There is no doubt that insurers face the problem of insurance fraud. Quite correctly, they’ve banded together to use their considerable influence and clout to lobby state and Federal government to establish tough laws aimed at preventing or deterring such crimes. But, there’s an evil flip-side to this no-one’s discussing — that is the behavior of insurers in our civil courts and fraud by the insurers themselves.

Many states, including West Virginia (our case study), ban the mention of any insurer, for example, in personal injury or medical negligence cases, so jurors never know who the insurer is, but they all know there must be insurance, because they themselves are required by law to have it for their own homes or cars.

Ultimately, the behavior of the insurers leads to violations of the rights of the plaintiff in accident cases. The injured party, having been victimized by an accident is presumed by the insurer and attorney for the defendant, to be guilty of insurance fraud. Still worse, the plaintiff is compelled to undergo ‘independent’ medical examinations (IME) that are neither independent nor fair, and ultimately all funded by the insurance company in an attempt to deceive juries and the American people.

Defense Medical Exams

Paid for, directly or indirectly (via defense counsel), these IMEs are rarely, if ever, fair to the victim (plaintiff) and inevitably result in a report written for the Defense counsel that paints the plaintiff as a thief and criminal. Many of the doctors performing these examinations do little else, not treating ordinary patients, but simply conducting these exams and writing reports always favorable to the defense. These doctors are often paid thousands of dollars for a single 15 minute exam and are often rewarded with several thousand more for their trial testimony. A single Defense Medical Examiner (DME) can make millions and millions of dollars a year by throwing injured people under the bus, again.

The DME doctors prey upon the trusting nature of the accident victim, attempting to gain the trust of the individual, pretending as if there’s a doctor-patient relationship, including confidentiality that normally entails. There is no such confidentiality, and the American Medical Association guides (Rule 1030) that only a very limited relationship exists, so everything said to these doctors can, and likely will end up in their reports.

Those reports are rarely — if ever — truthful. Their purpose is establishing some statement that will impact a jury and paint the victim/plaintiff as a liar. Even when the defense admits fault, their sole purpose in obtaining these exams (as required by law), known as Rule 35 examinations, is to limit potential damages that may be awarded by the jury and prevent a fair recovery for the injured party.

One DME in Charleston claims of having conducted over 30,000 such exams. Can such a doctor truly be examining the victim or reporting their true condition fairly? There is absolutely no chance of fairness when that doctor is paid by one insurer between $2 and 3 Million annually. This raises the question: aren’t the insurer and defense attorneys guilty of insurance fraud, by paying for exams they know will be in their favor?

When the victim of an accident in the workplace or on the roads is victimized by the denial of legitimate benefits, the only winner is the insurer, who manages, through the law, to commit fraud and get away with the crime.

All too often, these exams rise to the level of conspiracy. So much so, that in New York, some years ago, the US Department of Justice conducted a RICO organized crime investigation into the manner in which they’re handled. To this day, district attorneys, state attorneys general and Federal prosecutors continue investigating “sham exams” conducted by exam mills – medical practices that do nothing but insurance exams.

In a recent conversation with a well respected plaintiff’s counselor in Charleston, he disclosed the reason why plaintiffs’ lawyers don’t push to close such exam mills. Ultimately, the doctors and their reports become so well known to the courts that they can often be challenged. But for every one that is challenged, many more succeed letting the insurer off the hook for the injuries caused in the accident.

What does this mean for the accident victim? Elimination of long-term care for one thing, which should be paid for by the insurance, but ends up paid by both the state and Federal government through Medicaid or Medicare. Yes, it impacts your tax bill. For another thing, these exams slow down the legal process, and factor into the backlog of the courts.

West Virginia is one of the nation’s leaders in the protection of medical privacy rights, yet these exams open up the records of the plaintiff to additional third-parties and effectively violate the rights of the individual that the courts endeavor to protect. HIPAA may be routinely violated and without proper oversight, the right of the individual to keep medical records private becomes a travesty. At the end of the day, the injured party is left humiliated, harassed, and forced to bear the burden of future medical costs, while the insurance company funding the whole matter escapes with record profits.

The time is come to put an end to insurance fraud… by the insurers and their medical examiners.  How can states fix this to make the process fair and equitable? Several changes to Rule 35 would help.

  • Mandate that the judge selects three doctors and allows both defense and plaintiff’s counsel to agree to one of the three. If they cannot agree in 10 business days, then the examining doctor is selected and exam is ordered at the discretion of the judge.
  • Each of the qualified doctors selected must be a regular medical practitioner, whose primary practice is treating patients, and who has not performed more than 18 IME exams in a single year (including civil court and workers’ compensation cases).
  • Limit the fees payable to the doctors to a maximum of $500, for the examination, and $250 for testimony in court.
  • Have the report delivered exclusively to the judge, not to counsel, with a gag-order preventing the doctor from speaking to either counsel outside of depositions.
  • Let the judge provide the attorneys the report, but give the judge the discretion to reject the report if he finds, for any reason, that it is false, misleading or fraudulent, or if the doctor has been disciplined by the Board of Medicine.
  • Have the court pay the fee, and let the court collect the fee from the parties as court costs.
  • Require doctors participating to report any and all payments to their practice by insurers for any purpose.
  • Make the reporting process by the doctors subject to perjury provisions of law, so that anything falsely written is an absolute act of perjury and punishable by civil and criminal penalties.
  • Establish penalties for doctors who breach Rule 35, and attempt to misuse the examination as a means to trick the individual into releasing additional information outside the scope of the exam. Create additional criminal and civil penalties for fraudulent reporting, with stiff fines and potential loss of license for violations.
  • Create a Court Examinations Charter of Rights, establishing information for those being examined, and requiring that the person attending the examination receive the Charter from their counsel, and that the Charter be displayed, prominently in the examining room.
  • Prohibit doctors from requesting that the individual release medical records to them.  All records should be released to the court only, and provided to the physician no less than 72 hours prior to the examination.
  • Create a set of standards for the examination process and reporting.

Based on the report of the court appointed examiner, defense counselors could still hire independent experts to evaluate the report and medical records obtained by the court.  Such experts could still testify, but their testimony as expert witnesses is limited to the evaluation of data and their opinion, avoiding any intimidation of the individual who was examined, or any insurance based fraud.

Lastly, states should establish a state-wide blanket medical records protective order, and require that all experts, insurance examiners, their staff, attorneys and their staff, or anyone else having access to any individual’s medical records be reported to and registered with the court, and subject to strict hefty fines and or possible imprisonment for violations of medical records exposing or endangering any citizen’s privacy.