New York State Targets Doctors Involved in Auto Insurance Fraud

In the wake of an epic car-insurance scam, New York state officials are preparing to crackdown on doctors who loan their names to clinics that are nothing more than billing mills.

New York Superintendent of Financial Services Benjamin Lawsky said he plans to zero in on white-collar criminals in white coats within a month.

A rigorous statewide initiative is underway to close medical offices billing for services that are either wholly unnecessary or never rendered to auto accident victims. Under the new regulation, physicians engaging in unscrupulous billing practices to siphon funds from New York’s personal injury protection (PIP) system will ostensibly turn themselves into pariahs, at least in the professional sense.

The Department of Financial Services has already identified 135 medical providers whose billing practices have raised concerns regarding possible no-fault fraud through audits and information obtained from law enforcement and insurers. As part of an ongoing investigation, letters are being sent to all 135 medical providers demanding a response and information. According to the department, failure to answer the letters may automatically lead to the medical provider being banned from the no-fault system.

The Federal government in March charged 36 people in a massive $279 million scheme to bilk New York insurers out of the state's PIP no-fault benefit. The fraud is alleged to have started in 2007 and continued until discovered last year. The organization allegedly scammed the medical system by having doctors prescribe physical therapy, acupuncture and chiropractic treatments as many as five times a week.

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