Having recently spent some time in a claim factory cranking out routine bodily injury claims in a major urban area, your image-breaking correspondent has an ever-increasing appreciation for the modern auto insurance claim adjuster. If auto is the major or only line an insurer writes, these bright, friendly, mostly young men and women working as staff adjusters and unit managers must live with a daily regimen of disasters. Those range from drunk drivers committing mayhem on the highways, a confusion of foreign-language-speaking insureds and claimants, indecipherable medical and police reports (penmanship is a lost art), claims involving smashed fenders, interrupted plans, and ill tempers.
They also deal with a regular dose of what has become known in the industry as LIST claims. These are low impact soft tissue auto injury claims where the damage was barely visible to either car. The police report — and maybe the insured's initial report — might even state that nobody was injured, but a week or so later along comes a letter from an attorney alleging that so-and-so and her seven kids who were in the back seat were severely injured and are under the care of an expensive physician. The claims may be third-party or first-party uninsured or underinsured motorist, or a combination of both. This is common when liability is not crystal clear. (Some insurers may refer to these as "MIST" claims — minimal impact, soft tissue.)
Certainly not all auto injury claims are LIST; we could wish that they might be! A good percentage of the new claims each day are going to be gut-wrenching bloody bone-breakers with either fatalities or many months of painful recuperation. But those, ultimately, are the easy ones. If limits are high, one can afford to invest in medical cost containment processes and efficient "old fashioned" claim-adjusting techniques, like actually visiting the insured or claimant and letting him know that his insurer — or in third-party claims, the other guy's insurer — is there to really help him. That is what makes adjusting a rewarding vocation; we can help people with serious problems. If limits are not high on the serious accident, the reserve and settlement may be at policy limits. One check and it is usually finished.
What is difficult about the LIST claim, however, is that they all tend to fit the same pattern. The impact to the vehicles is slight — traffic fender benders that scuff up the rear bumper or put a dent in a quarter panel. It doesn't send the stricken vehicle careening across the intersection and flipping upside down into a telephone pole. Nevertheless, within days Pa, Ma, and the kids and cousins are all suffering aches and pains they never had before, their necks and backs are killing them, and they all visit the family chiropractor. He treats each three times a week for three weeks, twice a week for another three, and then only once a week until their complaints have diminished enough that they only need to come back every other week. There never seems to be a finality to the cure. There also will be X-rays, pain medicine, and maybe, for good measure, a referral to some hospital for an MRI or CAT scan at more than a $1,000 bucks each. And every doctor's visit is bound to cost time from work, so the lost- wage claim will be growing exponentially, too.
Could this be what our good friends at the Insurance Information Institute call "soft fraud"? They define it as "opportunity fraud, … when a policyholder or claimant exaggerates a legitimate claim." (I.I.I.'s Fact Book 2006, page 126.)
The Advertising Law Firm
Those blessed enough to have something else to do during the day than watch television miss some great drama — the plaintiff attorney ads. We see a guy on crutches, his head swathed in bandages and his eye blackened, saying, "That old insurance adjuster was going to cheat me until I hired Sleazebag, Shyster & Shrewd, and they got me thousands of dollars in my settlement! Call 1-800-GETRICH today for your big check." Talk about claim factories.
Is it fraud? Is it all phony? It was going on long before I started in this business nearly 40 years ago, and it's just as bad today. Back then we called the lawyer/doctor teams "Whiplash Charlies." Is it dishonesty? Well, maybe…maybe not. First, I am certainly not going to suggest that all — or even most — plaintiff lawyers, even those who advertise, are a bunch of crooks. Over the years I've dealt with hundreds — maybe thousands — some even famous, nationally known and respected trial lawyers. Most deserve respect. They represent the "little guy" when the decks are stacked against him. They risk doing a lot of work for a doubtful reward under the contingency system. One I know handles employment-related cases. He wins all sorts of verdicts, but sometimes the defendant declares bankruptcy, or he appeals, or the defendant has no insurance and agrees to pay five dollars a year for the next two millennium. The kind of defendant who doesn't have insurance is the kind that will risk going to court rather than settling a case any ninny knows he'll lose. So the plaintiff attorney doesn't always prevail and walk away with a wad of dough, and neither does his client. On average, it takes today's law school graduate up to 20 years just to pay off the student loans. Don't be fooled by the cars they drive!
And what about the doctors? Neither am I going to suggest that all chiropractors, osteopaths, naturopaths, and orthopedic surgeons with a propensity toward aggressive (and expensive) surgery over more conservative care are dishonest. In soft tissue injuries, we're back to that old question of pain. What does it look like and how do you prove it is or is not there?
The "Soft Tissue" Injury
Mikel Benton, formerly senior editor of Claims, wrote an article entitled "Whiplash Possible at Low Speeds…." that was published in a November 2003 issue of our companion publication, National Underwriter. "The idea that people can't be injured in auto crashes that have no vehicle damage is an inaccurate one," she reported in her review of a presentation by Shannon Haddox, senior forensic analyst for Engineering and Fire Investigations of Dallas, Texas. "Human tissue fails over a certain amount of force in the same way that a vehicle will fail over a certain amount of force. Once a real collision velocity change approaches six miles per hour we start to see soft tissue symptoms," she wrote. "A common misconception is that no vehicle damage equals no injury potential. This is not necessarily the case."
As low speed rear-end collisions are common and produce many injury claims costing millions of dollars annually, the insurance industry has often questioned the validity of the whiplash claim where the claimant's vehicle was undamaged. To test whether such injuries could occur, specialized test dummies that did not have the stiff-neck configurations of standard test dummies were developed, Benton's report stated. These "performed relatively well and are in regular use in research on low-speed occupant kinematics and injury prevention," she said, noting that Haddox's study also had used human volunteers to test injury prediction, and that human testing "remains the most accurate method for predicting occupant response in low speed rear-end impacts." In the tests, some volunteers were unable to anticipate the impact while others were alerted by sound or sight to the impact. Other tests were run where the vehicle stopped suddenly with no impact. About six percent of the volunteers in each control group reported symptoms within three days.
As bumpers are supposed to withstand a five-mile-per-hour impact without any damage, the presence of even slight damage may indicate damage in excess of that speed. It's all a matter of physics and automotive engineering.
Who Selects the Physician?
That so many people involved in an auto accident utilize a chiropractor rather than a medical doctor also may be understandable. In many areas there are more chiropractic physicians available than medical or osteopathic physicians willing to work with an accident victim. Many will postpone billing their patients until treatment is complete while most M.D.s want their money up front. The patient may have no idea what the bill is — in some cases, it may be sent directly to the patient's insurer or attorney. It may have been the attorney who recommended the physician. Questionable practice, but probably not illegal and, if the patient/client is really hurting, perhaps not even unethical.
Any time a medical practitioner's billing seems out of line, there are ways to question it. For example, the American Chiropractic Association provides guidelines and may even assist in determining whether the treatment performed was justified under chiropractic procedures. If there is a question about whether the patient actually went to all of the treatments, it should be verified in any case where the treatment is extended over a long period of time. If billed for visits that never happened, that could potentially constitute fraud. For hospital and other medical providers who often bill in code, use of a medical bill auditing service often can provide interesting insight. Over-billing is not only unethical; if it wasn't just a computer error, it borders on or is fraud.
Get a Lawyer! Sue the Bum!
I recently challenged nationally known ethics columnist Randy Cohen on one of his responses to a reader. The reader had received a release from an insurance adjuster in order to settle her claim. She wondered if it was ethical to do so. Cohen replied that she should consult an attorney before signing any document. Considering that if she did, it probably would cost her something — just the time and expense of going to visit the attorney, if nothing else — and if she retained him, a good third of what she might ultimately collect. I questioned how ethical an answer that might be. After all, in many states adjusters have to be licensed by the state to deal with unrepresented claimants. If "ethics" required us to advise every claimant to see a lawyer, nobody could afford insurance! He replied with some vague answer, but would not concede that getting an attorney is not always the best idea. Keep in mind that the Unfair Claims Settlement Practices Acts require settlements that are not only prompt but also "fair" and "equitable." It's not equitable to the collective policyholders to overpay claims, nor is it fair for insureds to demand so, LIST or otherwise.
Certainly insurance company claim directors would prefer that all injured persons utilize physicians whose licenses are not restricted to just certain types of treatment and medication such as herbals. But many of the physicians who are graduates of prestigious medical colleges and universities with M.D. degrees can run up just as big a bill with diagnostic procedures, physical therapy, and medications — or even expensive back or neck surgery — all of which may or may not alleviate the patient's pain.
To say that only "soft tissue" is injured basically means nothing. If neck (cervical) muscles are strained, there may be pain. It may not have occurred for a few days, but if left alone, it also may disappear in a few days. Rubbing it, massaging it, pulling it, heating it, freezing it, and pounding the muscles with various and sundry mechanical devices may or may not make it feel better. But if the muscle has "frozen" in a spasm, only special exercises and physical therapy — or perhaps even chiropractic manipulation — may relieve the muscle tension.
The Pain Is All In Your Head!
Well, yes, technically speaking, pain is all in your head, because without the brain to recognize it, we would be like the rare individuals who have a brain defect that destroys their sense of touch. They can lay their hands on a hot stove burner and never feel it. Does that mean they're not being burned? Pain is one of the body's best defenses. Sometimes the pain control center in the brain malfunctions and produces pain where there is no injury to cause it. Consider, for example, amputees who sense pain in a limb they do not have. When pain nerves go haywire, it may be all in the patient's head, but it still hurts! Those who have ever suffered a broken bone (presumably what we in the claims industry would call "hard tissue,") know that once the bone is set and a cast, nails, or whatever locks the broken parts together, the pain goes away. It's only the tissue around the bone fracture that hurts. Hence, classifying all non-bone or non-tendon injuries as "soft tissue," is rather ridiculous. It's in the soft tissue of the skin, organs, or muscles where the nerves that detect pain are located. Hence, soft tissue injuries can be fatal.
Many years ago, as editor of the Crawford Risk Review, I ran a series of articles on the study of pain. It ranged from sociological studies to the use of thermography, which at the time was a popular means for physicians who handled a lot of auto accident injury patients to "prove" there was pain by showing infrared photographs of the inflammation caused by the accident. Whether or not it was all hooey I don't really know, though it has certainly fallen out of favor.
The studies show that different types of people express pain in different ways. Nordic ancestry people express it quite differently than do Mediterranean ancestry people. Some are more stoic, others clamor with the slightest twinge. Pain tolerances differ. Physicians often use a scale of one to 10 to describe pain. Some might bellow and pass out if scratched with a needle, others could have their hands chopped off and never whimper. Like our fingerprints and DNA, we are each different, and each reacts in a personal way. Is there pain? Who knows, except the patient saying there is? And what exactly is that pain worth?
Next month, we will continue our discussion of LIST claims with suggestions of how to better understand them, deal with them, and avoid the pitfalls that misunderstandings can create.
Ken Brownlee, CPCU, is a former adjuster and risk manager, based in Atlanta. He now authors and edits claim-adjusting textbooks.
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