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NEW YORK, NY -- Feb. 1 - One in four New York no-fault claims appears to involve some form of fraud and abuse, according to a new study by the ÐÓ°ÉÔ­´´ Research Council (IRC). Without meaningful reform, New York is likely to overtake New Jersey as having the highest auto insurance rates in the country.

Fraud rings, employing dishonest attorneys, doctors and alternative medical professionals, continue to stage phony accidents and inflate claims by charging for unnecessary or non-existent medical treatments and supplies. In fact, nearly two million dollars is stolen from honest drivers each day, says the ÐÓ°ÉÔ­´´ Information Institute. (I.I.I.)
In existence since 1974, New York's no-fault system is designed to speed up the payment of medical bills for those injured in auto accidents. By eliminating the need to sue and "find fault" before medical bills will be paid, the system was supposed to reduce insurance costs. Unfortunately, criminals are using the compassionate intent of this law to bilk money from the system.

Under the current no-fault medical system, (sometimes called personal injury protection or PIP) criminals have 180 days to submit medical bills after an accident, while insurers have only 30 days to pay or deny a claim - even if there is a strong suspicion of fraud. This allows criminals to conceal fraud and abuse in piles and piles of paperwork.

The insurance industry supports no-fault reforms that would make it more difficult to steal from the system, while not reducing benefits to those who are injured or slowing down payments to honest policyholders, medical providers and attorneys.

Meaningful reforms in New York must include:

• Requiring medical providers to submit no-fault bills to their insurance company within 45 days.
• Establishing flexible medical treatment guidelines to reduce inflated billing of injuries and eliminating phony or dubious medical treatments. Injured claimants would retain the right to be treated by any medical provider who handles no-fault auto accidents.
• Giving insurers more time to investigative claims where there is a strong suspicion of fraud. Currently, they have only 30 days to determine if an auto claim is fraudulent.
• Increasing penalties for those convicted of no-fault fraud. This would include making it a felony to be found guilty of being a "runner" or the facilitator in a no-fault scheme. In addition, medical professionals found guilty of claim fraud would be "decertified" and no longer able to bill no-fault when treating patients injured in auto accidents.
• Making arbitration mandatory in disputed no-fault claims.

The IRC reported that fraud is highest in the metropolitan New York area - far exceeding the rest of the state and the country. The borough with the most fraud and abuse is Brooklyn with Queens and the Bronx close behind.

While New York City has the lion's share of the fraud mills, this crime affects drivers throughout the state. According to the I.I.I., it added $81 to the cost of insuring a car in 2001 and, unless the loopholes in the system are fixed, honest drivers could be paying an additional $300 to insure their vehicles by 2005.

No-fault fraud not only hits drivers in the wallet. It also increases the likelihood that honest individuals can become the target of a staged accident. This frightening crime can result in serious injury and the identity theft of the victim.

More information on no-fault fraud can be found in the I.I.I.'s report, No-fault Medical Fraud in New York State: Problems and Solutions at . A recent study by the IRC, Claiming Behavior in New York's No-Fault Auto ÐÓ°ÉÔ­´´ System is available at

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