NYSID Announces Changes in No-fault Arbitration

New York State Insurance Superintendent Gregory V. Serio announced a major reform package for the State’s automobile no-fault insurance arbitration program, designed to expedite settlement of insurance disputes, reduce abuses to the system by health providers and attorneys, and compel more efficient and effective management of claims by insurance carriers.

The NYSID hopes the reforms will “dramatically reduce the inventory of cases that currently resides in the automobile arbitration system, and will prevent such backlogs from recurring in the future.”

“These new procedures will expedite the no fault arbitration process and ensure timely turnaround of all requests. Additionally, it will curb the abuses perpetrated against the system by those who have chosen to use it as a vehicle for their own personal gain,” stated Serio.

The NYSID has been investigating the arbitration process for much of this year with the objective of determining the causes of the explosive growth in claims filed with the system. It found that much of the delay is attributable to inefficiencies built in to the existing mechanism for resolving disputes and a deluge of claims being brought by health care providers. “Somewhere along the way, this system turned into a bill collection agency for health care providers instead of a program for helping people injured in automobile accidents,” added Serio. We intend to restore the process to its original purpose–that of expediting insurance recoveries for New Yorkers.”

The plan listed the major reforms, as follows:

– Consolidating cases arising out of same event and cases with the same litigant to reduce fraud and abuse;
– Reviewing all arbitration requests thoroughly when received to ensure completeness and accuracy will improve processing speed and efficiency;
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Requiring earlier submission of all forms and supporting evidence will result in quicker dispute resolution;
– Imposing costs of arbitration on applicants when an arbitration request is frivolous will deter abuse of the arbitration system and reduce caseloads;
– Conducting expedited hearings for injured claimants and health care providers that submit bills within 90 days of denial or nonpayment will rapidly resolve disputes for injured and out of work claimants and conscientious physicians, and – Direct fraud referrals by arbitrators, requiring new health care provider assignment forms, and producing original assignment forms at hearings will fight fraud and decrease the cost of automobile insurance for all New Yorkers.

Serio also noted that the number of no-fault arbitrators has been increased by 75% since last May and indicated that insurers will be required to hire additional staff to meet the needs of the arbitration system and all insurers will be mandated to develop action plans to address their entire pending inventory of arbitration cases in a prompt and efficient matter.