The opinions shared in this article belong solely to the authors and do not necessarily reflect the views of FreightWaves or its associates. This is the second installment of a two-part series on the ongoing trucking insurance crisis. The first article, titled “It’s time for less talk and more solutions to trucking insurance crisis,” was published on January 17 and is available for reading here.
In a notable case of personal injury, a medical provider issued a bill exceeding $14,000 for a procedure that typically receives less than $400 in insurance reimbursement. Such significantly inflated claims are causing substantial financial strain on the trucking industry and, in some instances, forcing companies out of business as they struggle to afford insurance premiums.
The first part of this series discussed the financial pressure facing the industry and offered strategies for operators to mitigate these costs by minimizing risk. The current article emphasizes the urgent need for reform in a “worst practices” environment where medical providers and lawyers conspire to inflate costs.
Understanding the Problem
Commercial liability insurance rates are continuously rising, with businesses and consumers bearing the brunt of these costs. A major factor is a flawed personal injury legal system where lawyers influence medical expenses. This unethical partnership allows certain attorneys and medical providers to significantly inflate settlements by overstating medical costs.
The problem begins when plaintiffs’ attorneys steer clients toward specific medical networks that escalate damage claims. Even when unnecessary surgeries are suggested, these are factored into settlement demands, which are dramatically inflated. Claimants are often advised against using health or workers’ compensation insurance, which would prevent attorneys and providers from asserting that the inflated amounts are owed. Instead, they direct claimants to specialized medical providers who avoid standard insurance processes.
A Real-World Example
The trucking sector is bearing the brunt of these practices, with society experiencing the consequences. For instance:
In October 2015, Joe Cantu was involved in a car accident in Austin, Texas. His lawyer sent him to Pain Care Physicians (PCP), which accepted his United Health Care insurance. However, he opted not to use it, leading to PCP billing over $80,000 in inflated medical expenses, claiming these as actual costs. For example, PCP charged over $14,000 for a procedure that typically costs under $400, and also billed $3,893 for a back brace that can be bought online for $150.
When the defense sought to examine the United Health Care contract for maximum allowable charges, PCP resisted, resulting in a legal battle that reached the Texas Supreme Court. Ultimately, Cantu withdrew his claim before the court could make a potentially pivotal ruling on the matter, preventing any legal scrutiny of these practices.
Call for Reform
In light of these troubling circumstances, it’s imperative to restore ethics and fairness in the judicial system. Advocacy for changes in both the legal and insurance sectors is essential. Truckers must share their experiences and rally support for this cause.
It’s time to expose the unethical attorney-provider relationships in the courtroom. Jurors should be made aware of whether medical providers are part of networks that encourage overcharging and overtreatment. Awards should hinge on objective standards, primarily focused on contracted reimbursement rates. State laws should restrict the recovery of medical costs to what was actually incurred, and claimants should be expected to mitigate damages. The practice of litigation financing should also face regulation to prevent exploitation. Insurance companies must adopt a more assertive stance against settlements that prioritize expediency over fairness.
Taking Control
This situation reflects widespread experiences across the nation. Plaintiffs’ lawyers increasingly view trucking companies and their insurers as easy targets. Their relentless advertisements further exacerbate the issues facing the industry.
Ultimately, the costs associated with exploitative lawsuits will be passed onto shippers and consumers. The trucking industry must take action to rectify these injustices.
Brian Fielkow is the CEO of Jetco Delivery in Houston and the executive vice president of The GTI Group based in Montreal. He is the co-author of “Leading People Safely; How to Win on the Business Battlefield.” Fielkow has received the National Safety Council’s Distinguished Service to Safety Award, its highest honor.
Robert Fuentes is a Texas attorney and founder of The Fuentes Firm P.C. He serves on the board of the Texas Transportation Association and actively advocates for legislative reforms to combat abusive litigation practices.
