Mavericks towers above the Heat defence.With Dallas taking a 3-2 lead in the best of seven NBA Finals, there is a distinct possibility that this series will come down to the wire.   The key to the Mavericks most recent win was, again, their fourth quarter surge.   It is this type of focus, and commitment to the optimal outcome, that has given Dallas the slightest edge in their quest for the championship. 

It is this type of focus that can also take claims organizations from ordinary to extraordinary.   From the beginning of the claim to final disposition, not losing site of an accurate outcome is critical in giving organizations a competitive edge in the marketplace. 

During my tenure in various claims capacities, ranging from adjuster and manager to quality assurance and leadership roles, gaps were often identified in the process.   Just as I have found coaching a variety of sports over the years, these types of deficiencies can lead to improbable outcomes.  

The only sure way to win is to field a talented team who recognize AND have the tools to achieve accurate outcomes.   Just as a basketball team can get worn down come the fourth quarter, so too can a claims organization if the processes and workflows are not optimized. 

As I discuss in Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary, there is no room for error.   From First Notice of Loss to final disposition, each i must be dotted and each t must be crossed.   While not quite on par with the complexities of rocket science, claims does have its own unique set of challenges.  

From conducting timely investigations and writing accurate appraisals to identifying joint tortfeasors and subrogation opportunities, there are a myriad of opportunities to leave money on the table.  In the subrogation arena alone, more than 15% of claim are closed with a missed subrogation opportunity costing the P&C industry more than $15 billion dollars annually.  

Add to this overpayments on injury claims, estimate overwrites, missed opportunities on LKQ or aftermarket parts, lack of rental control and missed fraud indicators and the dollars really start adding up.  

By recognizing the opportunities and developing workflow processes to address any potential gap, claim teams can be assured of improving results, all the way through final claim disposition.  Of course, the entire organization benefits as the result of a smooth transitional and transparent process that will improve cycle time, reduce claim costs, increase customer satisfaction while ultimately driving up quality and retention.  

Christopher Tidball is a claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary.   To learn more, e-mail chris@christidball.com or call (904) 742-9031.

June 10, 2011 at 6:16 am Leave a comment

Reinforcing the importance of preservation of evidence

It has been very interesting to watch defense challenges to evidence obtained during the Casey Anthony murder trial taking place in Orlando.   As many know, the state of Florida has charged Casey Anthony with the murder of her two year old daughter, accusing her of suffocating the child with duct tape.   As is often the case with criminal outcomes, the devil is in the details reinforcing the strict protocol by which evidence is gathered and preserved.  

The same holds true in civil litigaiton.  With spoliation of evidence claims on the rise, insurers need to be increasingly aware of steps that must be taken to preserve damaged property.   To better understand this, it is important to first recognize and understand the chain of custody. 

The inception of the chain of custody is the point in time at which evidence is collected and the chain must be maintained until the evidence is disposed of.   Evidence comes in all shapes and sizes, and depending upon the nature of your claim must be cared for in a variety of different ways.   This chain ensures continuity in the accountability and is essential as any break in the chain may invalidate admissibility in court. 

The chain of custody is a chronological written record of those individuals who have had custody of the evidence from its initial acquisition until its final disposition. These persons in the chain of custody must be identified and any person coming in contact with the evidence must be documented.

Ideally there will be an evidence custodian.   It is incumbent upon the custodian to be a steward of the evidence while documenting everything that happens through the lifecycle of the evidence process.   Even more critical is an understanding of the various state laws pertaining to evidence and spoliation thereof, which can leave the custodian liable for damages. 

It is often advisable to utilize an independent Evidence Custodian as this will minimize charges of tampering with evidence.   By securing evidence in an independent location, all parties associated with the claim will have access to the evidence. 

Another key part of the process involves the utilization of Evidence Receipts.   Evidence receipts are provided to those who deposit evidence.   The Evidence Custodian will always retain the original, a second goes to the person depositing the evidence and a third goes to a case file.   Having the ability to electronically retain this documentation and back up in an offsite, secured location is ideal.   

The original chain of custody form becomes a voucher and is given a voucher number when it is presented to the evidence custodian. Number evidence vouchers consecutively from inception to the current date.   This original voucher should not leave the custodian with the exception of submission to a court of law as evidence.  

An Evidence Sub voucher should be utilized to document any changes in the chain of custody that occur when the evidence leaves the evidence room.  Consider a situation in which a mold sample leaves the evidence room with the plaintiff attorney and is turned over to a toxicology expert for analysis, in which case a sub voucher would be utilized.  The number of the sub voucher should reflect the number of the original. 

Disposition of Evidence occurs when the materials in custody are no longer needed at which time the property should be turned over to the proper owner or if unknown to an applicable insurer, state or federal agency. 

_____

Christopher Tidball is a claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary.   His tips for success have been featured on MSNBC, CBS Market Watch, ABC, Yahoo Finance and in the Wall Street Journal and Kiplinger’s.   To learn more about optimizing your organizational results, please visit www.christidball.com or e-mail chris@christidball.com.

June 9, 2011 at 8:53 am Leave a comment

10 key questions to uncover staged accidents and exaggerated injuries

Each year billions of dollars are paid by insurers for inflated medical bills, exaggerated or pre-existing conditions and even injuries for accidents that never occurred.   It is often perceived that these types of claims are hard to identify and even harder to prosecute. 

As discussed in my book Re-Adjusted,  it is the level of detail to the investigation that separates the ordinary from the extraordinary.   Truth be known, the outcome of a quality  investigation can turn on ten simple questions.  While there are many more questions that should be asked, not asking these 10 often results in claims being overpaid or staged accidents not being proactively identified and prosecuted. 

1)      What is your name, address, date of birth and social security number?   Perhaps this is multiple questions, but the reality is that not having accurate personal information will result in prior injuries and other key personal information available through public records databases not being effectively utilized.   While seemingly intuitive, the frequency of missing information in claim files can’t be understated!

2)      Describe the accident, including the vehicle and driver responsible?  For anyone who has ever been in an accident, you know how traumatic this can be and often recall vivid details.      Yet, many who claim to be accident victims can’t describe anything about the incident, vehicles involved, drivers or location. 

3)      Describe your movement in the vehicle compartment at the time of impact?   A surprising number who rear ended claim to be thrown “violently forward” which simply defies the law of physics. 

4)      Describe the others in the vehicle you were occupying?  Simple question, but one that is tough to answer if the person wasn’t in the car at the time of loss.

5)      Describe the route taken from your home to your treating physician’s office?  Provide them with a map and ask them to draw the route. 

6)      Describe the physician’s office?   In some instances, it is beneficial to snap a photo of various medical facilities and see if they recognize any of them.

7)      Describe the physician?   During my years as an adjuster, I carried a portfolio of several people dressed in medical attire and asked the claimant if any of these people were involved in their treatment process.   Needless to say, many co-workers and neighbors were incorrectly identified as treating physicians or medical personnel. 

8)      Describe your pain, including locations of radiating pain?   It is always interesting to compare allegations of pain with actual dermatomal patterns.  If the pain pattern doesn’t make sense, it probably isn’t there.

9)      Describe any prior medical conditions you had prior to the accident, as well as any prior insurance claims?  Of course, the answer is quite often that they were in perfect health, despite 80% of the population suffering some type of back pain during the course of their life.   Using the answer to this question in conjunction with a detailed medical history search can yield incredible information, which can at times be used to impeach credibility. 

10)   Describe limitations of daily activity as the result of this accident?   When conducting a background check of the claimant, a key aspect is to identify acquaintances, friends and ex-spouses, who can often provide a dramatic picture of limitations before the accident.

Again, these are just a few of the many questions that should be asked during the course of the claims investigation.   Often, the answers will provide many other follow up questions.   By following a logical sequence of questioning, it is possible to elicit information which can raise questions of causation or even the legitimacy of the claim.

*****

Christopher Tidball is the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary and a frequent contributor to Claims Magazine.  He has more than twenty years of insurance experience, in roles ranging from adjusting and management to Six Sigma process improvement and executive leadership.  To learn more about how he can work with your company to dramatically improve bottom line results with no new implementation costs required, please visit www.christidball.com or e-mail chris@christidball.com

June 7, 2011 at 5:56 am Leave a comment

Driving the right claim outcomes

Driving the right claim outcomes can seem like a monumental task at times.   With adjusters, managers and executives facing the often competing priorities of customers, goals and shareholders it’s tough to juggle so many balls at once.   Often, the metrics by which they are measured drive the results that they strive for; but, are they always measured on the right metrics?

What’s more important; contacting a customer in two hours or putting a million dollars on the company’s bottom line?   While many basics, such as contacts and inspections, are addressed during the course of a claims investigation many other critical aspects are often left out that can cost the carrier money. 

How many files have you reviewed where there was clearly a liability issue but the file lacked a police report, witness statement, clear photographs depicting the point of impact or a scene investigation?  How many more files have you looked at that may have contained some or all of these critical items but the adjuster decided to pay 100%, despite the obvious comparative negligence. 

Intersection accidents, lane changes, parking lot accidents, he said/she said scenarios are all types of claims that have the potential to help companies striving to improve claims payment accuracy.   To achieve improved results, it is incumbent upon managers to provide a consistent message pertaining to quality.

Over the years, working in multiple capacities for multiple insurers, I have met adjusters and even managers who have limited understanding of such things as comparative negligence, empty seat defenses and joint & several liability.   Considering this, it should come as much of a surprise that industry statistics show nearly 15% of all claims are closed with a missed subrogation opportunity costing carriers billions of dollars annually.   The reality is that these figures are based upon carriers’ measurements against others who are also missing 15%, so the true figure is likely much higher. 

There are only so many hours in a day and often competing priorities, such as disposition, push adjusters to make hasty decisions, often with a bottom line impact.    Managers can only do so much, as much of their time is spent on administrative issues which come at the expense of quality.   The companies that truly set the bar for results have one thing in common; they rely on business partners to help them carry the heavy load.  

Take subrogation, an area often overlooked as a potential profit center.   Far too often money is left on the table because processes haven’t been established to put the right claim in the right hands.    This doesn’t mean adding to staff.   To the contrary, it means proper allocation of resources, which increases efficiencies allowing for greater economies of scale.   By utilizing innovative technology and proven workflow enhancements, insurers can improve productivity, quality and accuracy which reducing cycle time and leakage. 

Christopher Tidball is the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary.  Learn more at www.christidball.com or email chris@christidball.com

June 6, 2011 at 9:18 am Leave a comment

Older Posts


Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 146 other followers

Contact the Author

Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at chris@christidball.com

Kicked to the Curb

Kicked to the Curb

Re-Adjusted

Finding Millions on Twitter

Error: Twitter did not respond. Please wait a few minutes and refresh this page.