BILL NUMBER: S3550
SPONSOR: BRESLIN
 
TITLE OF BILL:
An act to amend the insurance law, in relation to providing for the use
of treatment guidelines under the comprehensive motor vehicle repara-
tions act
 
PURPOSE:
To eliminate fraudulent and unnecessary medical treatment in the
no-fault system.
 
SUMMARY OF PROVISIONS:
Section 1 of this bill would require the establishment of treatment
guidelines for medical treatment provided under the no-fault system.
Section 2 of this bill would provide an expedited process for the resol-
ution of disputes regarding deviations from the treatment guidelines.
Section 3 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 involving fraudulent medical clinics (medical mills). One of the
reasons why medical mills proliferate in New York is because New York's
no-fault system makes it very easy to bill insurance companies for frau-
dulent and unnecessary treatment. This bill would remedy this situation
by establishing guidelines for the treatment of various injuries common-
ly sustained in automobile accidents.
Treatment guidelines have been adopted in New Jersey for its no-fault
system and in New York for the workers compensation system. Treatment
guidelines are a valuable tool in preventing the fraudulent overutiliza-
tion of unnecessary medical treatments. Treatment guidelines are
evidence based standards of care and best practices for the medical
treatment of injuries which ensure that claimants receive the highest
duality medical treatment. In the workers compensation context, the
guidelines were initially developed by the Governor's Workers' Compen-
sation Reform Task Force and its advisory committee comprised of well
credentialed medical professionals and other interested parties. This
bill would require similar scientifically based guidelines to be devel-
oped for the treatment of injuries commonly resulting from auto acci-
dents. These guidelines would ensure that auto accident victims would
receive the best care for their injuries and, because the guidelines set
forth clear standards for treatment, they would significantly reduce
fraud and abuse in the no-fault system. Establishing treatment guide-
lines would go a long way toward putting an end to medical mills in New
York State.
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 60.1
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. Establishing treatment. guidelines for the no-fault system
would assist in reducing fraud in the no-fault system and the costs
associated with fraud.
 
LEGISLATIVE HISTORY:
S.4047 of 2021-22;
S.3514 of 2019-20;
S.780 of 2017-18;
S.2370 of 2015-16;
S.3546 of 2013-14;
S.6706 of 2011-12
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
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.

Statutes affected:
S3550: 5108 insurance law, 5106 insurance law