NY Says Auto Crash Reg. 68 Now In Effect

Insurance Superintendent Gregory Serio and carrier groups contend the revision is needed as part of an effort to overcome an estimated $1 billion-a-year auto injury fraud problem in the state.

Medical providers and the New York Trial Lawyers Association, who had obtained the stay as part of a suit to topple the regulation, contend the new rule is unfair and poorly researched.

"We think we have a strong case," said Suzanne Y. Mattei, an attorney for the trial lawyers. The group will continue its lawsuit she said. She noted that the five-judge panel's ruling did not contain any language giving the legal rationale behind the decision.

Terri Marchon, a spokeswoman for the department said a circular letter would go out shortly to insurers letting them know that the regulation is now in effect and providing guidance on how to implement it.

She said there would be an immediate review of insurers' auto rates to make sure that they reflect the expected savings from the new rule.

In addition, Ms. Marchon said there would be an outreach effort to make the public aware of the new requirements, as well as a review of insurance company claims operations to make sure they will be able to manage under Regulation 68.

"We think this will stabilize rates. It's great news for New York drivers," Ms. Marchon said.

Michael Moran, speaking for the American Insurance Association, said the Washington-based group would file another brief with the National Association of Independent Insurers and the New York Insurance Association in support of the department's position.

Bernie Bourdeaux president of the New York Insurance Association in Albany said of the decision, "This is terrific. We're pleased this process is finally coming to an end. It's not over yet but the end is in sight. There's a billion dollars-worth of fraud being committed?most of it medical?and we think these rules will help tremendously."

Ms. Mattei said there have yet to be full oral presentations on the case merits. "We're arguing the department failed to provide a rational basis for making its deadlines so short."

She said time limits were drawn "without analysis to figure out what would be a reasonable deadline. We argue they are so short they are inconsistent with the intent of the no-fault insurance law, which is to provide benefits to the public. Honest people will miss this deadline."

In Ms. Mattei's view, "It's very easy for an elderly person to miss a 30-day notice of claim deadline? 30 days goes by like the snap of finger."

Ms. Mattei said there is "room for negotiation" on the time limit for bill submission, but "we think 45 days will be a hardship for hospitals." Hospitals, she said, frequently have trouble tracking information related to treatment of accident victims and "if they can't get reimbursement they are out of luck."

Insurers in briefs have argued that under current regulations, fraudulent medical facilities will, at the end of 180 days, submit a stack of phony bills for thousands of dollars on behalf of conspirators whose injuries are "cured." Insurers are then required to pay the bills or deny the claims within 30 days.

David Snyder, AIA assistant general counsel, said in a statement today that, "The reality is that the public is being hurt each day that unnecessary fraud is allowed to continue without these anti-fraud reforms in Regulation 68."