New York insurance regulators are proposing sweeping reforms in the state’s no-fault insurance law, in light of irregularities and backlogs that currently hounds the state. In their proposal, no fault insurance forms will be modified and will have additional entries to make sure that only those vehicle accident related injuries are paid by insurers. In this scenario, insurers will have an easier time processing claims and can also save them money by paying only for injuries caused by a vehicular mishap. Fraudulent and exaggerated claims will also be checked as insurers would be using fee charts and schedules. The change would also eliminate the need for lengthy verifications which just prolongs claims processing.
The proposal also contains provisions that would streamline the processes car insurance companies need to accomplish before suspending payments or claims requested by victims and health facilities. Also, health facilities that are caught tampering or falsifying claims will be suspended and their licenses revoked.
Currently, state courts are inundated with no-fault insurance claims, many of whom insurance regulators suspect to be fraudulent and bloated. It seems that unscrupulous entities are exploiting a certain provision of the existing no-fault insurance law that mandates insurance companies to pay claims that have not been denied within 30 days of filing.
The current no-fault insurance law was enacted in 1974 and if regulators are successful, this will be the first time in its history that substantial changes and modifications will be made in the law. No-fault insurance allows consumers to directly go to insurance company offices to ask for reimbursements for medical bills caused by auto accidents, regardless of who is at fault.
Presently, New Yorkers have to shoulder additional fraud taxes as a consequence of the no-fault insurance law. With claim numbers continuing to climb, authorities expect that insurers in return would make proportional adjustments to charges. They, however, plan to put a stop to this practice through their proposal.
Another component of their provision seeks to change the practice of insurers regarding scheduling of medical exams. New provisions will require insurers to schedule medical exams on staggered days and not just on one date. They are also prohibited from sending victims and claimants to hospitals or health care facilities that are unreasonably distant and highly inaccessible.
Claimants can also have better choices in seeking legal help since regulators upgraded the maximum attorney fees and removed the minimum counsel fees provided by the law.
Insurance regulators are currently seeking approval and feedback from the public and consumers before implementing the insurance proposals. New York residents have until Jan 1, 2010 to submit their suggestions or comments on the bill.