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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Peter young
Its silly how trucking companies complain about high cost insurance much money they currently stealing from drivers. A little touch of karma is something else.
Jerry
We need legislation that is for us, the owner operators. There are 2 major factors that affect us, insurance and diesel prices. We need help with this situation. I have been a trucker for over 30 years. Everyday the situation keeps getting worse. I hope that you can give us a hand with these problems. We are hard working men of valor and are dedicated in everything that we do.
Thank you.
Noble1
Novacap should divest from the “carrier” industry . Sell GTI & Jetco to , ie: TFI International . Why break your head with these headaches ? Not worth it . Invest in autonomous tech instead .
Give Plus.ai a look
In my humble opinion …….
Noble1
Don’t be a victim of the proverb : hindsight is 20/20 in 2020 , LOL !
You’re suppose to be forward thinkers . So apply forward looking !
Novacap Quote:
“We work in an entrepreneurial environment where individuality, original thinking and teamwork are highly recognized. ”
Autonomous tech is “original thinking” .They are driving innovation in this industry . You should “recognize” this .
In my humble opinion …………
Noble1
Never 2 without 3 , so here is lucky number 3 .
This comment is to tease Novacap a little .
Rather than hold GTI with these nuclear verdict risks , I would divest from it and take a very close look at Mason Graphite since it appears to be breaking out of its “orphan period” in the cycle . Aside from timing there are some interesting characters behind it , Very interesting characters indeed .
Do your due diligence , past performance isn’t indicative of future performance , enormous risks are involved , bla . bla , bla
In my humble opinion …………
David Smith
We see a countless number of lawyer commercials on tv claiming a track record of winning millions of dollars against trucking companies. This has an adverse effect on the public because it has caused some to stage accidents with trucks , even risking their lives to do so. We need legislation against this abuse to keep our drivers on the road moving goods for America.
Brian
One day soon I hope truck drivers will stand together and strike. Unfornutatley, that will probably never happen. It will take a dramatic move to show and create a better future for drivers. Thank you truck driver for allowing me to put gas in my car. Thank you truck driver for allowing me to conveniently go to the store to pick up my groceries. Thank you truck driver for delivering the supplies we need to build our homes and businesses. People have no idea the impact it would be if EVERY TRUCK stopped for a mere week. Let’s stand together and bring brother and sisterhood back to this industry. Bring the respect to each other back, the commradery. Once again THANK.YOU.COMMERCIAL DRIVER!
David Smith
👍🏾
Hoj
I Have a Dream!!
Many times I wonder what it’s going to take for our industry to garner the respect typically so readily provided to people who work almost all other industries. From unscrupulous brokers, extremely slow shippers and receivers, burdensome overreaching and uneducated federal government bureaucrats, overly zealous and aggressive law enforcement officials, stolen trucking tax revenue meant for maintaining or upgrading highway infrastructure that’s fallen into great disrepair along with their obvious failure to do a damned thing about delivering on promised resolutions regarding the obscene lack of adequate safe truck parking areas, to every undeserving moron with a driver’s licenses, including many CDL holders, who, devoid of any form of common courtesy and common sense, possess absolutely no regard for the wellbeing and safety of others on the road, and on and on ithe list goes. I’d love to witness the reaction of the impact on all that simply take us for granted and abuse us if the trucking industry were to shutdown for a week. Maybe, then, people would come to understand and appreciate just how important we are to almost every aspect of their lives and begin treat us accordingly once again. In honor of MLK I’ll titled this comment “I have a dream”!!
George C Reich
Well I guess if truck drivers didn’t kill people maybe you don’t need attorneys
David Smith
Yes don’t forget people those good drivers who pullout in front of trucks as well.
Leah
This article is true. I refuse to listen to the advertisement by one particular attorney’s on 105.7 in the Dallas / Fort Worth are because all they do is talk about hiring them for truck wrecks. They are attempting to tone down there rhetoric by briefly mentioning they deal with car wrecks, also. But, the truck drivers know very well that it’s the truck wrecks which fill there “coffers”. And, it effects everyone in transportation.
Jaime
A Car,Having an Accident with a Semitruck is like Hitting the Jackpot. for the Car Driver And Their Corrupt Lawyers !!
Ramon Garcia
8 times out of 10 it’s the car that is at fault..I drive a truck also and almost every time a car will cut in front or won’t use their blinker. But know matter what it’s the truck driver who is at fault…