N.Y. Assembly Passes AIA-Backed Bill to Reduce Fraud in Auto No-Fault System

June 27, 2005

Health care providers who participate in no-fault auto insurance fraud could be barred from treating accident victims as a result of legislation (A.8376-A/S.5784), supported by the American Insurance Association (AIA). The measure has been passed by the New York state Assembly, and the state Senate was expected to approve the bill.

“This legislation takes aim at health care providers who defraud the no-fault auto insurance system and simply move from medical mill to medical mill,” said Gary Henning, AIA assistant vice president, Northeast Region. “These scams cost honest policyholders millions of dollars, but it has been extremely difficult to stop them under current law. This bill gives the Insurance Department and insurers a new weapon to fight this systemic fraud.”

The bill requires the Superintendent of Insurance to establish a process for decertifying health care providers who engage in fraud, making them ineligible to submit bills or claims for payment to auto insurers under the no-fault system.

“AIA has been pushing for this type of legislation for several years, but it has been deadlocked in the legislature,” added Henning. “AIA worked closely with the sponsors, Assemblyman Ruben Diaz, Jr. (D-Bronx) and Sen. James Seward (R- Oneonta), to break that gridlock and pass this important measure. This is a meaningful bill that will help fight fraud and protect honest New Yorkers.”

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