Michigan’s no-fault automobile insurance coverage provides unlimited medical and rehabilitation benefits to injured claimants under the Personal Injury Protection (PIP) coverage selection. This limitless PIP benefit has long been a source of contention and a major driver of claims costs for insurance carriers.
According to the Crash Report from the Michigan State Police, the number of automobile crashes in the state of Michigan in 2014 totaled more than 298,000. Of the automobile crashes that year, approximately 52,523 had injuries associated with them. Within those crashes involving some form of injury, 16,300 involved injuries that were apparent at the time of the crash but were non-incapacitating to the injured party. In 2014, more than 4,900 injuries were considered to be incapacitating injuries.
Both incapacitating and non-incapacitating injuries represent significant costs to insurers, but incapacitating injuries by nature represent higher costs over a longer period of time. A 2011 study of Michigan’s auto no-fault insurance commissioned by the Michigan Chamber of Commerce compiled data on the cost of catastrophic, or incapacitating, injury costs. As of 2009, Michigan’s average no-fault claim costs were almost four times higher than the average no-fault claim cost in other states also providing no-fault insurance coverage. While these catastrophic claims account for less than two percent of all claims in Michigan, they represent approximately 45% of overall claim costs. Ultimately, these costs are the responsibility of the insurance carrier who then passes these costs on to their insureds in the form of a policy surcharge.
An auto insurance carrier must be proactive in managing the costs associated with auto related medical claims under Michigan’s PIP coverage by implementing effective and efficient benefit management techniques. This can be a daunting task without proper guidance and systems in place. Northwood has formulated a successful system for administering no-fault benefits to claimants that provides cost-saving resources and industry-leading expertise.
Northwood removes the burden of reviewing and validating medical expenses related to auto accidents from the insurance carrier’s adjusters by acting as a third party administrator on auto related claims involving injuries both catastrophic and minor. Partnering with a Durable Medical Equipment Benefits Manager (DBM) and Pharmacy Benefits Manager (PBM) such as Northwood allows insurance carriers to offload the administration of automobile injury claims to an industry expert. By utilizing its network of contracted providers through its unique DBM/PBM model, Northwood is able to offer discounts on home health care products and services including over-the-counter and prescription medications to insurance carriers.
As Michigan’s leading Durable Medical Equipment Benefits Manager (DBM) and Pharmacy Benefits Manager (PBM), Northwood is able to partner with insurance carriers to provide their expertise on efficient methods for reducing costs associated with auto related medical claims. Northwood has the advantage of over 20 years of experience in the DBM/PBM industry, which directly benefits the insurance carriers that partner with them. For a referral or a no-obligation quote, contact Northwood today.
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