senate Bill S3545

2013-2014 Legislative Session

Relates to fair claims settlement practices under the comprehensive motor vehicle insurance reparations act

download bill text pdf

Sponsored By

Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

do you support this bill?

Actions

view actions (2)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to insurance
Feb 05, 2013 referred to insurance

S3545 - Bill Details

Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยง5106, Ins L
Versions Introduced in 2011-2012 Legislative Session:
S6707

S3545 - Bill Texts

view summary

Relates to fair claims settlement practices under the comprehensive motor vehicle insurance reparations act.

view sponsor memo
BILL NUMBER:S3545

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
equitable

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.

Section 2 of the bill is the effective date

JUSTIFICATION: On February 29, 2012, the Manhattan U.S. Attorney
announced the indictment of 36 people for participating in a 5279
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 arc 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.6707 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.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3545

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 5, 2013
                               ___________

Introduced  by  Sen.  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 ASSEM-
BLY, 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 PARA-
GRAPH ONE OF SUBSECTION (A) OF SECTION FIVE THOUSAND ONE HUNDRED TWO  OF
THIS  ARTICLE WERE MEDICALLY NECESSARY AND IN ACCORDANCE WITH THE APPLI-
CABLE FEE SCHEDULE. EVIDENCE OF MAILING A CLAIM FORM SHALL NOT BE SUFFI-
CIENT TO MEET THIS BURDEN.
  S 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.
                                                           LBD08135-01-3

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.