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  • The durable medical equipment (DME) industry continues to develop quickly. Insurers face rapidly advancing technology that can be difficult to stay updated on. These rapid advances within the DME industry represent significant benefits to claimants with catastrophic injuries sustained in an automobile crash, but also present their own unique problems to insurers and their adjusters. Insurers must fulfill their obligation to indemnify the claimant but in the continually evolving durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) field, an insurer’s adjusters may not be properly equipped to administer automobile no-fault claims in a way that indemnifies the claimant and minimizes the cost to the insurer.

    According to the 2014 National Health Expenditures document published on the Centers for Medicare and Medicaid (CMS) website, costs for durable medical equipment represented $3 trillion in medical spending in 2014. This amount represented over 17% of the expenditures in the overall economy that year. In addition, retail expenditures on DME totaled over $46 billion which represented an increase of just over 3%. These rising costs were attributed in part to the Affordable Care Act and its regulations regarding the healthcare industry and the health insurance industry.

    The National Center for Biotechnology Information (NCBI) and The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary indicated that another factor in increasing DME costs involved some of the equipment providers and manufacturers directly. Some DME and DMEPOS providers were found to engage in fraudulent practices such as accepting overpayments from Medicare, falsifying medical documents, incorrectly billing multiple groups of people (such as residents of a long-term care facility) and sending more than one bill on the same order.

    While not every DMEPOS provider engages in these fraudulent practices, it is important for an insurer to contract with a Durable Medical Equipment Benefits Manager (DBM) who has thorough knowledge of the industry in order to ensure the most efficient and most cost-effective automobile no-fault claims administration involving claimant injuries. Northwood offers years of expertise to the insurers it partners with on automobile no-fault claims administration.

    Throughout its history, Northwood has also developed a strong network of contracted providers who are all accredited through the Centers for Medicare and Medicaid. This accreditation is a process the contracted providers repeat every year which helps to ensure trustworthy partners within the DMEPOS and healthcare industry. Insurers benefit from this accreditation process and Northwood’s stringent requirements for its contracted network of providers in many ways, including the realization of reduced costs through the partnership with Northwood. Reduced administrative time spent on automobile no-fault claims by the insurer’s adjusters is also a significant benefit to insurers along with the expertise Northwood brings to the administration of automobile no-fault claims involving claimant injuries. For more information on DMEPOS and partnering with Northwood, please contact one of their representatives.

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