NU Online News Service, Nov. 8, 3:43 p.m. EST

Proposed increases of 30 percent or more for certain fees by theNew York State Workers' Compensation Board (WCB) could have"unintended negative consequences for the state's no-faultautomobile system," the Property Casualty Insurers Association ofAmerica (PCI) said.

The fee hikes could also lead to more fraud and abuse, a problemalready plaguing the no-fault system, PCI said in a letter to theWCB.

The WCB has proposed a 30 percent increase in evaluation andmanagement fees and changes to the way chiropractic services arebilled which will result in increases of between 30-42 percent, PCIsaid.

PCI state officials said that such increases would impact autoinsurance rates.

"Although some updating of the workers' compensation feeschedule may be warranted, the proposed changes could lead tosignificant cost increases for motorists," said Kristina Baldwin,assistant vice president for PCI.

Moreover, she said, in addition to potentially increasing autoinsurance costs, increasing fees required to be paid to medicalcare providers may make New York's no-fault system even moreattractive as a target for fraud, "thereby exacerbating theproblems plaguing the system," she said.

The letter points out that medical claim costs have skyrocketedfor auto insurance.

It notes that since the end of 2004, the average amount paid formedical claims related to auto accidents in New York rose by 60.4percent, 31.2 points faster that the 29.2 growth rate of all otherno-fault states and nearly 42 points faster than the 18.6 percentgrowth rate in the consumer price index cost of medical goods andservices found in the region.

"We attribute much of the disparity in no-fault medical costs tofraud," Ms. Baldwin said.

"Related to the fraud problem is our concern that the no-faultsystem does not have the variety of cost containment tools found inthe workers' compensation system to guard against overutilization,which is a highly prevalent problem in the no-fault system," shesaid.

"We are urging the board to take into consideration that thedramatic increases in the workers' compensation fee schedule mayhave a real impact on no-fault costs," she added.