Insurance Center

Referring to a study by the Insurance Information Institute (I.I.I.) that reports a substantial rise in fraud with regard to no-fault insurance claims, I.I.I. president Dr. Robert Hartwig says that several proposals have been presented with regard to the creation of state legislation that can deal with New York’s growing no-fault crisis. Examples of this are Institute Medical Protocols/Utilization Reviews. These types of reviews include the implementation of guidelines for medical treatment with respect to a specific auto accident-related injury. This is used to cut back those instances of over-treatment and/or those instances of the application of unnecessary treatments. The no-fault insurance system as it exists in New York is among those few insurance system in the United States that permits the payment of insurance claims by medical treatment providers while at the same time not requiring either utilization reviews or mandatory protocols. Because of this the expenses of the system costs are being driven up considerably and also because the PIP payment ceiling is a very liberal $50,000.

Another approach to control fraud is the use of an approach by which the industry is allowed to require disputes to be resolved through arbitration. This may be achieved through the implementation of an arbitration system that acts to expedite claims resolutions and to eliminate trial costs for all parties. Initially the point of the no-fault systems was to create a method for averting courtroom disputes. But in the state of New York, the result is that no-fault cases are filling up the judicial system’s calendar, and this is especially the case in New York City. In fact today city courts are so overcome with no-fault cases that trial dates are currently being set for 2011.
Another approach is to streamline the process for adjudicating no-fault claims. Through this the state would allow parties undergoing no-fault disputes that involved less than $5,000, to present proof that is based on a doctors sworn affidavit. As the system exists today, doctors are required to personally appear in court, and this time which could be better spent by them in the treatment of patients.

Another approach would be to implement fair burden of proof requirements. This would mandate that, for a person to establish his/her right to no-fault benefits, he/she would have to produce a witness who possesses personal knowledge of the facts that are being presented in the case. At the same time no presumption of medical necessity based on documents that are being submitted by non-medical plaintiffs should be allowed, or by witnesses who lack the personal knowledge of case facts. As it stands today, New York’s medical treatment providers are obliged to only submit proof that a bill was received by the auto insurer in order to establish entitlement to receive the amount that he/she has been billed and this is regardless of suspicions of fraud or abuse. For auto insurers the burden is much higher. They must produce in court both a witness who can testify under oath that the plaintiff’s claim was handled according to regulations in addition to a medical expert who will testify with regard to a “lack of medical necessity.”

Finally it is important to strengthen anti-runner laws. The term “runners” refers to those who receive a monetary benefit for their part in bringing about a fraudulent insurance transaction. They usually accomplish this by acting as a go-between for corrupt policyholders and dishonest medical treatment providers including fraudulent attorneys. If the crime were upgraded from its current status as a misdemeanor to a felony, it might provide an added deterrent.