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Claim severity due to fraud is a huge problem for insurance carriers. Although there are many factors contributing to the rise of auto injury medical claim costs — including more expensive pharmaceuticals and costlier treatment options that inflate paid losses — fraud is clearly one expense that carriers can and should address.

One specific area of medical claim abuse has appeared in PIP and/or “no-fault” states where the ability to bill more high-cost procedures has provided a lucrative opportunity for fraud. New York, Pennsylvania, Michigan, Minnesota, and Florida exhibit greater claim severity compared to the overall experience in the U.S., with particular sectors of medical care such as radiology and other diagnostics on the rise. These procedures are performed not only more frequently but also earlier in the treatment cycle. As a result, costs are rising higher than overall medical inflation.

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