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:2/12/2016)... ... February 12, 2016 , ... Fisher House Foundation Chairman and ... J. Lee, Nevada Military Support Alliance president Scott Bensing, and Peggy Kearns Director, VA ... Southern Nevada Healthcare System. This will be the first Fisher House in Nevada, ...
(Date:2/12/2016)... ... ... Vail knee specialist Robert LaPrade, MD, PhD was named one of ... of physicians establishing, leading and partnering with ambulatory surgery centers across the United States. ... also known as an ASC, is a modern health care facility focused on providing ...
(Date:2/12/2016)... ... February 12, 2016 , ... Donor Network West, the organ procurement organization that ... partnership with San Ramon Regional Medical Center. Under the collaboration, the first of its ... to accommodate a more certain time frame for donor families for the recovery of ...
(Date:2/12/2016)... Land, TX (PRWEB) , ... February 12, 2016 ... ... families of southwest Houston and surrounding communities by continuing it’s commitment to act ... Bend Family Promise. The organization works closely with area homeless families to fulfill ...
(Date:2/12/2016)... (PRWEB) , ... February 12, 2016 , ... ... High-Cost Drug Categories: Strategies for Health Plans and PBMs,” an upcoming Feb. 24 ... maintain affordability and access in big-dollar therapeutic categories, such as the $1,000-per-pill hepatitis ...
Breaking Medicine News(10 mins):
(Date:2/11/2016)... -- - Cardiac Marker Diagnostic Testing ... Cancer Therapy. - European Point of Care Diagnostic ... - Key Diagnostic Testing Markets. - Molecular Diagnostics ... Testing. - Molecular Diagnostics in Infectious Disease Testing. ... Products World Markets. - Point of Care Diagnostic ...
(Date:2/11/2016)... 2016 Laboratory glassware and plasticware ... These may range from microscope slides to large storage ... from borosilicate glass because of its low weight and ... hand, started gaining popularity over the past decade when ... glass with plastic in several applications due to its ...
(Date:2/11/2016)... 11, 2016   Health 2.0 , the premiere ... technologies, announced today " 10 Year Global Retrospective ", ... over the past ten years.   ... Health 2.0 has served as the preeminent thought-leader in ... thousands of technologies, companies, innovators, and patient-activists through an ...
Breaking Medicine Technology: