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Medical Malpractice Insurance Companies Making A Killing

Brent Adams — Sun, 01 Feb 2009 20:59:48 GMT

The next time you hear someone talking about a “malpractice crisis” think about American Physicians Capital.

In a glowing feature article in the January 12, 2009 edition of Barron’s Business and Financial Weekly stock analysts had high praise for the malpractice insurance company and noted that: “it’s difficult to find any company more insulated from economic weakness than this one”.

In a time when most stocks have fallen by at least 50 percent, the stock in American Physicians Capital keeps rising.

From a $10.00 per share price in 2004, stock has risen to nearly $50.00 a share.

The article contained some interesting statistics which belies the claims of the insurance companies that there is a “malpractice crisis”.

The article notes that the company has cut claims in half compared with five years ago.

In interviews with the management of American Physicians Capital it was revealed that the company pays out on only 20 percent of the lawsuits filed. This is in keeping with the national statistics which show that patients only win one out of every five cases that actually go to court.

More significantly, the company noted that the size of the settlements has been trending significantly lower.

The company explains that part of the reasons that settlements are significantly lower is: “the new hard-line way we fight cases, and part of it is reform that has set damage caps”.

The chief executive of American Physicians Capital, Kevin Clinton, also claimed that the significantly lower settlements: “is also due to the way juries have stopped giving ridiculous billion dollar awards”.

The truth is, no insurance company has ever had to pay a billion dollar award in a medical malpractice case. Nevertheless, this type of rhetoric has given rise to what many of the public feel is a “malpractice crisis”.

Interestingly, the article notes that the company two years ago told its lawyers to stop accepting “court-house-step” settlement offers. The company felt that the settlements encouraged more claims from certain attorneys and that the new practice is one of the reasons that the claims have been cut in half compared with five years ago.

The company also has instituted formal training for doctors on how to improve communication with patients.

The company charges annual premiums depending upon the specialty involved between $200,000.00 and less than $20,000.00 per year.

The article did not indicate whether premiums have gone down since claims have been cut in half five years ago. There is a mention, however, of “what looks to be a temporary round of price cutting among local competitors”.

Before you shed crocodile tears for malpractice insurance companies who claim they are in the middle of a “malpractice crisis”, you should note that American Physicians Capital earns 16 percent on its total investment equity. Wouldn’t it be nice if we could go down to the bank and earn 16 percent on our savings account?

The article noted that the insurance company makes this high rate of return in part by handling claims strictly to minimize the payouts.

Originally posted at InjuryBoard by Brent Adams

In April of 1998 North Carolina State Bar Issued a Letter of Caution to Allstate

Brent Adams — Tue, 03 Feb 2009 08:47:26 GMT

In April of 1998 The North Carolina State Bar determined that Allstate Insurance Company engaged in the unauthorized practice of law when it sent a letter to motorists who have had accidents with Allstate policy holders.

As a result, the Authorized Practice Committee of the North Carolina State Bar issued a letter of caution to Allstate in April of 1998.

Since Allstate did not like the results of the State Bar action, it asked the Authorized Practice Committee to reconsider its letter of caution in October of 1998 after Allstate alleged that it revised its materials.

The Authorize Practice Committee of the North Carolina State Bar declined to to reconsider its decision and the letter of caution still stands.

As a result of the action of the North Carolina State Bar Allstate did change this tactic as it relates to communicating with personal injury claimants

The letter sent to individuals who may have claims against Allstate insurance policies, informs them that Allstate will help them determine whether they are “eligible to receive compensation for any injuries” they may have suffered. Allstate also offers “to discuss fair payment of your claim.”

The complaint against Allstate pointed out that the recipients get the misleading impression that Allstate is on their side and that there is no benefit in getting an attorney to help. In discussing the “fair payment of your claim” Allstate was offering assistance in the evaluation of a claim for an injured party.

The complaint stated further that the letter not only violated the practice of law but was a clear violation of the conflict of interest rules. Allstate’s interest was in not paying anything to the injured party. The interest of the injured party on the other hand is to recover as much as possible for his claim. Obviously, those two interests conflict with each other. It would be impossible for Allstate to protect the interest of the injured party and at the same time also protect the interest of its shareholders.

The State Bar agreed and took the appropriate action to stop the letters from being sent. Three other States, West Virginia, New York and New Jersey, have previously taken similar action against Allstate.

A 1994 study by the Insurance Research Council showed that people with lawyers on the average got three times more in a settlement.

If you or a love one are tempted to deal directly with an insurance claims adjuster concerning the settlement of a personal injury claim, please keep in mind that the adjuster is not acting in your best interest. The law requires that the adjuster protect the interest of the stockholder not yours.

Originally posted at InjuryBoard by Brent Adams

Another Tort Reform Phony Cashes In

Brent Adams — Mon, 28 Jul 2008 23:07:59 GMT

One of the more prominent tort reform advocates over the years has been Judge Robert H. Bork.

Judge Bork serviced as solicitor general and is acting Attorney General in the 1970s. He was later a federal appeals judge in Washington and was a strong contender for the United States Supreme Court. However, in 1987 the Senate failed to confirm his nomination to the Supreme Court.

Judge Bork has never been a friend of consumers especially those who have been victims of corporate abuse or wrongdoing.

Judge Bork recently settled his own million dollar slip and fall lawsuit.

Although the good judge was an outspoken proponent of tort reform which seeks to limit the rights of ordinary citizens to fair compensation, he did not hesitate to stick out his hand and cash in on the civil justice system he so strongly opposes.

In his complaint Judge Bork asked for punitive damages for the failure of the Yale Club to provide appropriate hand rails. In North Carolina such a complaint would barely get to the jury on the allegations of negligence. The punitive damages claim would be thrown out in a "New York minute". Surely, Judge Bork and his "silk stocking" lawyers knew that he did not have a legitimate punitive damages claim.

Could it be that Judge Bork filed a uhummm... frivolous lawsuit ?

Judge Bork’s lawsuit against the Yale Club arose after he fell stepping onto the platform to speak. The judge said that the Yale Club was negligent for not having stairs or a handrail leading up to the platform. He claimed that he suffered “excruciating pain” after he fell backwards as he tried to climb out of the dais and struck his left leg on the side of the dais and his head on a heat register. He underwent surgery and physical therapy and claims that he was left with a limp and is required to use a cane.

In defense of the lawsuit, the Yale Club said that Judge Bork was himself negligent because he failed to recognize the potential risk which the club said were “open, obvious and apparent.”

In North Carolina, because of our draconian contributory negligence rule, if Judge Bork was himself negligent, his case would be thrown out.

Some of Judge Bork’s ideological cohorts would say that Judge Bork did file a “frivolous lawsuit.”

Judge Bork has joined a long list of tort reform phonies including the current President Bush who condemn are civil justice system, but do not hesitate to use the system for their own self-interest.

Originally posted at InjuryBoard by Brent Adams

You Are Not In Good Hands With Allstate

Brent Adams — Sun, 18 May 2008 09:14:16 GMT

We have all heard the Allstate Insurance Company slogan which is: “You are in good hands with Allstate”.

Those of us who fight Allstate Insurance Company on a regular basis and our clients who seek adequate awards from Allstate Insurance Company know that an experience with Allstate Insurance Company is anything but “good”.

Throughout an 18-month investigation into minor impact-soft-Tissue injury collisions CNN found that if a person were injured in a minor accident, chances were high that Allstate would “challenge your medical claim, offering you barely a fraction of your expenses.”

One of Allstate’s former lawyers admitted that Allstate’s strategy is to make fighting the company “so expensive and so time-consuming that lawyers would start refusing to help clients.”

During the early ‘90s Allstate Insurance Company hired management consultant giant McKinsey & Co. to help Allstate increase its profits.

McKinsey & Co. came up with a scheme that significantly increased Allstate’s profits by means of shortchanging claimants who sought inadequate recovery from injuries sustained in minor motor vehicle collisions.

At the direction of McKinsey & Co. Allstate installed a new claims handling system called Claims Core Process Design (CCPD). This system was put into place in 1995.

The major emphasis of CCPD was to pay less on claims by using rigid standardized methods such as Fast Track, Colossus, minor impact-soft tissue referrals and special investigative unit referrals and by discouraging legal representation.

By the use of Colossus, Allstate took away from the in-the-field claims adjusters the discretion to set the value of a claim. I instead, the facts arising out of the claim were fed into a computer program named Colossus. Colossus spit out the value of the claim in a cookbook fashion. This is the amount that Allstate stuck to in its negotiations with injured claimants.

Because litigation is expensive, Allstate knew that by making low ball offers to the claimants chances were good that these beaten down claimants would settle their claim for a small fraction of its true value. These hard-pressed claimants simply did not have the wherewithal and stamina to fight their claims in court.

Unfortunately, Allstate tactics of discouraging attorneys to help injured victims in these low impact cases proved to be very profitable. Sadly, many lawyers who were willing to take minor impact cases before the new McKinsey procedures were instituted now refuse to help these injured parties because Allstate made it too expensive for these lawyers to handle the cases. These lawyers found that the chances of their making any profit on these cases were so slim that they refused to handle the cases.

Fortunately, there are dedicated plaintiffs lawyers who are willing to take these cases.

However, these scorch-the-earth defense tactics employed by not only Allstate Insurance Company but State Farm, Nationwide and many other insurance companies, have taken their toll on the unfortunate personal injury victims who now find it even more difficult to obtain an adequate recovery for their injuries.

Originally posted at InjuryBoard by Brent Adams

Experts Descend Upon ConAgra Plant in Garner, NC

Brent Adams — Wed, 10 Jun 2009 17:23:37 GMT

Industrial accidents are tragic. They are usually unnecessary and preventable. These tragedies are usually caused by defective products or negligence. They occur usually because the employers involved, and independent third party contractors and suppliers failed to take basic safety precautions to protect workers.

The most recent tragedy occurred yesterday in Garner, North Carolina when an explosion at the ConAgra Plant blew open the plant, killed at least 3 workers and sent 4 people to the Burn Center at Chapel Hill, North Carolina and hospitalized at least 38 others.

Experts from around the country have descended upon the little North Carolina town of Garner, North Carolina to investigate what happened.

Governmental agencies such as the US Chemical Safety Board, the agency charged with investigating industrial accidents are on the scene.

ConAgra Foods, Inc., the owner of the plant sent a team from Omaha, Nebraska to investigate.

Undoubtedly third party contractors and suppliers and their insurance company sent teams of experts in with a view towards finding evidence to extricate them from any potential liability for the tragedy.

The unfortunate workers, and the families of the 3 workers tragically killed will most likely not have a team of experts working for them. They are too much in shock to think clearly about how to protect their interest and keep incomes coming into the household to support their families.

You can be sure however, that the experts sent in by the insurance companies that insure ConAgra and any third party suppliers or contractors will be focused solely on how to protect themselves from claims which are sure to come from the victims and their families.

Of course, the injured employees and the families of the deceased employees are entitled to immediate workers’ compensation benefits. However, workers’ compensation benefits are extremely limited. Workers’ compensation insurance does not include payment for pain and suffering, punitive damages and other damages which have certainly been suffered by the employees and their families.

In order to recover more than basic workers compensation benefits, the employees will have to show that the conduct of the employer was substantially certain to cause injury or death. This is a heavy burden for these employees.

If the families can prove that third parties (individuals employed by entities other than ConAgra Foods) were responsible for the tragedy or that products supplied by third parties caused or contributed to the tragedy, the family would be entitled to full compensation for their losses.

It appears that 3 of the ConAgra employees died in the explosion: Barbara McLean Spears 43 of Dunn; Lewis Junior Watson 33 of Clayton; and Rachel Mae Poston-Pulley 67 of Clayton

Originally posted at InjuryBoard by Brent Adams

Fibromyalgia

Brent Adams — Fri, 06 Feb 2009 09:29:00 GMT

Fibromyalgia is a medical condition which is the subject of increased litigation in the areas of personal injury and worker’s compensation. Another actively litigated medical condition is myofascial pain syndrome.

Fibromyalgia is a syndrome which involves muscle and joint pain that is triggered by an accident or repetitive motion or stress.

Those who have the condition say that it can be extremely disabling. However, doctors can’t agree on what causes fibromyalgia, how to diagnosis or treat the condition and some doctors question whether the condition really exist.

As a consequence, in litigation involving fibromyalgia, settlement is hard to achieve and a high number of these cases have to be fully litigated. These trials many times involve an “all or nothing” situation in which the claimant either recovers a significantly large award, or is given very little and in some cases nothing.

Fibromyalgia has become one of the primary diagnoses that rheumatologist make. The American College of Rheumatology has defined the criteria for diagnosing fibromyalgia as follows:

- Pain in at least 11 out of 18 “trigger points” when they are subjected to light pressure, and

- Complaints of wide spread pain for at least 3 months in most areas of the body, including both left and right sides and above and below the waist.

Fibromyalgia is frequently accompanied by stiffness, sleeplessness, depression and bowel irritation.

Fibromyalgia is diagnosed 10 times more often in women than in men. Female suffers often tend to be somewhat overweight.

Fibromyalgia patients have no signs of abnormal muscle tissue, such as inflammation. They also test normally for problems such as arthritis, thyroid disease and lupus.

Treatment for fibromyalgia can include acupuncture or injection of saline or sucrose into the tender points in addition to physical therapy, aerobic exercises, and low dose anti-depressants.

Some doctors disagree on whether fibromyalgia is caused by trauma although many doctors feel that fibromyalgia is associated with neck and spinal trauma.

Studies have shown that fibromyalgia occurs 13 times more frequently following neck trauma.

Other doctors believe that a common cause of fibromyalgia involves environmental factors such as exposure to cold associated with repetitive motion and stress. One doctor even claims that there is a link between fibromyalgia and Nutra-Sweet.

Some claim that the diagnosis of fibromyalgia is a scam or a “catch-all” diagnosis that doctors use when they can’t find anything else or otherwise can not determine the cause of the patient’s problems.

Because the symptoms of fibromyalgia are largely subjective (that is, the symptoms depend upon statements by the patient rather than observable signs such as broken bones, swelling, etc.) they may be difficult to prove in court. The creditability of the patient is the key to a successful verdict for the injured party.

Great care should be taken to obtain an accurate history of the disease from the patient and those who know the patient and can attest to their observations of the patient over a long period of time.

The fact that fibromyalgia cases are difficult to prove should not discourage you from making a claim. Our marvelous jury system provides a mechanism for accurately weighing the merits of these cases and, in meritorious cases, the fibromyalgia victim can be adequately compensated if the case is tried properly.

Originally posted at InjuryBoard by Brent Adams

Insist on Collecting for Car Depreciation

Brent Adams — Wed, 25 Jul 2007 09:55:17 GMT

Insurance adjusters almost never volunteer to pay a car owner for depreciation to their car after it has been wrecked.

The depreciation occurs because of the simple fact that a car that has been involved in a collision is not worth as much as an otherwise identical car that has not been involved in a collision.

All other things being equal, a person is willing to pay more for a car that has never been wrecked.

Insurance adjusters try to limit payment on their claims for costs of repairs. Even at that, they try to force claimants to accept used parts or the cheaper off-brand parts when repairing their car. The disputes with insurance adjusters usually revolve around the type of parts to be used in repair and whether the insurance company will pay for the cost of painting the entire car or just the panels that have been damaged.

By focusing on the repair issues, insurance adjusters are able to side step a very important element of damage which most claimants miss.

The measure of damages for a car which has been in a collision is the difference between the fair market value of that car immediately prior to the collision and the fair market value of the car immediately after the collision.

The cost of repair is only one factor that the court will use to determine the measure of loss suffered by the car owner.

The law in North Carolina requires a seller of a car to disclose in writing if the car has been damaged to the extent of 25% of its fair market value before the damage. There are very stiff penalties for the failure of the seller to give this written notice to the buyer.

The seller, therefore, cannot hide the fact that the car being sold has been wrecked. When this disclosure is made to a perspective buyer, it drastically reduces the price the buyer is willing to pay for the car. This diminution of value is an element of damage which the car owner is entitled to recover.

When you are negotiating with an insurance adjuster about damage to your wrecked car, pickup, truck or van, be sure to insist on recovering for depreciation arising from the fact that the vehicle has been wrecked.

If you or a love one have a question regarding the depreciation value of your car depreciation, please contact us by filling out the form below.

Originally posted at InjuryBoard by Brent Adams

When You Are Disabled, Be Careful What You Say To The Insurance Claims Handler

Brent Adams — Mon, 30 Jun 2008 01:31:11 GMT

Eugene Andersons the dean of the claimant's disability insurance bar.

For many years, Mr. Anderson has fought diligently for the injured person and has won many battles on behalf of his clients against disability insurance companies who wrongfully deny benefits to their insureds.

In a recent article published for the insurance law section of the American Association for Justice, Mr. Anderson warned against the bias written into claims notes of conversations with disability insurance claimants. These claim notes are written to record conversations that disability insurance claims handlers have with disabled policy holders.

Mr. Anderson points out that while these notes may not always be totally false, they only tell half truths and are heavily slanted in the insurance company's favor by creating the false impression that the health condition of the disabled insured is much improved and that his disability has ended.

These claim notes, unfortunately, become part of the claims file which the courts construe as business records, giving them a sort of sacrosanct status.

The danger is that these notes may be viewed as the gospel truth by the court in determining whether a claimant is disabled.

That is why Mr. Anderson cautions the disabled insurer to be careful what they say to the claims handler and how their statements are phrased.

As an example, assume the policy holder tells the claims examiner that she has severe headaches in the morning. She says that she feels better once she gets up and about. The insurance company claims notes will reflect merely that the claimant feels better once she gets up and gets going in the morning. Thus, what appears on the claims notes for the court to see contain only half truths.

The woman may claim that she does not feel "up to" going to the doctor again. This will likely be recorded in the claims notes as "does not plan to seek further medical treatment." Her remark that she is too tired to go to the doctor becomes: "tired of going to the doctor." This statement again distorts the import and true meaning of the claimant's statements.

Mr. Anderson points out that insurance company claims personnel write notes that misconstrue the claimant's complaints and minimize their severity. Although the claims handler's notes in the claim files are not false, strictly speaking, they fail to give an accurate and complete picture of the claimant's health and well being. The notes accentuate the positive, but the positive is only half the truth.

Mr. Anderson notes that this accentuating the positive and downplaying or eliminating the negative may go on for a long time and in a variety of settings.

Insurance claim handler's conversations with the claimant's employer may skip over the negative in a way that portrays a disgruntled employee who should be busy at work, rather than at home, with complaints that others may perceive as minor aches and pains.

In later discussions with the claimant, the claims examiner reminds her of her earlier statements: "Didn't you tell us three months ago that you felt better in the morning?" The claimant, of course, does not recall this conversation that may have occurred a year earlier but responds "Yes." She does not challenge the previous conversation because she took no notes and does not remember. The claims examiner on the other hand, has notes which will be a prominent part of the court's file. Since the claims notes accentuate the positive and eliminated the negative that is all that the file now reflects.

This long series of conversations with the claims examiner in which he records only the positive and most favorable aspects of the claimant's health amounts to, in Mr. Anderson's word: "a long term cross–examination."

Eventually the claimant gives up and sues.

The insurance company then defends its denial of the claim on the basis of their claims record which was carefully crafted over a long period of time by a biased and nimble claims handler who has purposely distorted the record.

Before suit is even filed, the deck has been unfairly stacked against the claimant.

You should, therefore, be extremely careful what you say to the claims handler and realize that it is his job to build a claims file which will support a denial of your claim.

Originally posted at InjuryBoard by Brent Adams

Mortgage Lenders Order To Pay $99,000,000.00 In Punitive Damages

Brent Adams — Sun, 11 May 2008 14:19:28 GMT

Missouri residents who were charged illegal fees for second mortgages have been awarded $99,000,000.00 in punitive damages against three mortgage lenders for their misconduct.

The jury, sitting in state court in Jackson County, Missouri had previously found that these defendants owed the plaintiffs 5.1 million dollars in actual damages. The three defendants are Residential Funding Company LLC, Household Finance Corporation III and Wachovia Equity Servicing LLC.

The actual damages suffered by the plaintiffs as a result of the illegal conduct of the three mortgage companies occurred because the original lender had charged the victims excessive interest and illegal charges for origination fees, loan discount fees, underwriting fees, processing fees, document preparation fees, and legal fees.

The original lender who charged the illegal and excessive fees was Mortgage Capital Resources Corp.

The three mortgage companies listed above purchased these tainted loans from Mortgage Capital Resources Corp which is no longer in business. The former chief executive of the now defunct mortgage company is in prison for mortgage fraud.

The three mortgage companies who purchased the tainted loans defended the suit based upon their contention that they were entitled to rely upon assurances from Mortgage Capital Resources Corp that the loans fully complied with state law.

After the jury awarded 5.1 million in actual damages, in the first phase of the trial, came back to court to decide the issue of punitive damages in the second phase of the trial.

The State of Missouri has a set of laws known as the Second Mortgage Loan Act. Under this Act, many of the fees charged by the lenders were illegal.

The lawyers for the plaintiffs in this class action suit proved that the three mortgage companies knew of the lender's fraudulent conduct and "stepped into its shoes".

The case had been certified as a class action. Missouri residents who obtained second mortgages from Mortgage Capital Resources will be eligible to share in the damage Award. It is estimated that a total of 324 Missourians will qualify as members of the class.

Originally posted at InjuryBoard by Brent Adams

North Carolina May Cap Workers' Compensation for Retirees

Margaret Embry — Thu, 28 May 2009 16:12:05 GMT

As of May 11, 2009, the North Carolina House Insurance Committee advanced a measure that would limit workers' compensation payments to injured workers about six years after they become eligible for Social Security. House Bill 1022, according to Insurance Journal

would curtail workers' compensation payments 300 weeks after a worker turns 65 or otherwise becomes eligible for Social Security retirement benefits, unless the worker wins an appeal before a state board.

While opponents argue that the bill would negatively impact senior citizens, supporters of the bill believe the measure would cut costs for employers and make North Carolina more competitive.

The bill has been sent to the House Judiciary Committee by the insurance panel for further review. A companion bill, Senate Bill 975, was filed on March 25, 2009 and is currently before the Senate Commerce Committee.

North Carolina is not the first state to debate this issue. The Utah Supreme Court recently declared a state law that limited workers' compensation payments for people over age 65 who can also collect Social Security retirement benefits unconstitutional.

Originally posted at InjuryBoard by Margaret Embry