ALBANY, N.Y., Sept. 15 /PRNewswire-USNewswire/ -- Excessive billings by medical mills, fraudulent companies that provide few if any real health care services to the public, are a key factor in driving New York State's no-fault automobile insurance fraud crisis. New data shows the problem with medical mills' excessive treatment is growing, according to the New York Alliance Against Insurance Fraud (NYAAIF).
Think about this next time you write a check for auto insurance or deliver a policy to a client. A large chunk of the premium goes to cover the cost of criminal activity. Unfortunately, this is an old story here in the Empire State. Organized crime is making a bundle off fraud in the no-fault system. Someone recruits someone to stage an accident, and that someone goes to someone else for "medical treatment", and that someone reports 10 tests on the bill to the auto insurer when maybe he actually only did one. And every participant in this dance gets a little piece of the action, and heck, they're only screwing insurance companies, so who cares, right?
Well, they're not only screwing insurance companies because most insurance companies are not non-profit organizations. They want to recover their costs and then some. Their stockholders have kind of come to expect it (mutuals are another story, but they have revenue pressure as well.) So, if no-fault fraud is raising their costs, and they can invest the premium money and make a whopping 0.5 percent interest, they have little choice but to get revenue from their customers. So we all pay for the ruthless, immoral actions of common thugs.
IIABNY, along with its partners in the New York First reform coalition, has been lobbying the New York State Legislature for years to enact serious no-fault reform. If acting as a "runner" (the person who recruits the participants) was a felony, and if companies had more time to investigate potential fraud, and if arbitration of disputed claims was mandatory, and if there were written medical protocols for treatment of no-fault injuries, the numbers the NYAAIF described in this release might shrink. And that would be good for everyone who uses a car in New York.
Until that happens, we can continue cheerfully handing over our money to the medical mills and the crooks who are backing them.
UPDATE Sept. 27, 2010: Say what you will about Geico (yes, their ads are so ubiquitous that I sometimes feel like the sound of one more will inspire me to stick sharp objects in my eyes and ears,) but they are putting their money behind the fight against no-fault fraud. Good for the gekko! I hope their lawsuits are successful.