Negotiating with Computers | Part 5

by | May 17, 2023 | Negotiating with Computers

Doubling Case Value with Permanent Impairments

Did you know that nearly every client within your firm likely qualifies for an impairment rating of at least 2%? Did you also know that by simply have an impairment rating, you may realistically increase the settlement value by 100%?

The Problem Affecting Injury Attorneys

Since starting Demand Drafter, the surprising thing we have found is how few attorneys have their clients undergo a permanent impairment evaluation. Any claimant who has suffered physical injuries as a result of a personal injury accident should, at the very least, be considered for an impairment evaluation.

A Quick Recap of How Colossus Calculates Value

Remember from Part 1 of this series that Colossus calculates settlement value based on what is entered into the program. This includes items such as the injury codes, type of treatment, impairment rating, and duties under duress. If these value drivers are not entered into Colossus, the insurance companies treat them as if they never occurred. This results in money being left on the negotiating table.

When a value drive is entered into Colossus, the piece of information has a specific number of points pre-assigned to it. As an example, an ICD code for a herniated disc is worth more points than one for lumbago.

Based on the totality of what is entered, Colossus then assigns a dollar value per point. Add up the value of the points, subtract 25-35%, and you end up with a settlement range the adjuster is allowed to settle the case within.

How Does an Impairment Rating Affect Case Value?

A permanent impairment rating is a secret key to unlocking settlement potential within Colossus. This is because Colossus will not give value to loss of enjoyment of life value drivers unless there is a permanent impairment rating entered into the program.

Without an impairment rating, not only will Colossus fail to give value to the fact that your client has a permanent disability, but the program will also not assign value to loss of enjoyment of life. This is how an impairment rating can increase the value of the case by 100%.

As the adjuster is inputting different value drivers into Colossus, pop-up windows will come up and ask for additional information. For example, any mention of a difficulty with a household task (duties under duress), will require the adjuster to also enter the level of difficulty and length of the duress.

In order for the adjuster to get to the part of the program that allows for entry of loss of enjoyment of life drivers, a permanent impairment rating must be entered first. If there is no impairment rating, the adjuster will never see that part of the program and will move on without that information being entered.

What Is an Impairment Rating?

The AMA definition for impairment “[t]he loss of, loss of use of, or derangement of any body part, system, or function.” AMA Guides, 3rd Edition. It is important to not confuse permanent impairment with a disability. Impairment is simply the medical assessment, while it is best to think of disability as the ways in which a person’s life is affected by the impairment (i.e. duties under duress and loss of enjoyment of life).

Colossus does not have the ability to calculate an impairment rating. It must rely on what is inputted by the adjuster, which will come from the records. In order for an adjuster to enter the rating into Colossus, the assessment must have been completed by a qualified medical physician. They will not enter one performed by a chiropractor, D.O. (usually), or a physical therapist.

An impairment rating, even one of only 2 or 3%, carries the greatest number of severity points with it than any other value driver. Only the diagnosis will carry more value. Even in a small case, it is not unreasonable to expect an insurer to place $5-10,000 on a whole-person impairment rating of 2-3%. A larger rating may double the value of the case in the right circumstances.

If your client has truly been injured by the accident, a qualified doctor should not have difficulty arriving at a 2% whole-person impairment rating.

Pre-Existing Permanent Impairment

Colossus requires the entry of two permanent impairment ratings. One for before the accident and one for after. If your client has never received an impairment rating prior to the accident, the adjuster will simply enter 0%.

If your client has received an impairment rating before the accident, it is imperative to have them receive a new rating to prove the significance of the new injuries. This will also help fend off arguments that your client has pre-existing injuries that necessitated some of the treatment you are claiming is related to the accident.

If there are pre and post-ratings, Colossus takes the easy way out and simply subtracts the two numbers. This resulting number will be what it bases the number of severity points assigned. This is a medically inaccurate method to view the new impairment. You should have the physician spend a great deal of time documenting the extent of the disability pre and post-accident to increase the severity points in those categories.

It has been reported that before an adjuster will consider an impairment rating, the claimant’s injury must be stable and/or static. It is our experience at InjuryIQ this is not entirely true for complex and serious injuries that will never fully heal. We have had insurers accept an impairment rating even though the patient was continuing conservative treatment following surgery. It is best to wait until they reach maximum medical improvement unless you have a statute of limitations issue.

Diagnosis Related Estimates

One way in which a physician is able to calculate an impairment rating consistent with the AMA guidelines is to rely on the diagnosis. This method involves assessing the patient’s condition based on the injuries suffered and objective findings, including muscle spasms, imaging studies, loss of range of motion, and neurological changes.

You can find several physicians online who will perform this service remotely and is a great option for lower value cases…if you have well-documented medical records. Typically, they will charge between $500 and $1,000 and you will simply need to e-deliver them the records and bills. This is an absolute no-brainer as you may see a 100% increase in the value of the claim as a result of the impairment rating.

Wrap Up

You may be thinking all of this only applies to your catastrophic injury cases. While an impairment rating will be greater in those cases and thus carry more value, even your soft-tissue injury clients qualify for at least a 2-3% impairment rating. It is realistic to expect at least $5,000 in additional value being placed on the claim in soft-tissue cases.

This is why it is clearly worth your team’s time to make a call to your client and connect them with a doctor who can perform the evaluation.

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