Navigation Links
Inflated Medical Bills and Bogus Claims Drive Up Cost of No-Fault Auto Insurance in New York, I.I.I. Finds
Date:2/3/2010

New York's Automobile Insurance System Is Currently 'Under Siege,' I.I.I.'s President To Testify

ALBANY, N.Y., Feb. 3 /PRNewswire-USNewswire/ -- Fraud and abuse in New York's no-fault auto insurance system cost consumers and insurers nearly $230 million in 2009, constituting a "fraud tax" of $1,561, or 22 percent of every no-fault claim, according to Dr. Robert Hartwig, an economist and president of the Insurance Information Institute (I.I.I.).  

Since 2005, no-fault fraud has cost the state's consumers and insurers more than $600 million, Dr. Hartwig estimates, pointing out that the average cost of a no-fault auto insurance claim in New York State soared 55 percent between 2004 and 2009 as dishonest medical providers submitted inflated and sometimes bogus bills for services rendered to insurers.

"The scale of fraud and abuse in New York State's no-fault auto insurance system today is truly breathtaking," Dr. Hartwig stated, in remarks scheduled for delivery tomorrow to the New York State Senate's insurance committee.  "These medical providers partner with equally unscrupulous lawyers who sue insurers that dare to challenge these bogus claims -- choking New York's court system in the process."

If auto insurers are paying out more than they should in no-fault claims, their policyholders are paying out more in premiums, Dr. Hartwig observed. This 'fraud tax,' namely what New York's insurers are billed by medical providers versus what other pricing benchmarks indicate they should be charged, totaled nearly $1,600 per claim in 2009, a 20-plus percent surcharge medical providers are extracting from the system for every single accident.

"The average policyholder in New York spent $1,047 in 2007 to insure their vehicle compared to $795 nationally, a difference of $252 or 31.7 percent. The state ranks as the third most expensive in the country," Dr. Hartwig said, noting that 2007 is the most recent year for which definitive premium data is available.

The average cost of a no-fault auto insurance claim skyrocketed to $8,690 in the third quarter of 2009, up $3,075, or 55 percent, from $5,615, the average cost of a no-fault claim in the third quarter of 2004. Only Michigan and New Jersey auto insurers, which also operate in deeply troubled no-fault states, paid higher average no-fault claims as of year-end 2009, an I.I.I. analysis found.

"While the cost drivers influencing the price of auto insurance in New York are similar to those in other states in most respects, there is one glaring exception -- its $50,000 threshold for no-fault auto insurance claims is the highest dollar threshold in the United States. It should come as no surprise that the richest benefits in the country come with the highest costs," Dr. Hartwig said.

Recognizing the generosity of this $50,000 cap, and the absence in New York of safeguards such as medical treatment guidelines or utilization reviews and controls, Dr. Hartwig noted that the cost of the average no-fault Personal Injury Protection (PIP) claim rose 47.1 percent in New York between 2004 and 2009. Medical costs in the U.S. rose by 21.1 percent over this same time frame. PIP is the portion of an auto insurance policy that covers the treatment of injuries to the driver and passengers of the policyholder's car.  

"Solutions for containing New York's emerging crisis must necessarily focus on cost drivers and you will hear about many of these solutions from the other panelists speaking here today," Dr. Hartwig concluded. "But because the state has the highest no-fault dollar threshold in the country, it remains attractive to those who perpetrate fraud based on the perception that the insurers who pay the bills are a 'deep pocket.'"

For more information, go to No-Fault Auto Insurance.

FOR MORE INFORMATION ABOUT INSURANCE: www.iii.org

THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.

Insurance Information Institute, 110 William Street, New York, NY 10038, (212) 346-5500 | www.iii.org

New York Press Office | (212) 346-5500 | media@iii.org

SOURCE Insurance Information Institute

RELATED LINKS
http://www.iii.org

'/>"/>

SOURCE Insurance Information Institute
Copyright©2010 PR Newswire.
All rights reserved

Related medicine news :

1. Cathedral Healthcare System to Pay U.S. $5.3 Million to Resolve Allegations Involving Inflated Charges to Obtain Higher Medicare Reimbursement
2. MSU engineering team designs innovative medical device
3. ATS Medical to Present at the 2007 Thomas Weisel Partners Healthcare Conference
4. Providence St. Joseph Medical Center, Caregivers Reach Agreement on a Union Contract
5. Owner and Operator of Florida Durable Medical Equipment Company Convicted of Medicare Fraud
6. Father and Daughter From Tanzania Receive Their First Medical Examination in Newport Beach
7. Doctors and medical ethicist discuss whether doctors should participate in capital punishment
8. Preparation for Natural Disasters Critical for People With Diabetes, Chronic Medical Conditions
9. Doctors and Medical Ethicist Discuss Whether Doctors Should Participate in Capital Punishment
10. Symmetry Medical Completes Acquisition Of Specialty Surgical Instruments
11. Milestone Scientific Announces Successful Completion of its Collaboration Agreement With Carticept Medical
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:4/29/2016)... ... April 29, 2016 , ... Dr. ... of best seller "LOVE, MEDICINE and MIRACLES") addresses touchy topics related to Death ... podcasted thereafter . Dr. Bernie Siegel, author of a plethora of essential ...
(Date:4/29/2016)... Southlake, Texas (PRWEB) , ... April 29, 2016 , ... ... and neck pain, is proud to announce one of their physicians has been invited ... Osteopathic Family Physicians (Texas ACOFP) Family Practice Review conference on April 30, 2016. ...
(Date:4/29/2016)... ... ... Melanoma is the deadliest type of skin cancer. Although only about 1 percent of skin ... More than 10,000 people are expected to die of melanoma this year. The risk increases ... of the most commonly diagnosed cancers in young women. A recent breakthrough in genetic studies ...
(Date:4/29/2016)... ... April 29, 2016 , ... Jvion, ... round of funding led by Eastside Partners, with participation from existing investor Martin ... customer base and accelerate its technology and product roadmap. , “Jvion ...
(Date:4/29/2016)... ... ... Nike Softball Camp at the College of Brockport in New York is ... 10-18. All facets of the game will be covered; hitting, fielding, base-running, and team ... the finest softball facilities in the region. The outstanding professional college staff complement and ...
Breaking Medicine News(10 mins):
(Date:4/27/2016)... , le 27 Avril 2016 ... a progressé de +5% sur le trimestre, soutenu ... de consommables  Croissance de +16% des ... Mauna Kea Technologies (Euronext : MKEA, FR0010609263 ; ... confocale laser, annonce aujourd,hui son chiffre d,affaires pour ...
(Date:4/27/2016)... April 27, 2016 Elekta today ... platform will be the focal point of seven scientific ... European Society for Radiotherapy & Oncology, taking place April ... a state-of-the-art radiotherapy system and a high-field MRI scanner ... see the patient,s anatomy in real time. The MR-linac ...
(Date:4/27/2016)... , April 27, 2016   Zillion ... digital health technology platform, which specializes in live ... into scalable digital products, Zillion enables companies to ... empower consumers to take control of their health. ... video conferencing – including one-to-one, group and webcast ...
Breaking Medicine Technology: