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May K. Toney
08-03-2003, 11:49 PM
Worsening Claim Trends

Fraud Behind Worsening Claim Trends in Metro NYC Triggering Surge in New York No-Fault Costs, Study Reports

MALVERN, Pa.- Soaring injury claims in the New York metropolitan area, far exceeding those in the rest of New York State and the country, suggest an increase in no-fault auto insurance fraud that threatens to make New York auto insurance rates the nation's highest, according to a new study of personal injury protection (PIP) insurance claims in New York State prepared by the Insurance Research Council (IRC).

The average amount paid for personal injury protection claims jumped 20 percent in New York in the year 2000, in contrast to 6 percent in other states, including New Jersey, that also have no-fault systems. This increase is five times the medical care inflation rate for metropolitan New York. The frequency of claims rose 7 percent in New York, while declining 2 percent in other no-fault states.

According to the IRC study, one in four New York PIP claims appeared to involve some kind of fraud or buildup, either the exaggeration of medical expenses, unnecessary treatments, or padding claim-related costs. This report compares private passenger auto claim patterns for New York State and New York City with national no-fault trends and the results of previous IRC studies.

In every category, claim patterns within metropolitan New York City drove insurance costs significantly higher than in the rest of the state. Trends pointing to increased claims abuse and fraud were particularly high in Brooklyn and, to a lesser extent, in Queens and the Bronx.

The IRC study found that behavior patterns were dramatically different among New York City-area claimants than among their upstate counterparts. Compared with the rest of the state, New York City claimants:

Reported more injuries, particularly neck and back sprains and strains. Forty-seven percent reported three or more injuries, twice the statewide average.

Were more likely to seek treatment from a larger number of medical professionals, including chiropractors, neurologists, physical therapists, psychotherapists, and alternate treatment providers, and were less likely to be treated in hospitals.

Received diagnostic procedures using magnetic resonance imaging (MRIs) and electromyography (EMGs) more often than their upstate counterparts - and more than once.

Hired attorneys at nearly four times the rate of the rest of the state.

Were two to three times more likely to wait more than 30 days before reporting injuries to insurance companies.

Were two times more likely to have more than 45 days pass before medical bills were submitted to insurers for payment.

These last two patterns are potentially important contributors to no-fault auto fraud, since current rules within New York allow 90 days for claimants to report injuries and 180 days to submit medical bills. Insurance companies, on the other hand, have only 30 days to pay claims, even if fraud is suspected, or face legal action for bad-faith claims practices. Reforms to tighten New York's no-fault system and deter fraud and abuse are pending before the state legislature.

Not surprisingly, given these increases in medical utilization, average payments on behalf of New York PIP claimants have increased significantly since 1997, according to the new study. The average payment for New York City PIP claims in 2000 was $6,898 - up 17 percent on an annualized basis since 1997. That compares to just a 6 percent annualized increase in the rest of the state. These increases are both striking given the 3.9 percent annualized increase in the rate of medical care inflation.
"This data quantifies many of the sources of the dramatic run-up in New York claims costs in recent years," said Elizabeth A. Sprinkel, senior vice president of the IRC. "The extraordinarily high use of medical resources, especially in the New York City area, is creating a crisis in the New York no-fault system. Also, the data raise serious concerns about the extent of fraud among New York PIP claims."

These findings are contained in a recently completed IRC study, Claiming Behavior in New York's No-Fault Auto Insurance System: An Analysis of Closed PIP Claims, that examines detailed claim information from more than 2,800 claimants whose claims were closed with payment in 2000. Twelve insurers, representing more than half of the New York private passenger no-fault market, participated in the study.

New York PIP Charts

For more information, contact Elizabeth Sprinkel by phone at (610) 644-2212, ext. 7568; by fax at (610) 640-5388; or by e-mail at irc@cpcuiia.org. Or visit IRC's Web site at www.ircweb.org. Copies of the study are available at $35 each in the U.S. ($50 elsewhere) postpaid from the Insurance Research Council, 718 Providence Rd., Malvern, Pa. 19355-0725. Phone: (610) 644-2212, ext. 7569. Fax: (610) 640-5388.

May K. Toney
08-03-2003, 11:53 PM
There was such a discussion about fradulent auto and PI claims in another thread, I thought this story and website might be beneficial to those interested in learning some facts about insurance claims. The website is an excellent site for information of this type and you might try claimspages.com. as well.

Richard S Wagner
08-04-2003, 06:41 AM
Kay,

I agree that fraud is on the rise and is getting out of control. There are other types of fraud such as: telemarketing fraud, internet fraud, against businesses, frauds against the elderly, etc... To learn more about these types of fraud and tips to minimize/prevent them from happening to you, see www.fraud.org

Insurance fraud is also a major problem. This is one of my main areas of interest in private investigations. As a former auditor looking for a career-related career change, this is an ideal field to pursue. My goal now is to pursue anything related to claims examining/adjusting to further my knowledge and expertise in this exciting and expanding opportunity. You can also get additional information about insurance fraud at www.insurancefraud.org

It is time that we all actively stop fraud. The best way to fight fraud is to be aware of the various types of fraud, learn how to protect ourselves from them and to report all fraudulent activities.

-Richard Wagner

Kathleen Padgett
08-04-2003, 07:30 PM
I'm sure this is exactly why NH law states there's no such thing as a no fault accident here. One involved party must assume or be deemed at fault. It's interesting how many variables there are depending upon which state you are in.

Thanks for the sites, will check them out later for additional info. Insurance fraud investigations is one of the areas of specialty where I am interested in developing my knowledge and skills.

May K. Toney
08-05-2003, 07:47 AM
Hello Richard,
I agree that the best way to counteract fraud is to know of it's existence and the types involved. I appreciate the links too.

It's interesting that you are an auditor with an interest in claims adjusting/investigation. My primary career has been claims management but now I'd like a State/Public Claims Adjudicator job. I look forward to talking with you further.What was your area of specialty? Well, if I can help you in any way, just ask.

Hi Kathleen,
How wonderful that we share common interests. When I started out in claims, I was fascinated by all there is to learn. Several years later, I still love the investigations aspect of the job. I'm sure you'll love it!

Richard S Wagner
08-05-2003, 08:57 AM
Hello May,

I have not been a full-blown Auditor since 1987, but I have performed many audit-related functions while working as a Telecommunications Specialist, Email Administrater, Income Tax Reviewer, etc...

My past experiences were in compliance and operational audits. Examples include: making sure daycare providers where not charging for meals when the students were absent, exceeding their licensed capacity, serving enough milk or they will pay a milk fine, etc... Also while conducting contract audits, had to verify that the expenses were reasonable, allowable and necessary.

I have no experience in claims except for filing for reimbursements. I did have a Life/Health insurance license in Kentucky about eight years ago, but did not like the idea of selling insurance. However, claims examining/adjusting/investigating is more ideal to my auditing background espically when it comes COMPLIANCE. Plus, it requires you to be detailed-oriented, analytical, a problem solver, etc...

Lastly, I am looking for a new beginning. I have been blessed with a second chance in marriage, a new child and hopefully a new long-term career in private investigations.

Diane Jarosz
08-05-2003, 11:03 AM
Hi Richard,
I have just been to DJTHE Insurance Fraud site and joined up.
Thank you for the site.
Many different avenues to visit there.

DJ

May K. Toney
08-05-2003, 10:46 PM
Originally posted by Richard Schaadt Wagner
I have no experience in claims except for filing for reimbursements. However, claims examining/adjusting/investigating is more ideal to my auditing background espically when it comes COMPLIANCE. Plus, it requires you to be detailed-oriented, analytical, a problem solver, etc...

Lastly, I am looking for a new beginning. I have been blessed with a second chance in marriage, a new child and hopefully a new long-term career in private investigations.

Good evening Richard,
Thank you for sharing some of your auditing experiences with me. You've enjoyed a wonderful career along with many blessings in your personal life. Congratulations on your marriage and new born.

I'm sure you know that there are many types of claims. In fact, it always irritated me that medical providers refer to their bills as "claims" too. My workers' compensation claims career began in 1986 (can you believe the coincidence?) and has lasted for almost 18 years. It is a fascinating field with lots of growth potential but, depending on the particular field, the burn out rate can be quite high.

I learned my trade on-the-job and, for several years, I knew nothing about all the formal education and designations there are. I don't know what particular type of claims career you seek. If you're interested in work comp, check with your local Chamber of Commerce or http://www.bls.gov/oco/ (the Occupational Handbook website). Workers' Compensation is a state benefit so any website such as gov.com should have information regrading this statute. Each state has their own Workers' Compensation Act so check with your State office for additional details.

I have no clue how to break into other types of claims. However, you might go to Ask Jeeves.com and search under insurance companies or claims investigations companies. That should give you a list of the companies that provide claims management and/or investigative services.

I hope this information gives you a place to start. Let me know if there's anything else I can do. Best wishes.

Cynthia Ford
08-06-2003, 08:21 AM
Originally posted by May K. Toney


Good evening
May, is your email working?

Please click on the following private message topic directed to you:

http://www.ipiu.org/forums/showthread.php?s=&threadid=10297

May K. Toney
08-06-2003, 02:04 PM
Originally posted by Cynthia Ford
May, is your email working?

Please click on the following private message topic directed to you:

http://www.ipiu.org/forums/showthread.php?s=&threadid=10297
Hello Cynthia,
It seems that working 30 hours straight on my computer has its downfalls. I actually fell asleep at the keyboard in the middle of responding to an IPIU email. My apologies. I have now read the message and responded accordingly.

Thank you for the wake up call. Enjoy the day.

Michael Runner
06-08-2004, 03:25 PM
Another type of fraud that we are facing in Texas is related to Mold claims. I had a contractor tell me this insurance adjuster told him to " tack on a little extra" because it was an insurance claim. This made me angry because in the end that little extra his was tacking on would ultimately come out of my pocket.