N.Y. Gov. Signs AIA-Supported Bill to Reduce Fraud in Auto No-Fault System

Health care providers who participate in no-fault auto insurance fraud can be barred from treating accident victims as a result of legislation (A.8376-A/S.5784) supported by the American Insurance Association (AIA) and signed recently by New York Gov. George Pataki (R).

“This new law will help stop 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 the previous law. This law gives the Insurance Department and insurers a new weapon to fight this systemic fraud.”

Superintendent of Insurance Howard Mills, in consultation with the Departments of Health and Education, will now 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.

The legislation was signed into law on Aug. 2 as Chapter 423 of the Laws of 2005. The new law is effective immediately, and calls for establishment of the regulations within 180 days.