Leveraging Colossus in Auto Accident Claim Recovery: Guidance for - - PowerPoint PPT Presentation

Leveraging Colossus in Auto Accident Claim Recovery: Guidance for Counsel

Maximizing Settlement Offers by Understanding and Using Insurance Adjustment Software

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1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific

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THURS DAY, NOVEMBER 14, 2013

Presenting a live 90-minute webinar with interactive Q&A

• Dr. Mat t hew J. DeGaet ano, Program Direct or and Founder, Personal Injury Institute, Dallas

Richard Hast ings, Founding Part ner, Hastings Cohan & Walsh, Ridgefield, Conn. Don J. Cervone, S r., Former Claims S pecialist , Adjuster's Secrets, Newt own, Conn.

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Personal Injury Institute

THE HISTORY OF COLOSSUS

Presented By:

• Dr. Matthew J. DeGaetano

Personal Injury Institute drmatt@personalinjuryinstitute.com

6

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

• ther 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
• r 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

All Injuries Must Be Identified

– Sprain/Strain cervical, thoracic and/or lumbar – Subluxation – Prolapse cervical, thoracic and/or lumbar – Bulge cervical, thoracic and/or lumbar – Herniation cervical, thoracic and/or lumbar – Dislocation cervical, thoracic and/or lumbar – Fracture cervical, thoracic and/or lumbar – Superficial Injuries all other body parts

33

Do You Know The Four IV Phases Of Whiplash? The s-shaped curve, w ith hyperextension of the low er segments and flexion of the upper segments. This is one of the chief points of injury and

• ccurs before the head strikes

the head restraint. Adapted from Ono et al.

34

IV Phases You Should Know

35

UNDERSTANDING THE EQUATION

• No human intuitive abilities
• Depends on the input of the claim handler

alone

• Garbage In – Garbage Out

36

IN THE ABSENSE OF COMMUNICATION, THE PATIENT IS THE VICTIM

• We need to speak the language of Colossus
• Symptoms
• Diagnosis
• Treatment
• Prognosis
• Additional Factors
• Permanent Impairments

37

What Is The Second Most Important Factor for PI Cases:

• Permanent Impairments.

38

Permanent Impairment

• Permanent Impairment is defined with the

following factors

• A medical condition resulting from trauma
• r work related disease or illness
• A deviation from normal function of a body

part or organ system

• Something the body or body part can no

longer perform normally

39

Permanent Impairment

• Permanent Impairment can only be

entered in the software when the injury has become

• Stable : Stopped Receiving treatment
• Static : When a period of time has passed

since treatment has stopped and the condition of the injury has not improved.

40

How does permanent impairment differ from disability:

• Disability is how the impairment affects and

changes the person’s ability to perform, social, or employment demands

• Impairment is a medical assessment
• Disability is a non-medical assessment

NOTE: Colossus is not capable of establishing an impairment rating,

• nly a qualified medical physicians can assess impairment ratings.

41

Colossus

• Colossus is NOT capable of assessing

brain damage

• The only head injury impairments, which

may be entered into colossus are related to sight, hearing, equilibrium, air passage,

• r mastication (TMJ)

42

Colossus

• Colossus Applies General Damage

Compensation For Impairments Based On The Following:

• The Body Part Or System Impaired

The Degree (Amount) Of The Impairment Assigned By The Medical Examiner Impairment Ratings Must Be Part AMA (American Medical Association) 5th Edition is recommended for its ease of use.

43

Injuries Diagnosed & Treated

• Minimum Competency To treat PI Patients
• The doctors ability to address each &

every Injury

44

PROPER AND COMPLETE DIAGNOSIS

• The Initial Records Must Reflect ALL Complaints

Of The Patient

• The Examination Should Indicate All Injuries

Related To Each Complaint

• Colossus Is Structured To Recognize Only The

Diagnosed Injuries Found In The Records

45

Insurance Industry Application

• f Colossus

Other Processors

• TEACH – State Farm
• Decision Point – Progressive
• Claims Outcome Advisor (COA) – GMAC &

Fireman's fund

• Injury IQ
• Claims IQ
• MYND
• Injury Claims Evaluation (ICE)

46

Insurance Industry Application

• f Colossus

Other Processors

• IMS, AIM, MEDICO, MBRS (Replaced By Mitchell

Medical), ADP, Ingenix, HELP Systems, Injury IQ, AIM, Mitchell Medical And Med-data

• The Billing MUST Identify

Dates Of Service Amount Of Each Modality ICD-9 Codes (Perhaps The Right ICD-9 Codes) CPT For Each Visit Patient Identification Medical Vendor (SIU?)

47

Insurance Industry Application

• f Colossus
• CSC is now managing all data and

evaluation of medical billings for Blue Cross Blue Shield and Group Health.

48

Insurance Industry Application

• f Colossus
• Continuum creates new company called ClaimIQ
• Mitchell International purchases ClaimIQ and merges

it with Decision Point.

• Mitchell then adds additional functions to ClaimIQ:
• InjuryIQ
• MedicalIQ
• LiabilityIQ
• NegotiationIQ

49

Insurance Industry Application of Colossus and Related Softw are

• Adjustor must now compare each billing record

to confirm all records are received prior to continuing with colossus.

• Once all confirmed – data input process may

proceed.

• Note: Significant Clinical Insight And

Determination Or There Lack Of May Increase Or Decrease The Value Ultimately Arrived By Colossus

50

DIAGNOSE ALL INJURIES SEPARATELY!!!!!!

• If the shoulder is included as a separate

injury then the colossus program would allow additional treatment for the shoulder.

• Although radiating pain increases the

value of the case, it does not increase it as much as diagnosing the symptom as a separate injury.

51

CPT Codes

• Using forms that contains CPT codes is huge

for your case for 2 reasons. It helps the office biller work more quickly AND helps the Colossus data entry person work more quickly to settle the claim. Keeping good medical records makes the claim adjuster and all attorneys’ jobs easier because they have all the “facts” to know what injuries were diagnosed.

52

The Third Most Important Clinical Consideration For PI Cases:

• Patient Complaints and Or

Symptoms.

53

DOCUMENTATION OF ALL SYMPTOMS

• After the injuries (diagnosis) are inputted,

colossus asks a series of questions associated with each injury.

• The corresponding input adds individual

value amounts to the claims general damage range.

54

IMPORTANT SYMPTOMS BUT OFTEN IGNORED

• Loss of range of motion
• Headaches
• Spasms
• Dizziness
• Visual disturbance
• Radiating pain
• Anxiety (must be treated)
• TMJ
• Stiffness
• Tightness

55

SYMPTOM DURATION

• It is not necessary that the provider

acknowledge the symptom on each date

• f treatment, because symptoms will vary

from visit to visit.

• However, the entire duration of the

symptom should be reflected in the chart notes.

56

PRE – EXISTING CONDITIONS

• If a plaintiff has a pre-existing condition,

Colossus will place a higher value on the claim, but this needs to be done properly.

• An asymptomatic condition with no treatment in

the past 24 months.

• Even a condition that was symptomatic there is

a need for clinical discussion.

57

Intake and Management Forms

• Attorney Intake Form
• DUD and LOE Worksheets
• Physician Intake/Discharge Form
• Physician Request Form
• Common Injury Code Sheet
• Supplemental HCFA Form
• Body Shop Questionnaire

58

Tips and Techniques for Adding Value to Your Client’s Claim with Adjusters who are using Colossus

Presented by: Richard Hastings Hastings Cohan & Walsh RPHASTINGS@SNET.NET

The four main players that can affect the value of a personal injury claim and what to do with each party

60

The Claimant’s Attorney Choreography

61

The Client Educate

62

The Healthcare Providers Understanding restrictions and providing detailed medical records

63

The Adjuster Constant contact and updating

64

Adding Value Through Your Client’s

Medical Records

• Educate your client
• Specifically describing pain complaints
• How do these problems affect them
• Duties under duress
• Home health activities and aids

65

Value Drivers

• Medical bills
• Specialists
• Positive diagnostic testing
• Buzz words and key phrases
• Use of medical devices and aids

66

Value Drivers

• Documented out-of-pocket expenses
• Medical insurance premiums
• Property damage to your client’s vehicle
• Documenting lost time from work
• Duties under duress

67

Putting it all Together

• Client Education
• Be proactive in the management of your files
• Robust medical records
• Detail all client challenges
• Constant communication with adjuster

68

The adjuster’s perspective

What you need to do to ensure the maximum value for your claim is to understand where you adjuster is fighting you every step of the way

Don J. Cervone, Sr. Adjuster's Secrets dcervone@earthlink.net Presented by:

First step

• The adjuster will try to contact the claimant

and keep them from hiring an attorney at all costs.

• Professional organizations will not actually say

anything negative about hiring an attorney (as it is illegal in many states) however they will try to build rapport in the hopes that the claimant may settle without representation.

70

Police reports

• To the average person the police officer’s

word is often taken as fact. When in many cases officers (although they are professional and try their best) make mistakes or misinterpret the law.

• Investigate the accident as if you were the
• fficer, speak with everyone involved. I have

destroyed cases speaking with witnesses.

71

Social Media

• As previously mentioned control of your client is

incredibly important.

• Facebook, Twitter, Craigslist, YouTube, I can’t tell

you how many times we have a claimant who is treating and complaining of soft tissue injuries and we obtain video on the internet of them dancing, performing, or better yet speaking of how they are taking advantage of the insurance company they are making a claim against.

72

Past incidents

• The idea is “take them as you find them” If you have

an eggshell client it is what it is.

• Make sure you check with your client and ensure that

there are no priors. Similar injuries, recent accident, etc.

• One claimant I dealt with had two accidents about a

week apart, two attorneys, two treatment regimens, and neither attorney knew of the other until I informed them both.

• Let’s just say the claim went away at that point. Know

your clients and do your homework or even what seems like a slam dunk will embarrass you.

73

Don ‘t look at this as something you want to settle

• The first time an adjuster picks up on your

comments mentioning you are looking to resolve, they assume you are not going to trial.

• Building rapport is important, but keep your cards

close to your chest if you want to win the game.

• Most insurance companies want to avoid trials at

all costs. Keep them guessing and never get the reputation of the attorney who just wants to settle claims and do high volume.

74

Demand Package

• When it arrives it becomes the document to take a few

hours and dissect. Each provider placed in a pile, each diagnosis, each bill, checked and double checked for accuracy.

• Adjusters simply need to call the health care providers

and say they want to settle the bill and request the

• balance. I have never had a provider fail to tell me a

balance if they wanted to get paid. There are no protections in reference to client medical information as there is none being given. Don’t misstate the amount owed to providers, it will be found out.

75

Using colossus or a similar program

Despite how well you put together your demand package a seasoned adjuster will enter what they want to and leave out what they want to. They control the outcome of the programs and the scale is tipped in their favor. PPD (permanent partial disability) if given will usually be excluded from the program entry to keep the values down. If given by anyone other than a medical doctor who is a specialist it is often disregarded.

76

Adjusters need your help

• When using a program such as colossus or a

similar program if you don’t feed the correct information to the adjuster they cannot and will not seek additional authority to offer you more money.

• If you can help them make a logical argument

why more money should be offered then you are helping your client and colleagues earn higher settlements.

77

Intangibles and the glass ceiling

• When Richard and I wrote our book on this

subject one of the main objectives is proper documentation of the specials, making sure your clients are treating with the appropriate specialists and controlling the process.

• Once you have mastered this everyone

believes that the outcome is determined by who is the better negotiator.

• Not True

78

The values given by computer programs to adjusters

• If you realize it or not many of these programs

are using data from past settled cases to give adjusters the range they are allowed to settle the claim in.

• If as an industry you continue to work

together and gain higher settlements through education and gaining information about the way adjusters work, eventually the ranges will be higher.

79

Intangibles which are not entered into Colossus

• As Matt and Richard touched upon presenting

your claim properly is key. Once that is done the value is determined and the negotiation begins. The problem is that most of you tend to focus on the specials and not enough on the general damages.

• ADL’s (activities of daily living) which are affected

negatively are almost never entered into these programs but they will allow the adjuster to articulate why they should pay more to settle the claim.

80

Why pay more?

• It is really simple, the vast majority of insurance

carriers don’t want to go to trial and will actually run contests in the office to see who can settle the most claims per week or month, etc.

• Take advantage of this fact and never ever let

them know you want to settle the claim. What you want is the best outcome for your client and if that means a few days in court beating up the insurance company, so be it.

81

In summary

• Adjusters enter what they want and omit what they

want to get the results they are seeking.

• They are investigating the claims far more than you

think, so do the same to avoid being surprised.

• Your settlements results are what drives the values

from computer programs like Colossus. If you don’t get the results up, the values will continue to go down. Work on every aspect of the claim and help your clients gain the money they deserve.

• If I can help in any way please let me know.

82