By: 3 December 2016
The curious case of MedCo

Ever since the Government launched its medical reporting portal for low value personal injury claims in motor accidents, it has been dogged by controversy. Will it be able to save its tarnished reputation?

Back in May, Lord Faulks, the then Minister of State for Justice, gave a speech at the Association of Personal Injury Lawyers’ (APIL) conference during which he praised MedCo.

“The Government is pleased with the work of MedCo one year in,” he said. He praised the fact that the portal had broken the financial links between solicitors and medical reporting organisations (MROs), and hailed the incoming accreditation process for medical experts, which he said would improve the quality of medical reports.

Faulks also made it clear that the Government would make sure that the practice of registering multiple so-called shell MROs onto the system by the largest players in the market – in order to try and get around the loss of business caused by MedCo’s randomisation – would be stopped.

Sure enough, on 8 November, MedCo announced that it had kicked 134 Tier 2-registered shell companies off the portal as they did not meet the basic new qualifying criteria for an MRO.

But how did it get to a point where the Government had to take such action?

Unintended consequences

“Random allocation was a good idea in theory, but it needed testing,” says Andrew Twambley, the director of InjuryLawyers4U.

He argues that Chris Grayling, the Justice Secretary at the time, pushed MedCo through without any real thought of the consequences. This led to two main issues.

“It encouraged any Tom, Dick and Harry to form a tier 2 MRO above a kebab shop and offer a free taxi ride [to go with it]. These outfits had no idea and were dodgy in the extreme. It was impossible to agree terms and they had zero service standards,” says Twambley.

Secondly, he says, the top MROs were looking at potential decimation. “These companies had set up years ago and had specialist, highly-geared organisations. They were never going to sit back and take the pain. Their fightback was inevitable.”

Following MedCo’s installment in April 2015, Claims Media spoke to one of those top MROs, Speed Medical. The company’s commercial director, Chris Chatterton, told Claims Media that the MRO’s worst fears had been realised and that its volumes had been drastically reduced.

“We’re very concerned,” he said at the time. “It is fundamentally anti-competitive.”

To counter its drastic loss of business, Speed Medical admitted to setting up multiple entries on the portal, which went live in mid-May 2015.

“This is essentially an attempt to pull back our market share, lost through no fault of our own,” said Chatterton. “Many solicitors want to work with us because we provide a great service and so this enables this to happen. If Medco was working correctly there would be no need for the additional agencies.”

Role of the board

But it is not only the basic structure of MedCo being problematic for many in the PI sector. The governance of the portal has also been questioned.

According to David Pearce, a director at Tier 2 MRO Citimedical, there has to, at least, be a perception that the shell companies were not dealt with sooner because certain members of the board had “total and complete” conflicts of interest. He said that the large MROs have both representatives on the board and “sympathetic solicitors and insurers” who used and benefited from the shell companies.

“Its like a board member of the Vegan Society declaring that he is opening up a butcher’s shop,” says Pearce. “No other board would tolerate that, and he would be asked to step down with immediate effect.”

Pearce argues that the MedCo board should be made up of wholly independent accountants, lawyers and other officials. Included in this would be an outlet whereby stakeholder groups can make representations to the board.

“It is outrageous that anyone with a commercial interest in the sector sits as a director on the board, and that includes the insurers, PI lawyers and MRO representatives,” he adds.

One of those board members is Nigel Teasdale, the new President of the Forum of Insurance Lawyers (FOIL) and a partner at DWF. He says that it unfair to point the finger at him and his fellow board members.

“We hear the criticism, but it’s not necessarily a core function of MedCo to be regulating the MRO industry. The aim of MedCo is to try and improve the quality of Medico-legal reporting,” says Teasdale.

“I don’t think MedCo was set up as a body to regulate market share.”

Having said that, he points out that even before the ejection of the shell companies, the board did take action where it could against those who were “subverting the process”.

“There have been a number of audits and suspensions. So we will take steps where we can to deal with companies that are found to be breaching the user agreement.”

He also points out that the board is dealing with a section of the PI market that does not always do what it is told by Government.

“At the moment the shell companies are just one manifestation of how companies try to subvert randomisation,” he says.

“I think it’s almost symptomatic of what the industry is like. This should have been a relatively straightforward body set up based on agreement of the vast majority of the industry to look at the MedCo process which would try and improve the quality of medico-legal evidence. And the efforts to challenge and circumvent what should have been a straightforward process are quite startling.

“The industry’s first thought in respect of any reform is how can I challenge it? The second thought is how can I circumvent it?”

Is MedCo working?

The issue with the shell companies, and the other problems created by randomisation, highlighted by Twambley, have led people to ask whether the portal is actually fit for purpose.

Donna Scully, a partner at Carpenters, says that one of the reasons that MedCo has had such teething problems, is that it was flawed in its initial design, which allowed parties to exploit its operation. However, she believes it should be given time to work its way through its problems.

“If allowed to evolve and improve, MedCo does have the potential in the long-run to deliver improved medical reports,” she says.

“The MoJ should learn from this experience and future reforms must have genuine
consultation, a full impact assessment, and an informed consideration of unintended consequences.”

Pearce, however, believes that MedCo is actually working – if you put the the shell company fiasco to one side.

“The fragmentation of the market is reducing financial incentives,” he says. “It has also led to MROs and experts being less subservient to the large providers of work and we see more of the smaller MROs standing up for robust experts.

“Also, the myth that smaller MROs cant deliver a high quality service has been blown apart as many audits are now showing that the service and SLAs being delivered by the Tier 2 MRO are consistently higher than the big AMRO members.”

Falling standards?

Pearce’s comments about service come following a report – An assessment of the market for Personal Injury ­– published in October by the Solicitors Regulation Authority (SRA), which revealed that many solicitors have concerns about the quality of medical reporting following the introduction of MedCo.

The report found that solicitors were receiving reports that lack important information. Complaints included less evidence of both a thorough review of records, and the factual circumstances of an accident that led to an injury. What’s more, some solicitors interviewed for the report said that they were not confident that adequate medical examinations had actually taken place.

“Many interviewees provided anecdotal evidence of copy and paste reports, meaningless prefabricated descriptions of injuries (for example, ‘moderate to severe’) or rushed consultations with factual errors,” said the report.

“The poorer quality medical reports were largely attributed to the standardisation process, increased use of ‘drop-down lists’ and reduced fees for medical experts. The reduced fees in particular were seen as the driver of poorer quality reports. Some interviewees suggested that the medical experts were now paid too little and were producing poorer quality reports as a result.”

Another problem identified by the report is the exodus that took place following MedCo’s introduction. Several respondents suggested that prior to the introduction of the portal, the best reports came from doctors who wrote the reports on the side and had regular day jobs as GPs.

“The accreditation system, however, combined with the focus on efficiency has meant that more experienced doctors exited the system due to pressures on scale and cost: it made more sense for doctors who primarily write reports to be accredited under MedCo,” said the SRA.

The accreditation conundrum

Giles Eyre, a barrister and author of Writing medico-legal reports in civil claims, says that there is no way of guaranteeing a future rise in the standard of reporting, given that the accreditation process appears to be shrouded in secrecy.

“My queries about the MedCo accreditation process have been stonewalled despite a number of emails to MedCo and MoJ, dating back to November last year,” he says.

“I sought clarification as to what the training and accreditation means, and what reliance a lawyer, and in the final resort, a judge, can place on it as indicative of quality and content. I cannot see how it can be objectionable to share that information.”

What is known about the accreditation process is that an expert receives 30 to 40 hours of online information and answers some questions on the material they have read. The information covers nine modules: An introduction to whiplash associated disorder (WAD), occupant kinematics, assessment and investigations, symptoms of WAD/effects on ADL, treatment, WAD recovery and prognostic factors, chronic pain, law and procedure, and good medical practice and medical experts.

Added to that are five core areas of knowledge: professional obligations, medical history, clinical examination, model medico legal examination and report and legal content.

However, as Eyre points out, there is much that is shrouded in a strange cloak of secrecy. Solicitors and clients not know what the content of these modules and core areas are, or what the accreditation actually means. Added to that is the omertà surrounding what core competencies experts are expected to achieve, and how those are tested.

Without any transparency, says Eyre, what validity does the accreditation actually have?

“There’s also a slightly sinister thing here, which is that there is more than one view on what whiplash is,” he warns.

“And I don’t know what they’re being taught and nor does anyone else. So when an injured person goes to a solicitor then what happens if experts have been taught that it’s all whinging and nothing lasts for more than six weeks – which is what you suspect might be the gloss that is provided over it?”

MedCo’s ability to deliver a good service to injured people and their solicitors may now become a moot point with the looming threat of the Government’s latest proposals on whiplash reform.

If, however, it manages to avoid being dumped into the ignominious groaning pile of failed Government IT projects, then it will need to make sure that the mistakes of its past stay there. For the sake of everyone’s collective sanity, if nothing else.