Presenting a live 90-minute webinar with interactive Q&A Auto Accident Claims: The Influence of Colossus on Recoveries Guidance for Counsel on Insurance Adjustment Software to Maximize Settlement Offers THURSDAY, NOVEMBER 29, 2012 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Matthew J. DeGaetano, Certified Colossus Consultant, Personal Injury Institute , Lewisville, Texas Steven M. Gursten, Attorney, Michigan Auto Law , Farmington Hills, Mich. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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THE HISTORY OF COLOSSUS
7 Computer Software Program used by Insurance Companies The adjuster enters information about the claim into the program The program accesses over 10,720 rules or value drivers to evaluate over 750 injuries The program computes a settlement figure that is consistent with the severity of the patient’s injury
8 Value drivers! There are 10,720 What are value drivers?
9 Colossus arrives at an evaluation by assigning points to value drivers associated with each injury.
10 The actual assignment of points is determined by each individual insurer. They become the baseline data by which all injury values are arrived at.
11 Each insurer has the ability to manipulate this point assignment and database any time it wishes.
12 The points are represented by “value drivers” in a mathematical equation.
13 Some of the “value drivers” have multipliers as well. These multipliers add significant points to each “value driver”.
14 The mathematical equation consists of the following components, which must be indicated in the medical records and be specifically stated in the demand from the attorney
15 What Caused The Cultural Change In the Insurance Industry? • The Insurance Industry claim handling culture went through a major transformation during the mid 1990’s adopting the opinions and advice of McKinsey Consulting.
16 THE MEDICAL COMMUNITY ENVIRONMENT • This was accomplished by each individual insurer in conjunction with McKinsey Consulting (Arthur Anderson or Accenture as it is currently known, also contributed to some insurers’ transformation) through the creation and implementation of the McKinsey “Business Process Improvement” (BPI) culture. This transformation of claim culture is evident in the McKinsey documents Allstate has produced in other cases across the country.
17 Soft Tissue Injuries • The current industry percentage of these claims which would involve “soft tissue” injuries varies between 85 and 90 percent. The most common treating facility or practitioner sought for the treatment of “soft tissue” injuries is Chiropractic. The current industry percentage of Chiropractic involvement in these types of claims is as high as 95%. Most of the injured parties have either PIP/MPC benefits available to pay for the treatment. A very significant number of the injured parties also have either third party claims against an insured negligent tortfeasor or a first party claim under their UM/UIM (Uninsured Motorist/Underinsured Motorist) coverages.
18 THE CONTINUUM COMPANY • At about the same time, an Australia based computer software company creates Colossus. • Designed to evaluate claims based on: - Injuries - Treatment Specifics - Symptomology - Future need for Treatment - Impairments and Disabilities
19 COMPUTER SCIENCE CORPORATION • Licensed Colossus from the Australian Firm (Continuum Company) • CSC offered it to the insurance industry as a way of reducing claim payouts • McKinsey approved the venture and was retained by each of the insurers to calibrate the values of Colossus. • Calibration was performed by Arthur Anderson or A.K.A. as Accenture
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22 COLOSSUS IS MORE THAN JUST A SOFTWARE PROGRAM It is an Artificial Intelligence Program!
23 How Can The Artificial Intelligence Affect Your Office? • Colossus & National Insurance Crime Bureau (NICB) • They use this system for all doctors prior accidents, questionable cases, referrals, tax ID’s, SS#, looking for patterns
24 Colossus • The Colossus equation is designed to establish: Economic Damages or Special Damages – Medical Bills & Loss of Income Non – Economic Damages or General Damages – Pain & Suffering What does this mean?
25 UNTIL THE LATE 1980’S • Most claims were settled for 3-5 times the special damages For example: - $5000 in specials settled at $15000
26 Colossus • Therefore each INJURY MUST BE IDENTIFIED BY A QUALIFIED DOCTOR Example: If the patient had a sternum injury at the ER and it does treating facility does not recognize or diagnose that injury the claims representative is barred from imputing that additional injury. The result would have an impact on the final value of the claim.
27 66% savings “The case reserve in 1990 for a soft tissue injury liability claim was approximately $15,800.00 The case reserve for the same type of injury in 2001 was $5,800.00. This reduction in the claim severity was a direct result of the process and programs such as “MIST”, Minor Impact and “No Damage / No Injury”. This $10,000.00 savings per claim has a direct impact on profits realized from the claims department”. • This is the amount of dollars set aside by the insurer in anticipating the amount to paid on this type claim at settlement. The figure is based on a three year historical severity realized by the insurer. • Fowler vs. State Farm Mutual Automobile Insurance Company, Hawaii; The United States District Court For the District of Hawaii; Civil No. CV07 00071 SPK/KSC;
28 66% savings Considering that State Farm Claim Vice President (Fowler vs. State Farm) recently stated in a deposition. State Farm experiences 15,000 claims per day. It might be an eye opening exercise to have some economist actually extrapolate the direct and indirect economic impact on the public over the last fifteen years. • This is the amount of dollars set aside by the insurer in anticipating the amount to paid on this type claim at settlement. The figure is based on a three year historical severity realized by the insurer. • Fowler vs. State Farm Mutual Automobile Insurance Company, Hawaii; The United States District Court For the District of Hawaii; Civil No. CV07 00071 SPK/KSC;
29 THE ARTIFICIAL INTELLIGENCE OF COLOSSUS • Begins with database profiling - Chiropractors - Medical Doctors - Patients
30 DOCTORS HAVE BEEN DATABASED • If Colossus devalued most of your cases last year because: - You look poor notes - Failed to refer for a second opinion - Used the wrong terminology - Used the wrong prognosis - Did not objectify your findings with diagnostics - Did not monitor clinical progression with Outcomes Assessments - Did not use active care procedures • Then…………
31 UNDERSTANDING IS THE KEY If Attorneys, Medical Doctors, Chiropractors understand Colossus and work within its framework, then Colossus can be beat. We can win the whole pot even though we are holding a bad hand
32 The Entire Case Is Calculated From The Treating Physicians Records And Protocols. Attorney Demand Packages Are Obsolete!
33 What Are Our Clinical Tools • Flexion / Extension Views • Lateral Flexion Open Mouth • Digital Motion X-Ray • Proton Density MRI ( Upper Cervical Studies ) • AMA Guides For Permanent Impairment
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