Insurance associations are applauding New York Gov. Andrew Cuomo’s proposal for a multi-pronged approach to combating auto insurance fraud. The initiative was outlined in the 2014–2015 executive budget proposal released Tuesday.
The executive budget briefing book describes proposals under the purview of the state’s Department of Financial Services aimed at strengthening consumer protections through reforms. The administration aims to curb no-fault automobile insurance fraud by prohibiting payments to health providers engaged in fraudulent activity, levying civil fines for violations and authorizing the Department of Financial Services to perform unannounced facility audits and inspections.
“The governor’s proposal to crack down on auto fraud appears to have great promise,” said Ellen Melchionni, president of the New York Insurance Association (NYIA) in Albany, N.Y. “Fraud is a huge problem in New York. The current laws contain gaping loopholes that allow criminals to exploit New Yorkers.”
NYIA said Gov. Cuomo’s plans include expanding the state’s Department of Financial Services’ ability to audit healthcare providers participating in the no-fault auto insurance system, prohibiting fraudulent providers from receiving payment and fining providers for engaging in illegal activities.
“Our healthcare system has been held hostage for too long by corrupt individuals posing as medical professionals,” Melchionni said. “Patient safety needs to be restored. Medical mills that have no interest in treating people seeking medical care need to be shut down.”
These enhanced consumer protections will make New York a safer place, Melchionni said. “Auto insurance fraud makes our roadways more dangerous, diminishes the quality of health care in our state, and adds financial burdens to New York families,” she said. “These additional fraud fighting measures are a definite step in the right direction.”
Melchionni said legislative action is also necessary to effectively fight fraud in the state. NYIA is calling for legislators to pass the following measures this year: make staging an auto accident a felony, end fraudulent billing from fly-by-night durable medical equipment providers, permit retroactive cancellation of fraudulently obtained auto policies, and require providers to prove that a treatment is medically necessary.
The American Insurance Association (AIA) in Washington, D.C., also welcomed Gov. Cuomo’s proposal.
“AIA applauds Gov. Cuomo for his ongoing commitment to combat fraud in New York’s no-fault auto insurance system,” said Gary Henning, AIA’s Northeast region vice president. “Working in coordination with the insurance industry, the Cuomo Administration has already made considerable strides in addressing no-fault fraud.” Enhancing the Department of Financial Services’ powers will further curtail fraudulent practices, he said.
“The proposed measure builds upon this past success by making it easier to remove fraudulent medical providers from the no-fault system. Removing these unscrupulous actors will remove unnecessary costs and abuse which will ultimately benefit New York State’s honest drivers,” AIA’s Henning said.
Source: New York Insurance Association, American Insurance Association
Was this article valuable?
Here are more articles you may enjoy.