NEW YORK SEEKS FRAUD REMEDIES:

The New York Senate’s Standing Committee on Insurance, chaired by James L. Seward, R-District 51, held hearings last month regarding growing concerns about insurance fraud, particularly staged accidents, that abuse the state’s no-fault auto insurance system. As summarized in a bulletin issued by the Professional Insurance Agents of New York, August D’Aureli of the New York State Insurance Department’s Insurance Frauds Bureau began the day’s testimony with what he termed a “street level look at the no-fault problem.” He indicated that the center of the no-fault problem lies with the medical facility or the provider and noted that runners—individuals who orchestrate or stage accidents—are increasing in number and get paid anywhere between $1,500-$2,500 per job. The senators also heard from Liberty Mutual’s New York Special Investigations Manager John Huber; Jim Urban, claims team manager for State Farm Insurance Co., and Steve Englert, head of Allstate’s New York special investigative unit. They suggested that de-certification of medical providers and attorneys who sell their licenses for a fee would be one good way to curb the no-fault problem. They also suggested establishing a system of certified and approved medical protocols for no-fault medical treatment to help reduce the number of phony tests, treatments and procedures that equate to premium increases for policyholders. D’Aureli noted that the no-fault system is paying up to $50,000 for each person involved in an accident, making it a “billion dollar per year problem.” He also told the committee that runners’ rings are becoming increasingly territorial, and this, coupled with New Jersey’s tightening of its fraud-fighting laws, has flooded downstate New York with such criminals. The rings are also spreading into upstate New York, where people are unfamiliar with their operations. To halt the problem, he urged the passage of a felony runners’ bill, increasing the penalties from a misdemeanor to a felony. He also suggested examining how medical facilities are formed as corporations to reduce the number of so-called “medical mills” providing “treatment” to accident victims.