Workers' compensation has faced challenges in recent years. Below is an
update on several of the current key issues - and how PMA continues to
support your response to them.
Issue: Challenging Economy
Current economic trends have been identified
as having significant influence upon the duration of employee absence.
Employers continue to experience increased costs from the following:
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Expense reductions
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Layoffs
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Offshore job movement
Solution
Offset employer costs through the following
PMA strategies:
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Proactive Risk Control Program
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A Meaningful Return-to-Work Program
Issue: Rising Medical Inflation
Health care expenses are the most
significant cost driver in the workers' compensation system. Factors
that have been known to cause medical inflation include the following:
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Expensive new technology
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High prescription drug costs
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Medical malpractice suits
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Increased use of specialists
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Aging workforce
Solution
PMA's comprehensive Medical Cost Containment
Program includes the following initiatives:
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Medical Bill Review Team
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Pharmacy Benefits Management Program
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Medical Case Management
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Return-to-Work Program
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Preferred Provider Network
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Out of Network Program
Issue: Expiration of the Terrorism Risk
Insurance Act (TRIA)
TRIA, which is scheduled to expire at the
end of 2005, requires insurers to offer terrorism insurance coverage to
businesses and, in return, the insurance industry's losses from attacks
by foreign terrorists are to be limited. TRIA is intended to cover 90
percent of the claims resulting from foreign terrorist attacks that
occur within the United States after the insurance industry has paid $15
billion in claims.
Solution
-
PMA is actively participating in insurance
industry trade associations' collaborative efforts to gain Congressional
support for the reauthorization of TRIA prior to its expiration date.
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PMA is lending its financial, underwriting
and actuarial expertise toward insurance industry efforts to develop
alternative approaches for responding to terrorism insurance exposures
if the reauthorization of TRIA does not occur.
"Regardless of industry challenges, PMA
remains committed to providing our customers with superior services that
positively impact results."
-- Vincent Donnelly, President and Chief Executive Officer of The PMA
Insurance Group
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