NU Online News Service, March. 4, 2:43 p.m.EST

Of the 14,625 suspected health care fraud reports that the NewYork State Insurance Department received, 12,807 of them involvedthe state's no-fault system, according to the insurancesuperintendent's annual fraud report.

The report notes that suspected no-fault fraud accounted for 53percent of all fraud reports received in the state during 2010.

"After several years of decline, the number of suspectedno-fault fraud reports began to rise in 2007, evening off in 2010,"the report says. The number of no-fault fraud reports climbedsteadily from 10,117 in 2006 to 13,433 in 2009, before droppingsome to 12,807 in 2010.

As for other types of health care fraud reports received, thedepartment said 1,625 of the 14,625 reports involved accident andhealth insurance, and 193 involved disability insurance. A total of170 new health care fraud cases were opened for investigationthroughout the year, the department's report notes, and FraudsBureau health care fraud investigations resulted in 159arrests.

As a response to the no-fault fraud problem, the department saidin the report that it is working on an amendment to its no-faultregulation, Regulation 68.

In a separate statement, the department said it is seekingadditional public comments on changes to the regulation. Thedepartment issued a working draft outlining proposed changes in2009.

In November 2009, the department said one proposed revision would "simplifyprocedures required for insurers to suspend all payments for claimssubmitted by the owner or owners of medical clinics suspected offraud while an investigation of the clinics' licensing status isunderway."

Another proposed revision would modify prescribed forms torequire more information, helping to ensure that claims paid aremedically necessary, according to the department. The departmentalso said insurers would have greater latitude to deny healthservices that are not provided or are not billed in compliance withthe applicable fee schedule, and thus the payment of fraudulentclaims and instances of overbilling would be reduced.

The department has since revised its draft and is looking formore feedback from interested parties. "The department has workedhard to evaluate all of the input we received," said SuperintendentJames Wrynn in a statement. "The revised working draft reflectsthat feedback and it is being made available now to givestakeholders another opportunity to review our proposals and submitadditional comments."

On the legislative side, State Senator James Seward, R-Oneonta,introduced Senate bill 2816, which would implement tougher penalties on cheaters of thesystem, modify rules to allow insurers to investigate claims,prevent excessive and unnecessary medical costs, and mandate theuse of an arbitrator for disputed claims.

A report from the Insurance Research Council (IRC) at the startof the year said claim abuse appeared to be involved in 35 percent of claims in the New York City area.More than 20 percent appear to be fraudulent, the IRC said.