In workers’ compensation today, the 800-pound gorilla is rising medical costs. It was not that long ago that the ratio of indemnity costs to medical costs was 60/40. It’s now been flipped — to 40/60, with medical costs representing the most expensive component. Moreover, that ratio is expected to change again, reaching 70/30 in 2016.

Therefore it’s no wonder that today insurance payers are exploring every possible avenue of medical cost containment within their claim operations. No stone is left unturned, as they look at maximizing PPO/MCO strategies, specialty review, negotiation, and other managed care initiatives.


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