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:6/22/2017)... ... June 23, 2017 , ... ... fight against hunger on June 21, 2017, at the Emeryville Center of Community ... and malnutrition around the world. , Rise Against Hunger (formerly Stop Hunger Now) ...
(Date:6/20/2017)... ... 20, 2017 , ... After months of negotiations, FaceCradle USA is proud to announce the debut ... 21. , “Introducing our product on QVC is something we all worked hard to achieve ... to more than 90 million homes in the United States,” said FaceCradle USA President Dylan ...
(Date:6/20/2017)... ... June 20, 2017 , ... Kenneth Mayer, MD, has been appointed a new ... Mayer, who joined the JIAS Editorial Board in 2016, has co-authored more than 800 ... Fenway Health and Co-Chair of The Fenway Institute, a member of the ...
(Date:6/20/2017)... DIEGO, California (PRWEB) , ... June 20, 2017 ... ... product documentation and help content solutions for the enterprise, is proud to announce ... properties, including CRM, e-commerce, ticketing systems, company websites, and more to provide a ...
(Date:6/20/2017)... (PRWEB) , ... June 20, 2017 , ... With certifications ... Invisalign® in Denville, NJ, Drs. Adam and Hal Kimowitz are currently accepting new ... complications that traditional orthodontics can cause for some patients, which is why they offer ...
Breaking Medicine News(10 mins):
(Date:5/24/2017)... , May 24, 2017  ivWatch LLC today ... Manufacturer (OEM) Board to enable seamless integration of ... monitoring systems, infusion pumps and other devices. By ... be able to help health care customers deliver ... risks related to IV therapy. "The ...
(Date:5/22/2017)... 22, 2017  Lilac Corp, the company that ... launch of a new website . The ... a clinical study that showed surprising clearance of ... in individuals suffering from HPV warts, precancerous, or ... are no other treatments that clear the virus. ...
(Date:5/18/2017)...  Two Bayer U.S. Pharmaceutical leaders received top awards ... 28 th Woman of the Year ... longstanding mission of furthering the advancement and impact of ... Cindy Powell-Steffen , senior director of brand activation and ... Libby Howe , a regional business manager for New ...
Breaking Medicine Technology: