Archive for October, 2012

Bodily Injury Demands: Effectively investigating, evaluating and negotiating your way to a competitive advantage

We see it time and time again, the stacks of papers that pile up on adjusters desks in the form of BI demands from attorneys for injuries being claimed as the result of an accident.   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.  

Attorneys are well aware that adjusters are very busy, often to the point of being overworked.   The same often holds true for attorney’s, who often utilize a staff 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.

When considering BI demands, it is important to focus on the fundamentals of claims handling.  While there are many important aspects to a claims investigation, the two most critical are liability and damages, for without both the claim does not exist. 

Liability– Who was at fault for the accident.  There are only three possible outcomes; A) the insured was at fault, B) another party was at fault or C) there was shared fault among two or more parties.  Far too often adjusters select either A or B while juries, more often than not, choose C and apportion liability. 

Damages– What was the economic and non-economic loss from the accident.  Again, there are three possible outcomes A) There are damages and they are related to the accident  B) There are no damages C) There are damages, but some or all of them are unrelated to the accident. 

The challenge to insurers is that both liability and damages should be investigated concurrently.  Often one, or both, are either overlooked or incomplete, having an adverse impact on outcomes.   Consider that the average assessment of comparative negligence by insurers nationwide is somewhere between 3 and 5%.   Then consider that more than half of all claims adjudicated involve scenarios other than clear liability.   Examples such as intersection accidents, sideswipes, slip and falls and liquor liability, to name a few, create a myriad of opportunities to improve basic blocking and tackling skills in the comparative negligence arena. 

Another critical skill to hone is that of the bodily injury investigation.   Over the past few weeks we have been focusing on liability and quantifying the multi-million dollar benefit to insurers and consumers alike with improved handling.  Today, we are going to focus on how to effectively investigate, evaluate and negotiation the damages aspect of the BI demand.  

At the outset of the claim, the injured party should be contacted.   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 the claim to document when and why this request was made.   The attorney needs to understand early on that you have an obligation to thoroughly investigate causation, duration and frequency 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 and public records searches provide a wealth of information.  So to do friends, neighbors, witnesses and, in particular, ex-spouses.   Taking the time to seek out those who may be able to shed light on the existence of pre-existing conditions can prove invaluable in settlement negotiations, arbitration or litigation. 

Another key component of the BI demand is the medical specials.  Just because the attorney says it is so, doesn’t make it so.   In many instances, there is a wide variety of subjectivity to findings.   There are also numerous opportunities for billing errors, or even worse, intentional billing fraud.  

There is a high probability that bills contained in a BI demand are upcoded  or unbundled.  There may also be an issue with causation, duration and frequency of treatment.  While adjusters generally aren’t medical professionals, they do have the training to identify questionable billing practices or treatment patterns.  It is the job of the adjuster to identify these issues and raise questions, often documented with the assistance of medical bill 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 the insurers and the consumer is significant.   Furthermore, by paying the right amount, insurers immediately gain a tremendous 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 money (when warranted) or notifying  the attorney, in writing, of additional documentation necessary to complete the injury evaluation. 

When reviewing the medical records, it is important to look at a variety of critical information:

1)      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?

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)      Accident scene – Are there any other potential tortfeasors?  Overgrown bushes, signal outages, missing or blocked signage, absentee third parties, etc.

4)      Emergency Room records– What does the 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?  

5)      Treatment patterns – How soon did treatment start?  Were there gaps?  Was there treatment on evenings and/or weekends? 

6)      Provider type – Was the claimant seen by a chiropractor or medical doctor.  If the latter, what was their specialty?   What are their credentials?  Is their licensure current?  Are there any prior or pending disciplinary actions with their current state, or prior states?   

7)      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)      Objectivity – Where there objective findings (X-Ray, MRI, CT Scan)?  Were the records and films obtained and reviewed by an independent medical expert?

9)      Pain Management– Did the doctor prescribe medication to ease the complaints of pain?  What type (analgesics, prescriptions, injections)?

10)   SOAP Notes– Does the treatment being charged 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 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.   But, 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 recognize impediments to the case being presented.  For example, if the claimant is saying their lower back hurts but they were sideswiped, where is the mechanism for injury?  Similarly, look for red flags such as a claimant stating they were rear-ended yet thrown forward, 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 is billed under CPT codes 72148 and 72149 for $3000 dollars.  At first glance, they likely wouldn’t realize that this is an unbundling scheme that should have been billed as CPT code 72158 for $1900 dollars.  

A further review of the medical records may show CPT codes billed as multiple regions, yet the SOAP notes indicate only one region, a red flag for upcoding. 

Perhaps a modifier of 93 was used, which is for interpreter services.  Who is the interpreter and why where they needed? 

According to the Office of the Inspector General (OIG) modifiers 25 and 59 are used improperly more than 40% of the time, resulting in significant medical inflation. 

When done properly, bodily injury claims investigations, evaluations and settlements take a significant amount of time, knowledge and expertise.   They require painstaking attention to detail and a fundamental understanding of biomechanics and medicine.   They often benefit from leveraging the expertise of others with a higher degree of proficiency in these same areas, which 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 outcomes that separates the extraordinary from the ordinary. 

Christopher Tidball is a claims consultant, speaker and author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   He is a claims veteran, having held a variety of adjusting, management and leadership positions with multiple Top 10 P&C organizations.   To learn more, please visit or e-mail


October 16, 2012 at 6:58 am Leave a comment

Not My Fault: Key steps to improving comparative negligence recognition in claims organizations

One of the key metrics in claims organizations looking to differentiate themselves is that of comparative negligence assessment.   Over the years, comparative negligence often took a back seat to other measures of performance.  Sure, there was talk about duties owed and duties breached, but it was almost impossible to measure in addition to being somewhat subjective in nature.  

The result seemed to be endless stacks of claim files where liability assessments fell into two buckets, 0% at fault and 100% at fault.   Certainly this outcome is plausible in some cases, such as rearenders; but what about intersection accidents, slip and falls, product defect or premises liability?  The reality is that the majority of cases adjudicated  are not clear cut, precisely why juries assess comparative fault more often than not. 

A big challenge confronting organizations looking for claims performance improvement is how to measure such results.    With improving technology, the ability to gauge performance is improving with the results, often less than 5% comparative negligence assessment, causing good reason for pause. 

How is it that so many claims are being paid at 100%?  There are a myriad of reasons, not the least of which it hasn’t been a key metric.   Couple that with adjuster workload and the perception that it takes longer to assess comparative negligence than to simply pay 100%.  Then there is the subjectivity that causes conflict with customers as well as with management.  All are valid and realistic concerns.  

Making comparative negligence a key metric is the quickest way to drive results, but be wary of unintended consequences.   The second a goal is laid out, comparative negligence assessments will increase, often on paper only.   It is quite easy to simply say the claimant was 5% at fault but pay 100% for “business reasons”.    It is also important to recognize that not all states are equal when it comes to negligence laws, and as such, metrics must be geared to pure comparative, modified and contributory venues with specific exceptions carved out for Michigan’s unique application of no fault  auto property damage laws. 

By understanding the potential unintended consequences, it is possible to more clearly measure true results.   For instance, excluding certain types of claims, such as rear enders,  from the overall pool of claims being measured can hone in on overlooked opportunities.   During my tenure developing just such metrics the focus was on specific accident types such as intersections, lane changes and rear end collisions.   

The next challenge is adjuster workload and the extra time it may take to settle comparative negligence claims.   While some adjusters struggle with this, others excel.   The key is in the execution of basic blocking and tackling.   When investigating a claim, there should be a phase during which all parties to the claim are educated of the negligence laws in their state.   To do this effectively, there must be a fundamental understanding of duties owed and duties breached within the claims organization.   For instance,  an insured making a left turn may have owed a greater duty to yield the right of way but perhaps the claimant ignored the fact that the insured had gained control of the intersection.   While the breaches may vary in degree of duty owed, it does result in some shared culpability.  

Then there is the crutch of subjectivity, from which a variety of justifications to pay 100% are derived.  There is the old, “Well, if I don’t pay 100%, they will get an attorney.”  They very well might, but they also might if you pay 100% and then you just made the job of the bodily injury adjuster that much more difficult.    There is also the subjectivity of assessing a case at 50/50 or 60/40.   Small degrees of difference are fair debate; what isn’t is to settle a clear comparative case at 100%.  

So how does the organization looking for improvement succeed?   Just like the football team looking to make the playoffs.  It’s a back to basics approach that involves a simple playbook.   The focus has to be on liability, and it needs to become cultural in nature.  It can’t simply be a mandate of simply meeting goals.   Rather, it is a focus on doing the right thing throughout the life of the claim.   This includes proper investigations, accurate liability assessments and effective negotiations.  

A great way to instill this throughout one’s organization is with proven liability tools, such as ClaimIQ, that provide basic guidance to better understanding liability while freeing up adjusters to make the final decision based upon company best practices.    Of course, with improved liability skills come the derivative benefits such as increased subrogation recognition, reduced severities and increased customer retention as the result of more competitive rates. 

As discussed in Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary, the benefit of technology is that it not only is easy to integrate, but provides back end reporting to assist in measuring improvement, quantifying results and raising the bar for the entire industry.  It is this continuous process improvement that ultimately gives adopters of the comparative negligence accuracy philosophy a competitive advantage in the marketplace.


Christopher Tidball is a claims consultant the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary!  His experience spans twenty five years in varying adjusting, management and executive roles for multiple leading insurers.   To learn more, please visit or e-mail


October 9, 2012 at 7:43 am Leave a comment

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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

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