The views expressed here are solely those of the authors and do not necessarily represent the views of FreightWaves or its affiliates. This is part two of a two-part series of articles focused on the current trucking insurance crisis. The first article, It’s time for less talk and more solutions to trucking insurance crisis, was published Jan. 17 and can be read here.
In one notable personal injury case, a medical provider billed more than $14,000 for a procedure that’s typically reimbursed by insurance at less than $400. Grossly inflated claims are costing the industry dearly and in some cases are driving trucking companies out of the marketplace because they can no longer afford insurance.
Part one of this series (“It’s time for less talk and more solutions to trucking insurance crisis”) described the financial vise that’s gripping the industry and outlined upstream measures operators can take to avoid these costs by reducing risk. In part two, the focus is on the critical need for changes in a “worst practices” system in which doctors and lawyers scheme to inflate costs.
How does this happen?
Commercial liability insurance rates continue to spiral, with costs passed through to businesses and consumers. A primary culprit is a corrupt personal injury legal system where attorneys drive medical care. In this unethical alliance, certain attorneys and medical providers maximize settlements using arbitrary, grossly exaggerated medical costs.
It starts when plaintiffs’ attorneys refer clients to defined medical networks in which damages are wildly inflated. While they may never take place, unnecessary surgeries are recommended to inflate the damages claims and then included in settlement demands. These procedures are then claimed to collectively cost hundreds of thousands of dollars more than the actual cost.
In this system, a claimant is instructed not to use health insurance or workers’ compensation insurance, which preclude attorneys and providers from claiming that the full inflated charge is owed. Instead, the covered individual is directed to a defined medical provider network that specializes in personal injury claims, i.e., one that will sidestep insurance. One medical provider was found to have testified more than 200 times at the request of the same law firm in less than four years.
A provider may accept insurance at contracted rates from other patients. But in a personal injury case, medical providers often sidestep those rates. The provider can then “charge” exorbitant amounts that oftentimes are more than 20 times the amount the provider actually gets paid for the services.
The bloated costs are used to leverage a settlement. While multimillion-dollar verdicts make headlines, abuse more frequently occurs in routine settlements under $1 million. These unwarranted settlements burden the system as much as, if not more than, the occasional extreme verdict.
Case in point
The trucking industry is being taken for a ride, and society is paying the price. Here is just one example:
In October 2015, a man named Joe Cantu was involved in a car accident in Austin, Texas. His lawyer referred him to the medical group Pain Care Physicians (PCP). PCP accepted Cantu’s United Health Care insurance. But he chose not to use it, allowing the provider to submit over $80,000 in excessive medical bills and claiming those were actual amounts owed. PCP charged $14,290 for a procedure for which expert testimony showed medical providers typically get paid less than $400. PCP also charged $3,893 for a back brace that’s available for $150 on the manufacturer’s website.
The defense asked for a copy of the United Health Care contract to reveal maximum rates that could be charged. But PCP fought to protect the secrecy of its contracted rates, and the matter went to the Texas Supreme Court.
While the court was considering a possible landmark decision, Cantu withdrew the claim for medical bills. With a pending ruling that could have jeopardized the scheme to inflate costs, the claim was dropped, and the Texas Supreme Court was forced to dismiss the appeal. As a result, the court did not get the opportunity to weigh in on this issue.
The Cantu case is an example of abuse that occurs every day and needlessly inflates claims and insurance costs for the trucking industry.
It’s time for a change
Given this sad state of affairs, how do we restore ethics, integrity and fairness to the judicial system? The answer is to advocate for legal and insurance industry changes. Truckers must tell their stories and enlist other fair-minded people in the effort.
- It’s time to pull the Band-Aid off the festering lawyer/doctor sore and expose it to the light of day. Attorney-provider relationships should be fully disclosed at trial. Juries must know whether the provider is part of a network that is incentivized to overcharge and overtreat.
- Jury awards should be based on objective standards, with contracted reimbursement rates heavily weighted in determining the reasonableness and amount of damages. State legislation should limit recovery of medical or healthcare expenses to the amount actually paid or incurred by the claimant.
- Claimants must be required to mitigate damages, as in any other legal matter. If a claimant has health insurance that would cover an injury, there is no reason he or she should be allowed to submit charges into evidence that are 10 times the amount allowed under the claimant’s insurance.
- The practice of litigation financing — the loaning of money to litigants or law firms by third-party lenders — should be regulated.
- Insurance companies must be willing to fight. Too often, the choice to settle a case is a business decision that has little to do with health outcomes or a company’s ongoing viability. The certainty of a settlement is considered preferable to the risk of losing at trial. This paves the way for even more lawsuit abuse.
Let’s take control
This article reflects our personal experience, which we know is replicated every day across the country. Plaintiffs’ attorneys have come to view trucking companies and their insurers as slot machines. They pollute the airwaves with an endless onslaught of inflammatory ads. Tragically, the industry is allowing the plaintiffs’ bar to sensationalize and distort a good story.
Ultimately, the cost of lawsuit abuse will be passed through to shippers and consumers. It’s time for the trucking industry to take the lead in righting these wrongs.
Brian Fielkow is CEO of Houston-based Jetco Delivery and executive vice president of Montreal-based The GTI Group. He is co-author of “Leading People Safely; How to Win on the Business Battlefield.” Fielkow received the National Safety Council’s Distinguished Service to Safety Award, the council’s highest-level individual recognition.
Robert Fuentes is a Texas attorney and founder of The Fuentes Firm P.C. He serves on the board of directors of the Texas Transportation Association and remains engaged in the Texas legislative process, advocating for reforms to protect against abusive litigation.
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CORVETT 1.😎
NEVER SPEED.SOME ROADS HAVE NO SPEED LIMIT SIGHNS
MOST TRUCK GPS HAS A BUILT IN SPEED LIMIT SIGHN ON YOUR SCREEN.GO BY THAT.BUT IF A AREA IS NOT UPDATED ON CHANGED SPEED LIMITS U CAN GET A FALSE READING.
IT HAPPENS.
Robert Barton
Hello Brain Fiellkow. Right on, your insight on Lawyers, Insurance, and rising costs to the public.The added value for the Attorneys, is Good for Attorneys. Question? Wouldn’t you think that, the millions of dollars, Spent on Advertising , be more practical, and interesting, of the focused on preventing , accidents, injuries and fatalities? And instead of promoting. Weasels, Whales,, Woodchucks Eagles, Ostriches, Fortune, Tellers,, Tigers and Dogs, the would be liked more if they sold safety. . Insurance sales are mandatory, mandated, a must have. Insurance costs s lot of money. And serious talk about safety, would be better received. We have a new truck driver daily dread eliminater, they will reduce injuries, and fatalities. 50,000 Serious injuries, and over 750 fatalities. Please see our rough animation. At **
shiutuptech@gmailcom. Please consider a small co- advertising campaign. Spread the word..
Terry
Let’s just go on strike& when law makers willingly to work for us then we move our trucks. Truckers are the life line of America; without us it wont be any food, water, buildings to made without. We need to strike for a year!
KING OF PAIN
SNOOKS & CROOKS IN THIS INDUSTRY.ALL COMPANIES NEED TO PAY HUB MILE.SHORT CHANGED EVERY DAY.S.L.I
M.E
☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠👁🇺🇸👁☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠☠
KING OF PAIN.☠☠☠
CROOKS & SNOOKS IN THIS TRUCKING INDUSTRY.TRUCKING COMPANIES WILL RIP U OFF AND NOT THINK TWICE ABOUT IT.
Rob Dean
Most trucking companies settle these frivolous lawsuits out of court to protect their financial interests, as well as their customer base. I worked as a company driver for a large, well known regional carrier for14 years. The ambulance chasing billboard attorneys see tricking companies as a cash cow. Case in point, a fellow company driver out of the terminal I was domiciled at, was rear ended by a drunk driver while he was sitting st a stop light. The drunk was charged with DUI and convicted of 3rd offense DUI. He obtained a lawyer and sued the company for $ 2.5 million. Our company settled out of court for $ 750,000.00. This was done to prevent “bad publicity ” and the case never went to court. This crap has got to stop !!!
INVESTIGATOR.
MAKES NO SENSE.PICTURE IS DARK ON THIS..ARE U SHURE ABOUT THIS.SHOULD BE THE OTHER WAY AROUND.
Bigdee
Didn’t the insurance industry and the ATA say that the accidents would go down with the eld law going into effect there is not to much stuff that scare me but when I hear 20 plus year truckers say that they don’t feel safe under the wheel and even say that this eld and technology stuff have made them do unsafe stuff wow I don’t know what to say it’s just as stupid as yesterday I was short minutes to make it to base and I can’t go to base with out taking a 10 hour break and remember I have to find parking that do not forward my load so I have to go 20 miles backwards and lose that fuel and mess up the environment by burning more fuel so I better be in a rush in that situation who wants to spend a 10 hour break 20 minutes from home not me but politician think that’s a good ideal
Mike
Exactly, that is what I was running into, and the only solution more than a few times was to speed, and I did. That right there is enough, I have a clean driving record, and the last thing I want is a ticket, or worse, to kill someone. The truck is parked, I am not going to, nor can I operate like this. It goes against everything I was ever taught and know, it is too dangerous out here and I am no longer playing this game.
Mike
This is an industry problem, a TOTALY OUT OF CONTROL INDUSTRY PROBLEM!
Drivers and owner operators that have been out here any length of time have been screaming it for years, and no one listens, they just heap more regulations on the guys in the cabs.
They think they found the ultimate fix, by putting a damn STOP WATCH on the dash! What the HELL did they think would happen? LMAO!!!! Look at the numbers, since 2018 crashes are up, and continue to go up! My agent called me last November and warned me ahead of time that my insurance was set to go up anywhere from 30% to 100%. I was like WTF? I have a clean driving record, never an accident or claim, and have been with you folks for over 20 years!
She stated that there are only two or three insurance underwriters out there, accidents are through the roof, repairs and truck replacements are to costly and then she mentioned the outrageous lawsuit.
I cancelled my policy a few days later after calling around to only find even higher rates. I parked the authority and went and leased on to a carrier. Now I am parked. I am done, had it with this BS.
Face it, we have boneheads in charge, folks that have never been in a truck, much less worked in the industry making rules and laws that they pull out of their asses wholesale. We are never listened to, NEVER.
Then they import drivers from the third world, and hand out operating authority like it is candy on Halloween for God’s sake. These folks bring their third world driving habits with them, along with all of their buddies, they are all on a 1099 and few if any even speak or read English! Someone tell me this is good for the health of the trucking industry. If you are a shipper, it is fantastic, as you can essentially have your freight hauled for less than what it cost in 1990. You are loving this.
This industry has gone insane, totally INSANE!
I am done, truck is parked, found a real job that does not require a stopwatch and pays a real hourly wage.
Good luck guys and gals.
Joseph S York
The problem is insurance company I had a driver backing up in a parking spot and was told he hit the truck beside him he ran over the plastic bumper corner which was in the spot…the truck it come off from had no damage to braces that hold on the plastic cornner. The driver said he was hit so hard it toss him and his girlfriend out of the bunch and he hurt his back and she pull a leg muscle. The insurance company never listen to me or the cop or pictures just paided it and made my insurance go why up so I change insurance but didn’t matter I took it to court and clear my driver of no wrong doing. It didn’t matter
777🕹🎰🕹🎲
U DID NOT USE G.O.A.L.WAIT UNTILL THE ASS HOLE SLAMS IT INTO REVERSE AND HITS U.MAKES U LOOK LIKE U HIT HIM.I MADE HIM SHOW ME HIS DRIVERS LICENSE AND GOT INFO.A TRUE EVENT.
Elvis Durant
You dead on here. I shut down 2 months ago. Not even worth the headache of having a CDL anymore. You risking your life out there on the roads and this is the payback? The hell with trucking!
Miguel Ramirez
I agree !!!!!! Imagine u did not have any claims or bad record! I had one claim an it Sims that they retaliate against me my primium went up after a mouth. You know how much I was paying a mouth
$3,200 with my own authority , truck an trailer with
Progressive 12×3,200= you do the math started in 2017 an went out off business 12/2019 one truck an trailer.rates an working with brokers insurance companies and brokers both of them together ended up breaking my company greedy on the broker side rates went down four fold and the insurance company because I had a couple of stains in my record just put me out of business. There is no doubt in my mind that people sitting in Congress have no idea of what’s going on in the trucking business. And lack information. It’s getting worse and worse and worse every year I had to lease my truck because the insurance on a bobtail is much cheaper than having your own authority The American dream is gone if you’re in the trucking business.
MEGA MILLIONS WINNER😂.
PAY PROFFESSIONAL DRIVER’S 22 DOLLARS PER HOUR.PAY ALL.OTR DRIVERS 75 CENTS PER MILE WEATHER 1 YEAR OR 10 YEARS DRIVING.MAKE IT A FEDERAL LAW TO PAY THESE WAGES.5 DOLLARS PER HOUR ON WALL MART LOADS,WHILE THE MOTHER GOOSE LAYS THE GOLDEN EGG EVERY DAY.
FIRST AMERICAN.
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