Insurers Hail N.Y. Physician Decertification Fraud Reform

Insurance companies are applauding New York Gov. George Pataki for signing legislation that they say will assist them in their efforts to fight insurance fraud.

Pataki signed A.8376, the physician decertification bill, which decertifies physicians from receiving payment under the no-fault system when the physician engages in deceptive billing or fraudulent practices.

“This is a great victory for insurers, consumers and patients,” said Kristina Baldwin, regional manager and counsel for the Property Casualty Insurers Association of America. “Passage of this bill will help rid the no-fault system of medical mills and unscrupulous medical providers.”

In recent years, New York’s no-fault fraud problem has exploded into a $1billion per year issue, according to industry reports. Experts say there is an organized crime element to New York’s fraud problem with staged accidents, fake injuries and treatment at medical mills, which churn out fake bills and submit them to insurance companies. Ultimately, policyholders pay for this fraudulent activity in the form of higher insurance premiums.

“While recent regulatory activity, as well as a crackdown on fraud by insurance companies, have recently helped to significantly reduce no-fault fraud in New York, it is still a significant problem that costs New York insurance consumers millions of dollars per year,” added Baldwin.

She said the enw law would help “close the doors on medical mills that will further reduce N.Y.’s no-fault problem.”

PCI is composed of more than 1,000 member companies that write $173 billion in annual premium, 39.4 percent of the nation’s property/casualty insurance.