What's happening
This bill requires motor vehicle insurance claimants to prove medical expenses were necessary and follow fee schedules, not just submit claim forms.
Why it matters
Raises the standard for insurance claim approval. Claimants must now actively demonstrate that their medical expenses were both necessary and billed according to regulated fee schedules, rather than simply submitting a claim form. This shifts more responsibility onto individuals seeking reimbursement.
Could reduce fraudulent or excessive claims. By requiring proof of medical necessity and adherence to fee schedules, the bill aims to limit overbilling and prevent payments for unnecessary treatments, potentially lowering costs for insurers and, indirectly, policyholders.
Applies retroactively to ongoing cases. The legislation will not just affect future claims, but also any existing court cases where a trial has not yet started, possibly impacting claimants who were relying on previous, less stringent rules.
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Who cares
Headline styles
Tougher Car Insurance Claims
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3511
2019-2020 Regular Sessions
IN SENATE
February 8, 2019
Introduced by Sens. BRESLIN, SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to settlement practices under the comprehensive motor vehicle reparations act
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (a) of section 5106 of the insurance law is amended by adding a new undesignated paragraph to read as follows:
The claimant has the burden of proof to show the expenses under paragraph one of subsection (a) of section five thousand one hundred two of this article were medically necessary and in accordance with the applicable fee schedule. Evidence of mailing a claim form shall not be sufficient to meet this burden.
§ 2. This act shall take effect immediately and shall apply to all actions and proceedings commenced on or after such date; and shall also apply to any action or proceeding which was commenced prior to such effective date where, as of such date, a trial of the issues has not yet commenced.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09653-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to settlement practices under the comprehensive motor vehicle reparations act
Purpose
To make burden of proof requirements in no-fault disputes more equita- ble.
Summary of provisions
Section 1 of this bill would make burden of proof requirements in no-fault disputes more equitable by requiring a medical provider to submit more than just a claim form to establish a prima facie case.
Read the full memo (641 words)
Section 2 of the bill is the effective date.
Justification
On February 29, 2012, the Manhattan U.S. Attorney announced the indict- ment of 36 people for participating in'a $279 million no-fault fraud scheme. Inequities in the current burden of proof requirements for no-fault cases are one of the reasons why no-fault fraud organized crime schemes such as this are able to operate and increase auto insurance costs for New York consumers.
Our civil legal system generally places the burden on the plaintiff to prove the basic elements of their case in order to prevail. Over the years, however, in the no-fault context, case law in New York has shift- ed that burden of proof entirely to the insurer to the point where a medical provider (as an "assignee" under an "assignment of benefits") needs only to provide a bill to establish a claim for benefits. The burden is on the insurer to request information to "verify" that the services billed for are medically necessary and in accordance with the no-fault law. Frequently, a lengthy exchange of paperwork ensues. This off-kilter burden of proof requirement has made it easy for medical mills and no-fault fraud crime rings to flood insurers with bogus lawsuits in order to make it cost prohibitive for insurers to defend these numerous lawsuits and force the insurers to settle and pay non- meritorious claims.
No other state which has a no-fault system has burden of proof require- ments such as currently exist in New York. Every other jurisdiction requires the medical provider bringing the lawsuit to establish that the service was medically necessary, causally related to the motor vehicle accident and properly billed. New York case law in this regard is completely anomalous to the authority in every other no-fault jurisdic- tion. This difference in New York is one of the reasons why New York is so attractive to fraud rings who want to bilk the system and steal from honest New York drivers. This bill would make burden of proof require- ments in the no-fault context more equitable and more in line with other states by requiring the medical provider to present information that the services billed are medically necessary and billed in accordance with the applicable fee schedule.
New York's no fault system is plagued by fraud and abuse which is adding significant costs to auto premiums in New York and a major contributing factor making New Yorkers pay among the highest auto insurance premiums in the nation. In fact, a recent Insurance Research Council study found that in the New York City area, about one in every five no-fault auto insurance claims closed in 2010 appear to have elements of fraud. In addition, New York's no-fault claim costs have far outpaced that of other no-fault states and the overall cost of medical care. From 2004 through the 2nd Quarter of 2010, the average PIP claim cost rose 60.4 percent in New York, nearly 42 points faster than the 18.6 percent growth rate in the Consumer Price Index cost of medical goods and services found in the region. The cost of no-fault personal injury protection (PIP) coverage has also soared. New York's average no-fault PIP claim cost $9,007 is the third highest in the nation as of 2nd quar- ter 2010.
Legislative history
S.770 of 2017-18; S.2368 of 2015-16; S.3545 of 2013-14; S.6707 of 2011-12.
Fiscal implications
None.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.