The insurance industry called for widespread personal injury protection (PIP) insurance reform to Minnesota’s no-fault auto insurance laws during a House legislative hearing Nov. 13.
The House Commerce Committee is holding hearings following several high profile insurance fraud indictments in the Twin Cities area. To address the increasing problem in Minnesota, the National Association of Independent Insurers put together a PIP reform group this summer to develop a series of legislative initiatives. If Minnesota enacts reforms it will join other states such Florida and New York that have recently adopted PIP reforms to address fraud, abuse and over utilization of medical benefits.
The NAII is urging Minnesota legislators to consider a comprehensive package of reforms that will strengthen the investigation and prosecution of insurance fraud as well as address arbitration reform, adoption of a medical fee schedule and other cost containment measures.
NAII is proposing an arbitration reform that automatically send disputes exceeding $10,000 to the court system. This would prohibit claimants from filing for arbitration while the claim is under the $10,000 threshold and then continuing to file charges that ultimately exceed the cap. In addition, NAII is looking to end balanced billing. This reform would protect consumers and insurers from being targeted with bills that the insurance company has found to be unreasonable.
NAII’s reforms call for the adoption of a medical fee schedule that would clearly define appropriate charges for specific services. Minnesota’s workers’ compensation system currently uses a fee schedule and it has proven effective in controlling costs. Another major reform being proposed would reduce the time that claimant and medical providers have to file a claim to an insurance company. By requiring more timely presentation of bills, insurers would be able to put together more thorough investigations and reduce fraudulent charges.
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