New York Governor Andrew Cuomo’s administration is stepping up efforts to end no-fault auto insurance fraud. The regulatory reforms are intended to prevent medical providers from being paid for health care not actually provided and close loop holes used by fraudsters to prevent or delay claims decisions, both of which increase costs to consumers.
The reforms also would limit claims to an established fee schedule for a given service; set a 120-day deadline for providing evidence that the treatments they are providing are medically necessary; and close loopholes that allow courts and arbitrators to force insurers to pay fraudulent claims because of minor paperwork errors when processing claims.
“These reforms will ensure that New Yorkers get the proper and timely treatment for legitimate injuries that they deserve, while closing loopholes that allow criminal medical mills to scam the system and drive up insurance premiums,” said Benjamin M. Lawsky, New York Superintendent of Financial Services in a press release. “We can and must have a system that works effectively for those in need and protects all drivers from paying a fraud tax imposed by criminals.”
According to a press release, the new regulations would give insurers more time to prove fraud and prevent payment. Currently, the system requires insurers to pay no-fault claims within 30 days, even when they suspect that health care services have not actually been provided.
“If implemented, these regulatory changes will help close the glaring loopholes that allow criminals to rip off the system and control the ensuing costs, which are passed on to drivers by way of higher premiums,” said Kristina Baldwin, co-spokesperson for Fraud Costs NY and AVP for Property Casualty Insurers Association of America.
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