People, Process and Technology
Delivering Better Outcomes in Liability Claims
UR Partner is the premier industry resource in leveraging technology, people, and processes in impacting one of the main pain points in liability settlements, accurately valuing special damages.
Today, many carriers use applications and modifiers to determine figures when resolving liability claims. The foundation for this calculation is the dollar amount of special damages or what was paid for medical care and lost wages. As a result of long-standing practices, the total sum of special damages can be inflated. It is extremely important that this foundational figure be accurate and represent the actual loss incurred.
This brief article explains some of the challenges in defending liability claims and how leveraging technology and expert resources can help keep resolutions reasonable and equitable.
Phantom Damages & Specialty Bill Review
Phantom damages are based on a well-accepted legal doctrine, the collateral source rule. This pronouncement allows the plaintiff to recuperate the difference between what was billed for care provided and what was actually paid by the plaintiff versus other third parties. When the plaintiff is insured, this difference can represent an exorbitant number. Many States allow the injured person to be compensated for these “phantom damages” when determining the amount of a settlement. On its face, this seems contrary to the principle of indemnification, for an injured party to be compensated for damages they did not actually sustain.
There are ways to defend and attempt to reduce phantom damages. One method is to establish the “reasonable value” of the care provided. Many courts are beginning to accept that settlements should not necessarily be based on what was billed, but what is the reasonable value of the services in the marketplace. As noted previously, plaintiffs will argue the collateral source rule, however, this edict was never intended to replace or bar evidence pointing to the reasonable value of care provided.
UR Partner offers customized, specialty retrospective bill review for medical care procured by plaintiffs. This includes cost projection, cost analysis and re-pricing. Allow us the opportunity to provide the information necessary to prove reasonable value versus collateral source.
Mitigation of Damages & Detailed Record Review
If you discover a leaky pipe in your home, you will not ignore it. Doing so, would cause further unnecessary harm and damage. Insurers will deny or exclude any harm that could have been prevented or mitigated. The same is true after an individual experiences a personal injury. The injured party has an obligation to mitigate damages by taking reasonable steps to minimize the loss caused by the defendant’s actions.
Is this always the case? As we explain below, the amount of compensation for pain and suffering is partially derived from the duration and cost of medical care. It seems counter-intuitive to explain to an injured party that they must take every step to recover, but their award will be based on the level of medical care received.
A detailed medical record review by a clinical expert can help in pointing out any inconsistencies in the plaintiff mitigating their own damages. If it is clear, by an expert review, that the injured individual did not do so, it can help in negotiating a proper settlement amount.
Special/General Damages and Expert Clinical Peer Review
These damages encompass almost everything factored in a settlement, except for punitive damages. General damages include items such as pain and suffering, while special damages encapsulate the amount spent for medical care, transportation costs and loss of wages. Special damages are much easier to calculate, given the exact dollar amount spent. The amount the parties agree upon for special damages are factored in determining the level of general damages.
Pain and suffering include both physical and emotional injuries suffered by an individual following an incident. The type and duration of medical care is very important when determining a dollar figure for pain and suffering. Ongoing physical therapy will be much more valuable than say an MRI. Some carriers will input the value of special damages into an application to provide figures for possible settlement. Others may apply a modifier to the original amount, say three to four times the damages, depending on the jurisdiction and landscape.
So, it is critical to ensure every tool is exhausted when determining the dollar amount of special damages. Was the duration and type of physical therapy provided reasonable and necessary? Our goal is to deliver solid, reliable clinical review services that contain costs and create the best possible experience for all stakeholders.
It is important to build a solid foundation when negotiating a claim resolution. UR Partner leverages technology, expert resources, and a focused approach in building that foundation. Our team is ready to analyze medical bills and records to provide an accurate picture regarding reasonable market values, appropriateness, and necessity of procured medical care and holding the plaintiff accountable to mitigating the loss. Please contact our team today to learn more.