NU Online News Service, May 2, 12:14 p.m. EDT
WASHINGTON—The Cuomo administration in New York is proposing a regulation aimed at ending the current rapid rise in no-fraud-auto-insurance rates by stopping payments where no medical treatment is rendered.
The proposed regulation also seeks to resolve technical issues the state Department of Financial Services believes will reduce the time required to resolve claims.
Benjamin Lawsky, DFS superintendent, says the rule was proposed based on data obtained through a probe last month into health-care providers “whose participation in medical mills is essential to making fraudulent no-fault claims possible.”
He says both issues increase the cost of auto insurance to consumers. The new regulation will be published for comment in the State Register May 17, triggering a 45-day public-comment period. It will be known as Regulation 68.
The new regulation:
- Puts an end to requirements that mandate insurers pay for treatments that were never actually provided, or pay more than the established fee schedule for a given service.
- Prevents health-care providers from ignoring requests for evidence that the treatments they are providing are medically necessary by setting a 120 day deadline to provide requested information.
- Closes the loophole that allows courts and arbitrators to force insurers to pay fraudulent claims simply because the insurer made minor paperwork errors when processing a claim.
According to Lawsky, consumers would greatly benefit from curbing these dishonest practices because no-fault benefits are typically subject to a $50,000 limit.
Thus, when providers over-bill or bill for phantom services, the consumers’ no-fault monetary limit is unjustly depleted, Lawsky explains.
The proposed rule has the support of Fraud Costs NY, the New York Insurance Association and local representatives of the American Insurance Association and the Property Casualty Insurers Association of America.
“The new regulations will give insurers more time to prove fraud and prevent payment, unlike the current system that requires insurers to pay no-fault claims within 30 days even when they suspect that health-care services have not actually been provided” Lawsky says.