In the wake of an epic car-insurance scam, New York state officials are preparing to crackdown on doctors who loan their names to clinics that are nothing more than billing mills.
New York Superintendent of Financial Services Benjamin Lawsky said he plans to zero in on white-collar criminals in white coats within a month.
A rigorous statewide initiative is underway to close medical offices billing for services that are either wholly unnecessary or never rendered to auto accident victims. Under the new regulation, physicians engaging in unscrupulous billing practices to siphon funds from New York’s personal injury protection (PIP) system will ostensibly turn themselves into pariahs, at least in the professional sense.
The Department of Financial Services has already identified 135 medical providers whose billing practices have raised concerns regarding possible no-fault fraud through audits and information obtained from law enforcement and insurers. As part of an ongoing investigation, letters are being sent to all 135 medical providers demanding a response and information. According to the department, failure to answer the letters may automatically lead to the medical provider being banned from the no-fault system.
The Federal government in March charged 36 people in a massive $279 million scheme to bilk New York insurers out of the state's PIP no-fault benefit. The fraud is alleged to have started in 2007 and continued until discovered last year. The organization allegedly scammed the medical system by having doctors prescribe physical therapy, acupuncture and chiropractic treatments as many as five times a week.
Kamis, 15 Maret 2012
Rabu, 14 Maret 2012
Florida Passes Auto Insurance Reform Law
Governor Rick Scott got the legislation he wanted to reform Florida’s mandatory motor vehicle no-fault law and crack down on the abuses in personal injury protection cases that have led to skyrocketing increases for coverage.
Whether the new measure will be effective remains to be seen.
The measure (HB 119) passed on a 22-17 vote in the State Senate after some heavy duty lobbying by Gov. Scott on Friday, March 9th just before the annual legislative session was to end. The Bill had passed the House earlier in the day.
The personal injury protection (PIP) law was adopted in 1972 to make sure anyone injured in an auto accident would quickly get money to treat their injuries. The legislation provided that a driver’s insurance company pay up to $10,000 to cover medical bills and lost wages after an accident, no matter who is at fault.
PIP costs have risen by $1.4 billion since 2008, largely because of the runaway fraud that threatens the system, most notably in the metropolitan Miami and Tampa areas. Florida ranks first nationally in staged accidents.
The legislation requires an accident victim to obtain treatment within 14 days in an ambulance or hospital, or from a physician, osteopathic physician, chiropractic physician, or dentist. The full $10,000 PIP medical benefit is available only if a physician, osteopathic physician, dentist, or a supervised physician’s assistant or advanced registered nurse practitioner determines that the insured has an “emergency medical condition.” Otherwise, the PIP medical benefit is limited to $2,500.
Follow-up services and care requires a referral from a physician, osteopath, chiropractor or dentist. Massage therapists and acupuncture was eliminated from eligibility for PIP benefits.
The bill would also establish an organization within the Division of Insurance Fraud to combat motor vehicle insurance fraud.
Health-care practitioners found guilty of insurance fraud would have their licenses revoked for five years and banned from seeking PIP reimbursement for a decade.
Another provision in the bill requires the Office of Insurance Regulation to hire an independent consultant by September to calculate the savings expected from the Act.
The bill includes a 10 percent rate reduction on PIP that’s not guaranteed. If insurers who offer PIP do not provide their customers a minimum 10 percent rate reduction, they must explain in detail why not. A second rate filing required on Jan. 1, 2014, proposes insurers have a 25 percent premium reduction for policyholders unless they can show why they’re unable to provide the cut.
The final bill represents a compromise as both the Senate and House had passed different legislation to reform PIP. However a bill must be passed by both bodies to become law.
The original House bill required those injured in auto accidents to get treatment in an emergency room within 72 hours or with the medical provider of their choice if the cost is under $1,500. It also capped attorneys' fees in both individual and class-action disputes and allows insurance companies to examine policyholders under oath when investigating claims.
The original Senate bill tightened procedures for licensing medical clinics and authorizing who can provide treatment and required long-form incident reports as a way to root out staged accidents. It updated the bill-payment system and gave hospitals priority standing in personal injury protection claims.
Lessons for Ontario:
One of the shortcomings of the Ontario system is the ability of a wide range of health care practitioners to recommend treatment and assessments. The Florida bill requires treatment recommendations come from a physician, osteopathic physician, dentist, or a nurse practitioner. Otherwise only $2,500 in treatment is available. However, in Ontario treatment has already been restricted to $3,500 for accident victims with minor injuries.
Florida has essentially delisted massage therapy and acupuncture treatment. In Ontario there is a need to limit treatment to interventions where there is scientific evidence to support those interventions.
The Florida bill would ban health care providers who are convicted of fraud from billing auto insurers for 10 years. A similar ban is needed in Ontario.
Bill HB 119 can be found here.
Whether the new measure will be effective remains to be seen.
The measure (HB 119) passed on a 22-17 vote in the State Senate after some heavy duty lobbying by Gov. Scott on Friday, March 9th just before the annual legislative session was to end. The Bill had passed the House earlier in the day.
The personal injury protection (PIP) law was adopted in 1972 to make sure anyone injured in an auto accident would quickly get money to treat their injuries. The legislation provided that a driver’s insurance company pay up to $10,000 to cover medical bills and lost wages after an accident, no matter who is at fault.
PIP costs have risen by $1.4 billion since 2008, largely because of the runaway fraud that threatens the system, most notably in the metropolitan Miami and Tampa areas. Florida ranks first nationally in staged accidents.
The legislation requires an accident victim to obtain treatment within 14 days in an ambulance or hospital, or from a physician, osteopathic physician, chiropractic physician, or dentist. The full $10,000 PIP medical benefit is available only if a physician, osteopathic physician, dentist, or a supervised physician’s assistant or advanced registered nurse practitioner determines that the insured has an “emergency medical condition.” Otherwise, the PIP medical benefit is limited to $2,500.
Follow-up services and care requires a referral from a physician, osteopath, chiropractor or dentist. Massage therapists and acupuncture was eliminated from eligibility for PIP benefits.
The bill would also establish an organization within the Division of Insurance Fraud to combat motor vehicle insurance fraud.
Health-care practitioners found guilty of insurance fraud would have their licenses revoked for five years and banned from seeking PIP reimbursement for a decade.
Another provision in the bill requires the Office of Insurance Regulation to hire an independent consultant by September to calculate the savings expected from the Act.
The bill includes a 10 percent rate reduction on PIP that’s not guaranteed. If insurers who offer PIP do not provide their customers a minimum 10 percent rate reduction, they must explain in detail why not. A second rate filing required on Jan. 1, 2014, proposes insurers have a 25 percent premium reduction for policyholders unless they can show why they’re unable to provide the cut.
The final bill represents a compromise as both the Senate and House had passed different legislation to reform PIP. However a bill must be passed by both bodies to become law.
The original House bill required those injured in auto accidents to get treatment in an emergency room within 72 hours or with the medical provider of their choice if the cost is under $1,500. It also capped attorneys' fees in both individual and class-action disputes and allows insurance companies to examine policyholders under oath when investigating claims.
The original Senate bill tightened procedures for licensing medical clinics and authorizing who can provide treatment and required long-form incident reports as a way to root out staged accidents. It updated the bill-payment system and gave hospitals priority standing in personal injury protection claims.
Lessons for Ontario:
One of the shortcomings of the Ontario system is the ability of a wide range of health care practitioners to recommend treatment and assessments. The Florida bill requires treatment recommendations come from a physician, osteopathic physician, dentist, or a nurse practitioner. Otherwise only $2,500 in treatment is available. However, in Ontario treatment has already been restricted to $3,500 for accident victims with minor injuries.
Florida has essentially delisted massage therapy and acupuncture treatment. In Ontario there is a need to limit treatment to interventions where there is scientific evidence to support those interventions.
The Florida bill would ban health care providers who are convicted of fraud from billing auto insurers for 10 years. A similar ban is needed in Ontario.
Bill HB 119 can be found here.
Senin, 12 Maret 2012
Three new auto insurance private member's bills introduced in Ontario
Let's be perfectly clear, very few private member’s bills become law. However, the fact that three private member's bills were introduced in the Ontario legislature in one week indicates a growing awareness that problems with the Ontario auto insurance system persist.
Mississauga-Brampton South MPP Amrit Mangat reintroduced her auto insurance bill, which she first introduced in June 2011. The purpose of Reducing Automobile Insurance Premiums by Eliminating Fraud Act, 2012 (Bill 41) is to protect people who report insurance fraud. It is also intended to ensure that insurance investigators have the proper tools to investigate fraud.
Bill 45
The Bill amends the Act to require that elements of a proposed risk classification system use the following mandatory factors in decreasing order of importance:
Mississauga-Brampton South MPP Amrit Mangat reintroduced her auto insurance bill, which she first introduced in June 2011. The purpose of Reducing Automobile Insurance Premiums by Eliminating Fraud Act, 2012 (Bill 41) is to protect people who report insurance fraud. It is also intended to ensure that insurance investigators have the proper tools to investigate fraud.
York West MPP Mario Sergio introduced Insurance Amendment Act (Elements in Classifying Risks for Automobile Insurance), 2012 (Bill 43), which deals with allowable elements of a risk classification system.
Then a similar bill was tabled by Bramalea-Gore-Malton MPP Jagmeet Singh. The Insurance Amendment Act (Risk Classification Systems for Automobile Insurance), 2012 (Bill 45) also deals allowable elements of a rsk classification system.
The Bill provides whistle-blowing protection to an inspector under the Independent Health Facilities program of the Ministry of Health and Long-Term Care, health regulatory College investigators, insurance company employees, IBC staff and the police. It does not protect private citizens. The Bill protects these employees from dismissal and other forms of discipline as well as from harassment and other forms of coercion. It also protects them from civil suits as long as their were acting in good faith.
The Bill allows the health regulatory Colleges to appoint investigators to determine whether College members have been involved in fraudulent activities related to auto insurance claims. I believe the College Registrars already have that authority. The Bill does go further by requiring that the police be notified if an investigation suggests that there has been such fraudulent activity.
The Bill also amends the Independent Health Facilities Act to provide that a licensee under the Act must be a member of a health profession college. This amendment appears to be irrelevant. An Independent Health Facility is a facility where members of the public receive services (lab tests, diagnostic imaging, laser surgery, etc.) paid for by the Ministry of Health and Long-Term Care. They are not involved in auto insurance claims.
The Bill can be found here.
The Bill amends the Insurance Act by requiring automobile insurers to use a person’s driving record, a person’s age, the type of automobile, and any element prescribed by regulation in classifying risks for a coverage or category of automobile insurance. The Bill also prohibits automobile insurers from using a person’s home address or postal code and any element prescribed by regulation in classifying such risks.
Essentially the Bill would eliminate territorial rating. The Ontario Cabinet already has regulation-making authority to prohibit territories as an element of a risk classification system. Section 16 of Ontario Regulation 664 deals with prohibited elements. The impact of this Bill is that it removes discretion from Cabinet regarding the use of territories as an element of a risk classification system.
The Bill can be found here.Bill 45
The Bill amends the Act to require that elements of a proposed risk classification system use the following mandatory factors in decreasing order of importance:
1. The driving safety record of the insured person, but only in respect of accidents where the person was found to be principally at fault.
2. The number of kilometres driven annually by the insured person.
3. The insured person’s years of driving experience.
4. The population of the statistical area in which the driver primarily resides.
If other factors are used, they cannot, when taken together, be given more weight than the fourth mandatory factor.
Insurers are prohibited from using a geographical region in which an insured person resides as an element in classifying risks. Other elements may continue to be prohibited under the regulations. Insurers must provide written explanations and other prescribed information regarding rate determinations in specified circumstances.
This Bill goes beyond the proposed amendments in Bill 43. Not only does the Bill eliminate territorial rating but it requires insurers to use specific factors in classifying risks and sets out their relative weights.
The Bill can be found here.
Jumat, 02 Maret 2012
Staged Accident of the Week
Curb Drive Down Fraud
This video illustrates the popular "Curb Drive Down" staged car accident. Staged traffic accidents are on the rise, endangering the lives and boosting the car insurance rates of innocent drivers who may unwittingly think they're at fault.
This video illustrates the popular "Curb Drive Down" staged car accident. Staged traffic accidents are on the rise, endangering the lives and boosting the car insurance rates of innocent drivers who may unwittingly think they're at fault.
Kamis, 01 Maret 2012
Insurance News - Thursday, March 1, 2012
$279 Million No-Fault Auto Insurance Scam In NYC Called Largest Ever
A cadre of corrupt doctors and scam artists sought to cheat auto insurance companies out of $279 million in bogus medical claims — the largest-ever fraud involving New York’s no-fault law, authorities said Wednesday.
A $250 Million Fraud Scheme Finds a Path to Brighton Beach
The plot involved 10 doctors, 9 separate clinics in New York City and 105 different corporations, all in service of a health care fraud ring that federal authorities say conspired to steal more than a quarter of a billion dollars from insurance companies. And when the details were announced on Wednesday, they cast an unflattering spotlight on how immigrants from the former Soviet Union have often dominated such schemes in the city.
read more...
A cadre of corrupt doctors and scam artists sought to cheat auto insurance companies out of $279 million in bogus medical claims — the largest-ever fraud involving New York’s no-fault law, authorities said Wednesday.
The investigation resulted in federal racketeering, health care fraud, mail fraud and money laundering charges against 36 people, mainly of Russian descent. They include 10 physicians and three lawyers. One had the nickname “KGB.”
At a news conference, U.S. Attorney Preet Bharara said while the false claims totaled $279 million, the actual loss to private insurers was $113 million. Some of the ill-gotten gains were spent on vacations in Mexico, shopping sprees at Saks Fifth Avenue and rides in limousines, he said.
read more...A $250 Million Fraud Scheme Finds a Path to Brighton Beach
The plot involved 10 doctors, 9 separate clinics in New York City and 105 different corporations, all in service of a health care fraud ring that federal authorities say conspired to steal more than a quarter of a billion dollars from insurance companies. And when the details were announced on Wednesday, they cast an unflattering spotlight on how immigrants from the former Soviet Union have often dominated such schemes in the city.
This one, like many others, was rooted in Brighton Beach, Brooklyn, the locus of the city’s Russian-speaking immigrant population, many of whom grew up under a Communist system that bred disdain for the rules and a willingness to cheat to get around them.
Brighton Beach has one of the highest rates of health care fraud in the nation, according to federal statistics. In fact, an analysis of data from the Centers for Medicare and Medicaid Services, the federal agency that regulates those two programs, shows that more health care providers in the Brighton Beach ZIP code are currently barred from the programs for malfeasance than in almost any other ZIP code in the United States. (The top spot is in southern Florida, with its high proportion of older residents.)read more...
Kamis, 23 Februari 2012
Insurance News - Thursday, February 23, 2012
'Project Whiplash' Leads to Early Morning Arrests
Toronto Police Services news release on Project Whiplash.
FSCO Lays Charges Against Rehabilitation Clinics
The Financial Services Commission of Ontario (FSCO) has charged four rehabilitation clinics and six individuals affiliated with these clinics with offences under Ontario’s Insurance Act. These clinics and individuals are alleged to have submitted false invoices to insurers as part of a staged auto accident ring.
FSCO Arbitrator Recognizes 60-Day Timeline for Mediations
A recent decision by FSCO Arbitrator Jeffrey Rogers supports that a mediation can be deemed to have failed if it has not been mediated within the 60 day timeframe noted in both the Insurance Act as well as The Dispute Resolution Practice Code.
More than three dozen people are in custody Thursday following multiple arrests across the Greater Toronto Area overnight which targeted a vehicle insurance fraud ring.
The investigation, code named "Project Whiplash" concentrated on an accident and insurance fraud ring allegedly run by members of the Tamil community. The 37 suspects arrested in Scarborough, Brampton and Markham face 130 charges.
read more....Toronto Police Services news release on Project Whiplash.
FSCO Lays Charges Against Rehabilitation Clinics
The Financial Services Commission of Ontario (FSCO) has charged four rehabilitation clinics and six individuals affiliated with these clinics with offences under Ontario’s Insurance Act. These clinics and individuals are alleged to have submitted false invoices to insurers as part of a staged auto accident ring.
On February 23, 2012, the following clinics were charged with one count each of knowingly making false or misleading statements to an auto insurer to obtain payment for goods and services provided to an insured and engaging in an unfair or deceptive act or practice:
- McCowan Rehabilitation Clinic (1583 Ellesmere Road, Suite 104, Scarborough, Ontario)
- Ontario Rehabilitation Clinic (3031 Markham Road, Suite 31, Scarborough, Ontario)
- Physiotherapy Clinic (1920 Ellesmere Road, Suite 110, Scarborough, Ontario)
- North York Health & Rehabilitation Centre (1280 Finch Avenue West, Suite 519, Toronto, Ontario)
FSCO Arbitrator Recognizes 60-Day Timeline for Mediations
A recent decision by FSCO Arbitrator Jeffrey Rogers supports that a mediation can be deemed to have failed if it has not been mediated within the 60 day timeframe noted in both the Insurance Act as well as The Dispute Resolution Practice Code.
In the decision, Leone and State Farm, Arbitrator Rogers states the following:
There is no merit to State Farm’s submission that the Application is not filed until a mediator is appointed. The definition of “file” does not suggest that interpretation. The Insurance Act and the Rules themselves treat filing and appointing a mediator as separate events. Section 280(2) of the Act sets the requirement for filing the application. Section 280(3) then requires the Director to “ensure that a mediator is appointed promptly.” Rule 13.1 states that on “receipt of a completed Application for Mediation… a mediator will be appointed promptly.” The Commission recognized this separation when it advised Mr. Leone that “[C]omplete applications are taking longer to be assigned to a mediator as a result of the large volume of applications which we continue to receive.read more...
Jumat, 17 Februari 2012
Insurance News - Friday, February 17, 2012
Police showed this BMW, that had its frame is welded together, which was part of a massive chop shop and insurance fraud racket operating out of Toronto and the Niagara Region on Thursday, Feb. 16, 2012. (Danny Pinto / CTV News)
Police in southern Ontario have arrested six men and laid more than 500 charges in connection to a massive chop shop and insurance fraud racket operating out of Toronto and the Niagara Region.
Police in southern Ontario have arrested six men and laid more than 500 charges in connection to a massive chop shop and insurance fraud racket operating out of Toronto and the Niagara Region.
Five Toronto men and one from the Niagara Region were charged in connection to the theft of 100 stolen vehicles, many of which ended up back on the road after passing fraudulent structural safety inspections.
Police allege the suspects would steal vehicles and register them with vehicle identification numbers taken from cars and trucks that had been written off and purchased as salvaged parts.
read more...
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