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Why State Farm’s $30 million IME policy for MI auto accident victims is a joke

August 13, 2014 by Steven M. Gursten

Auto insurance companies shatter lives, cause enormous hardship and rake in profits by using IME doctors to cut off benefits and increase claim denials

State Farm, Delay, Deny, Defend

On Monday, I wrote about one particularly notorious IME doctor in Michigan, Dr. Manfred Greiffenstein, after a federal judge recently issued a blistering assessment of him, calling Dr. Greiffenstein “a very biased witness” and “especially lacking in credibility.”

Of course,  Dr. Greiffenstein and his partner and fellow IME doctor, Dr. John Baker – who another judge had previously called a “hired gun” – only represent the tip of a very ugly iceberg.

Today in nearly every serious automobile accident and workers comp claim, it’s common practice for people to be sent out for compulsory “second opinion” exams by an “independent” doctor that the side defending the case (and is responsible for paying compensation) gets to pick. These doctors are most often called  “IME doctors,” which stands for either an insurance medical exam, or independent medical exam.

The vast majority of the doctors who participate in these one-time exams at the behest of No Fault insurance companies, defense insurance attorneys and workers compensation carriers, all make staggering amounts of money. These doctors, who long ago turned their backs on their Hippocratic Oath to first do no harm, are too busy shattering the lives of people who desperately need lost wages and medical treatment from their insurance companies.

IME doctors are being used as a sword, not a shield – McKinsey & Company causes 177% spike in denials

The mistake that many judges and lawyers make is we think that these IME doctors are used as a shield by the insurance company defendants that select and hire them. They are used to mitigate damages claims and to rebut the opinions of treating doctors in automobile accident cases or workers compensation claims.

But the truth is, these IME doctors are being used aggressively as a sword, to preemptively attack meritorious claims.

IME doctors are being used early and often so that the insurance companies can avoid paying out what they otherwise should pay. Early and aggressive scheduling of IME doctor appointments by claims adjusters are being used more and more as a preemptive strategy to avoid paying for medical bills and wage loss that injured accident victims so desperately need.

Courtesy of an analysis of how some of these insurance companies can save millions of dollars performed by McKinsey and Company.

And in Michigan, where I practice law, no insurance company has been so aggressively using IME doctors as a tactic to avoid paying legitimate injury claims than State Farm. State Farm, of course, is one of Michigan’s largest No Fault auto insurance companies.

This new money-over-medicine IME policy that aggressively uses IME doctors like Greiffenstein and Baker puts an extra $30 million a year, approximately, into the auto insurer’s already big pockets. State Farm is shattering lives, violating its contractual and ethical obligations to its own customers, and laughing all the way to the bank by using IME doctors in Michigan as a sword, not a shield.

There are plenty more IME doctors out there just as bad as Dr. Greiffenstein – if not worse. Unfortunately, their lack of credibility and biases haven’t been so conspicuously identified and documented by a federal judge as  Dr. Greiffenstein’s.

The bigger problem is  how Michigan auto insurance companies, like State Farm, cynically misuse and abuse these so-called “independent” medical examinations to deliberately save money by cutting people off before they have to pay a lot of money on valid and legitimate accident claims.

Just like Allstate, with its use of the “Delay, Deny and Defend” strategy and  use of Colossus software to force “low-ball” settlement offers on auto accident cases, State Farm has used the services of the consulting firm McKinsey & Company to hatch a plan for making more money at the expense of its very own customers.

To read more about Allstate and Colossus, please check out Michigan Auto Law’s blog posts:

“Allstate’s sin No. 1: Using Colossus harm injured auto accident victims”

“Allstate’s sin No. 2: Targeting auto accident victims who had ‘audacity’ to hire an attorney”

By revamping its “Medical Management” practices, State Farm concluded – with McKinsey & Company’s guidance – it could reduce its claims payouts on auto accident cases – and, thus, increase its profits – on No Fault medical claims.

And this is where State Farm deliberately using IMEs aggressively, as a sword comes into play. At the very heart of this plan was State Farm’s aggressive use of these IMEs. State Farm implemented a new IME policy that all of its adjusters were required to follow:

  • IMEs are to be used as tools for settling Michigan No Fault claims.
  • IMEs had to be ordered earlier in cases.
  • IMEs had to be used more frequently in the handling of each auto accident claim.
  • IMEs should only be by pre-approved doctors who can be expected to disagree with the  diagnoses and treatment conclusions of  treating physicians and healthcare professionals.
  • Defense attorneys representing State Farm were to be told what IME doctor to use, what records to give to the IME doctor and what issues the IME doctor needs to address.

The results for State Farm – and the real-life suffering for Michigan auto accident victims – has been staggering:

  • The use of IMEs in the handling of No Fault claims is up as much as 90%.
  • Adjusters are routinely paying out on No Fault claims in accordance with what the IME doctors recommend – and, thus, ignoring the recommendations of the  treating doctors.
  • IME doctors are recommending less medical care and medical treatment than treating doctors.
  • Adjusters know nothing – or next to nothing – about the qualifications of the IME doctors on State Farm’s pre-approved list (except that they may be more reliably counted upon to cut-off people’s insurance benefits).
  • If an adjuster wants to pay out No Fault benefits, she or he must first get approval from a State Farm claims supervisor (turning the entire No Fault system on its head, and violating every principle upon which Michigan’s No Fault laws were enacted).

An accident victim is now forced to hire an attorney, file PIP lawsuit just to cover No Fault benefits that should already have been paid

Additionally, as a result of State Farm’s McKinsey-inspired IME policy, accident victims have been forced to file more No Fault PIP lawsuits against  insurers to get the insurance  benefits and medical care they need and are already entitled to. This simply clogs the courts, and, more importantly, creates a deterrent to people pursuing care they need and to which they are entitled because they now have to hire an attorney and bring a lawsuit. Many choose not to do this, and those that do now must bear the unnecessary added delay of litigation in the courts and have to pay an attorney fee just to receive the insurance benefits they should have recovered to start.

This is consistent with the fact that “cut-offs” and denials of No Fault insurance have increased 177% over the last 10 years. For more, please check out Michigan Auto Law’s blog post, “177% spike in denials, cut-offs by Michigan insurance companies will get worse under Gov. Snyder’s No Fault ‘reform.’”

Related Information:

Increasing profits at the expense of drivers: State Farm, Allstate and the McKinsey Report

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