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Governor Cuomo Announces First Round of 18 Doctors and Other Health Service Providers Banned from Abusing No-Fault Auto Insurance System

Press Release

Location: Albany, NY

Governor Andrew M. Cuomo today announced that his Administration has banned a first round of 18 doctors and other health service providers from billing New York's no-fault auto insurance system as part of an extensive and ongoing Department of Financial Services (DFS) investigation. This action is part of the Cuomo Administration's statewide initiative to stop fraudulent health service providers and medical mills that abuse the no-fault insurance system, and cost New Yorkers hundreds of millions of dollars in unnecessary insurance costs.

"Defrauding the State's no-fault auto insurance system is illegal and drives up costs for honest drivers across the state, and my administration simply will not allow such actions to go unpunished," Governor Cuomo said. "Doctors and medical service providers who conspire to abuse the system should know that New York State is watching and will not hesitate to take appropriate actions to shutdown fraud when it occurs."

Benjamin M. Lawsky, Superintendent of Financial Services, said, "No-fault auto insurance fraud drives up costs for every single New Yorker on the road. A dirty doctor is typically the key ingredient in these schemes and cutting them out can have a major impact. Our investigation is continuing and other doctors should think twice about the consequences before trying to rip off the no-fault insurance system."

An ongoing DFS investigation has uncovered evidence of doctors and other health service providers giving unnecessary treatment to car accident victims, billing insurers for unnecessary treatment or treatment that was never provided, and "renting" their taxpayer ID number to fraudulent medical practices run illegally by laypersons who submit fake bills to insurance companies. Without the doctors and other providers, these schemes cannot work.

Last year, Governor Cuomo announced a statewide initiative to combat no-fault insurance fraud. As part of that initiative, DFS issued regulations enabling it to ban health service providers who engage in illegal or dishonest practices or fail to respond to the Department's inquiries from billing the no-fault system. Today's action is the first ban under that regulation. DFS is collaborating with law enforcement officials on these and other cases.

The no-fault insurance law was designed to lower insurance premiums and make it easier for accident victims to receive medical treatment, regardless of who is at fault. Usually, no-fault insurers pay health service providers directly, assuming that a licensed health service provider administered the treatment and the treatment was necessary. However, abuse of New York's no-fault auto insurance system has helped drive up auto insurance premiums for consumers.

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