Presenting a 90-Minute Encore Presentation of the Webinar with Live, Interactive Q&A Leveraging Colossus in Auto Accident Claim Recovery: Guidance for Counsel Maximizing Settlement Offers by Understanding and Using Insurance Adjustment Software THURSDAY, DECEMBER 4, 2014 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Dr. Matthew J. DeGaetano, Program Director and Founder, Personal Injury Institute , Dallas Richard Hastings, Founding Partner, Hastings Cohan & Walsh , Ridgefield, Conn. 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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Personal Injury Institute Dr. Matthew J. DeGaetano, drmatt@personalinjuryinstitute.com
THE HISTORY OF COLOSSUS 6
COLOSSUS COLOSSUS 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 7
Value drivers! There are 10,720 What are value drivers? 8
Colossus arrives at an evaluation by assigning points to value drivers associated with each injury. 9
The actual assignment of points is determined by each individual insurer. They become the baseline data by which all injury values are arrived at. 10
Each insurer has the ability to manipulate this point assignment and database any time it wishes. 11
The points are represented by “value drivers” in a mathematical equation. 12
Some of the “value drivers” have multipliers as well. These multipliers add significant points to each “value driver”. 13
• The mathematical equation consists of the injury, symptoms and other components, which all must be indicated in the medical records and be specifically stated in the demand from the attorney 14
The Number 1 Value Driver Or Factor For Personal Injury • Diagnoses 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. • 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 • 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 20
COLOSSUS MORE THAN JUST A SOFTWARE PROGRAM It is an Artificial Intelligence Program! 21
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 22
UNTIL THE LATE 1980’S • Most claims were settled for 3-5 times the special damages For example: - $5000 in specials settled at $15000 23
“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 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; 24
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; 25
PROVIDERS HAVE BEEN DATABASED • The offer it comes up with for claims you manage this year will be even lower! • BUT THAT IS NOT ALL: - The attorney in the case is also tracked! 26
ATTORNEYS HAVE BEEN DATABASED • Attorneys will be categorized as one representing threat of trial (and increased risk to the insurer) or one who will not go to trial • The non trial attorneys will receive lower settlement offers that those who try cases! 27
• If Colossus devalued most of your cases last year because: - Poor notes - Failed to refer for a second opinion - Used the wrong terminology - Used the wrong prognoses - Did not objectify your findings with diagnostics - Did not monitor clinical progression with correct Outcomes Assessments - Did not use active care procedures • Then………… 28
What Factors Is The Case Build Upon: • The Entire Case Is Calculated From The Treating Physicians Records And Protocols. 29
What Are Our Clinical Tools • Full Flexion / Extension Views • Lateral Flexion Open Mouth views bilateral • Flexion / Extension oblique views bilateral • Digital Motion X-Ray • EMG / NCV – Certified Neurologist • Diagnostic Ultrasound – Certified Radiologist • Proton Density MRI ( Upper Cervical Studies ) • AMA Guides For Permanent Impairment 30
Soft Tissue Injuries and the Attack by the Insurance Companies • Most doctors treat Soft Tissue Injuries • All doctors should be looking for. “CONNECTIVE TISSUE INJURIES” 31
All Injuries Must Be Identified – Contusions all other body parts – Sprain/Strain all other body parts – Fracture all other body parts – Dislocation all other body parts – Ligament injuries – usually associated with joints – Laceration all other body parts – Penetrating wounds all other body parts – Crush wounds all other body parts – Amputation all other body parts – Concussion – Lastly, dental injuries 32
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