For the last two months of 2009, focus in certain states fall on personal injury protection coverage which, during the course of the year, has become the target of fraud and abuse by deceitful clinics and medical practitioners who bill for very expensive and unnecessary medical and check-up procedures.
For those who are not familiar, the words “no-fault car insurance” are used in states to refer to a car insurance program that makes it possible for policyholders to receive reimbursements and to recover monetary losses from their own insurance provider, regardless of which party caused the accident. Today, there are 12 states and Puerto Rico that have no-fault car insurance laws. Five states have verbal thresholds: New Jersey, Pennsylvania, Michigan, Florida, and New York. The remaining seven states have monetary thresholds: Utah, Hawaii, North Dakota, Kansas, Minnesota, Massachusetts, and Kentucky. Of all these 12, three follow a “choice” no-fault law, meaning they can opt to reject the lawsuit threshold and keep the right to take legal action for any auto-related damages. These three states are Kentucky, New Jersey, and Pennsylvania. Under current no-fault laws, motorists may file legal action for grave damages and for hurt and distress only if the situation satisfies certain criteria. The criteria, known as a threshold, refer to the harshness or level of damage of the injury. The severity of the damage may be described in verbal terms (verbal threshold) or in monetary amounts, the dollar amounts corresponding to medical expenses (monetary threshold).
According to industry experts, the number of fraud cases regarding no fault insurance has risen to a tremendous level and needs urgent attention. In New York, the personal injury protection insurance claims costs were estimated to be $8,748, and amount that is second highest in the US. Insurance providers in New York say that part of the cause of their problem is the legislation made during the end of 2004 ruling that the time estimated for filing claims need to me cut to a minimum. According the these companies, lessening the time needed to filing claims leads to less time taken to inspect and analyze each claim, thus giving opportunities for fraud. For 2009, claims costs went up an astonishing 56% and investigations regarding fraudulent claims have tripled in number.
On the other hand, in Minnesota, a study conducted by the Insurance Research Council reveals that the state had more than 500 insurance claims for personal injury protection. Bulk of the costs of which, roughly 58%, were bills from chiropractors, and only 11% and 19% respectively represent physical therapists and physicians’ bills. While much of Minnesota’s data doesn’t necessary lead to fraud, it still shows an astounding number of increases in claims that provide room for investigation.