In recent months, a bill for automobile no-fault reform in the state of Michigan was introduced into the legislature. Key highlights of the proposed reform according to the Detroit Free Press included a call for reduced auto insurance premiums with a reduction ranging from 20 to 50 percent over a three-year period and a cap on medical fees for those using Medicare who were injured in an auto accident. The bill would have given seniors the option to use Medicare instead of auto insurance and would have introduced provisions that allowed the state of Michigan to oversee any premium increases within the following five-year period.
The proposed reform would also have introduced personal injury protection limit options for insureds to choose from, including the current unlimited benefit as well as a $250,000 and $500,000 limit option. The state of Michigan is currently the only state that provides unlimited automobile no-fault benefits to claimants injured in an automobile accident. While these limitless benefits assist with the indemnification of injured claimants, they also pose a challenge in terms of overall claims costs.
The proposed automobile no-fault reform bill was ultimately not ratified. Regardless of any legislative changes, however, adjusters should review their current claims administration processes for opportunities to reduce overall auto no-fault claims costs for their insurance company. To assist with this process, review the following three questions to ensure you are maximizing cost reducing efforts on all no-fault claims.
First, is your insurance company working with a third-party administrator (TPA)? Partnering with a TPA on auto no-fault claims brings about cost reductions in a variety of ways. Experienced TPAs will have valuable knowledge and resources for adjusters to draw upon throughout the entire lifecycle of a no-fault claim. Additionally, the administrative burden on adjusters will be greatly reduced since a TPA will take over several aspects of claims administration, leaving the adjuster with the opportunity to maximize his or her time on each claim.
Second, does your insurance company have pre-authorization processes in place? With every claim involving prescription drugs, your insurance company should be utilizing a pre-authorization procedure. Implementing this process will reduce claims costs by eliminating payouts on non-auto-related prescriptions for claimants. Furthermore, every prescription that a claimant fills that is auto-related will not require them to pay out of their own pocket. Claimants are shown to be more satisfied with the claims process when they do not have to pay directly for their auto-related prescription medicines.
Finally, does your insurance company have discounted rates in place for claimant prescriptions and home health care products and services? An experienced TPA will have an expansive network of providers that have agreed to offer discounted rates to an insurance company and its claimants. Without this network and the pre-negotiated rates, your insurance company may be paying too much for prescribed services under its automobile no-fault claims.
Insurance carriers contracting with Northwood as a TPA on automobile no-fault claims will realize reduced costs through a variety of ways. Please contact Rosanne Brugnoni at 586-755-3830 ext. 3771 for a more customized look at ways you can reduce costs for your insurance company.
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