N.Y. Supt. Mills Calls for Tougher No-Fault Auto Fraud Laws

October 18, 2005

New York Superintendent of Insurance Howard Mills joined with Assemblyman Jeff Brown (R-Manlius) to call on the New York State Assembly to pass tougher no-fault auto insurance fraud legislation.

The two called for legislation to combat so-called “runners” who refer accident victims to crooked health care providers and those who stage accidents in order to collect from insurers.

“When the Assembly returns to Albany next January, it is imperative that they finally pass tougher anti-fraud legislation,” said Mills. “Despite our great strides on behalf of policyholders and our fraud-fighting accomplishments, even more can be done to combat auto insurance fraud.”

“I believe strongly that these measures deserve the full attention of and passage by the State Assembly,” said Assemblyman Jeff Brown (R-121st A.D.). “Enactment of these measures into law would mean lower automobile insurance rates for New York’s consumers, many of whom are already struggling to pay for gasoline this fall.”

The measures being backed by Mills and Brown have previously passed the Senate but not the Assembly.

To crack down on the use of runners, the New York State Senate has passed every year since 2000 legislation that would make it a class E felony to act as a runner or to procure one. The term “runner” refers to individuals who obtain clients, patients or customers for health care providers and attorneys who subsequently file fraudulent insurance claims.

The state Senate has also passed a bill to make it a crime to stage a motor vehicle accident with intent to commit insurance fraud. If the measure became law, those convicted of staging a motor vehicle accident and causing serious personal injury or death to another person would face class B felony charges. The Senate bill is named after the late Alice Ross, a 71-year-old grandmother who was killed in 2003 as the result of a staged auto accident in Queens.

Mills and Brown urged the Assembly to pass them as well in its next session.

Mills said enactment of the new laws would “build on the dramatic auto rate premium reductions that are occurring statewide,” Mills said.

The New York State Insurance Department has approved this year a number of auto rate reductions, saving policyholders almost $400 million. More than 20 auto insurers have reduced their rates an average of 5 percent in 2005. Mills credits the state’s crack down on no-fault auto insurance fraud and efforts to streamline the way in which claims are processed.

The insurance department has also reduced to 45 days from 180 days the time in which medical providers must submit claims to insurers for payment and to 30 days from 90 days the timeframe for injured parties to file an injury claim. Both measures closed loopholes in Regulation 68 that officials said had been exploited for fraud and abuse.

In another initiative that officials say has potential to save insurers and consumers money, the insurance department acted late last year to link durable medical equipment (e.g., neck braces, walkers) reimbursement costs to the fees as listed in the New York State Medicaid Management Information Provider Manual. Governed under Regulation 83, the sellers of durable medical equipment had billed auto insurers previously under rules that were open to interpretation.

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