U.S. insurers rank Regulatory risk as the #1 cause for concern among among several types of risk including IT risk, Operational risk, Market risk and Fraud. This is according to a Q1 2014 national study conducted among 300 insurance organizations by Wolters Kluwer Financial Services, a risk management, compliance, finance and audit consulting and research company.
The three areas of Regulatory risk respondents acknowledged as being most worrisome were:
- Ensuring compliance with regulation changes
- Keeping track of new and changing regulations
- Demonstrating regulation compliance to regulators
Respondents also expressed concerns about maintaining growth and profitability due to the increasing costs of regulatory compliance coupled with the ever increasing number of regulations. Becoming aware of new and revised federal and state regulations has its own challenges, but then ensuring systems are in place to guarantee compliance, is becoming unmanageable and financially unbearable.
One area of increasing concern for P&C insurers because of the increasing number of regulatory changes and additions, coupled with the explosive growth of claimants, is Medicare. Medicare beneficiaries currently exceed 15% of the U.S. population, and are increasing at the rate of 10,000 per day. They are projected to account for nearly 25% of the U.S. population within 15-years, with a corresponding increase in the percentage of P&C casualty claims involving a Medicare beneficiary. This, in turn, implies a significant increase in financial exposure to such claims, and Medicare claims are disruptive, time consuming, and costly to resolve.
Medicare’s ever-changing and complex regulations are the epitome of the regulatory challenges facing P&C insurers. It requires full-time vigilance to simply keep up with the changes and additions to the Medicare regulations. Ensuring front-line claim adjusters are current on the regulatory changes is, to be blunt, nearly impossible. The result most P&C insurers are facing are 1) overpayment to Medicare that frequently runs into the millions of dollars annually for a single insurer, or 2) the risk of non-compliance discovery that carries major penalties and public disclosures that can undercut shareholder confidence in management and erode the brand image and its market value.
Medicare compliance is the exclusive focus for Flagship Services Group. We are full-time in our vigilant monitoring of Medicare regulations and court rulings. Our legal, medical and claims professionals, supported by a large team of operations managers, follow all the changes, understand the short-term and long-term implications and master the processes, including rebuttals, negotiations and resolutions, for total compliance, accelerated closure and significant reductions in reimbursement obligations.
We protect our client’s financial resources and mitigate any non-compliance risks by completely removing the Medicare claims headache from your adjusters’ desks, guaranteeing 100% compliance. Our performance for our clients in unmatched.