New York State No-Fault Initiative to Investigate and Ban Physicians who Engage in Fraud

Health Law Bulletin

New York State No-Fault Initiative to Investigate and Ban Physicians Who Engage in Fraud

March 30, 2012

On March 8, 2012, following the announcement of several significant fraud prosecutions, Governor Andrew M. Cuomo unveiled a New York State initiative to stop fraud and abuse in the no-fault insurance payment system.  As part of this initiative, the New York State Department of Financial Services (the "DFS") is issuing a new regulation that enables the DFS to ban a physician from New York's no-fault insurance system if the physician engages in fraudulent medical practices.  The regulation implements a 2005 law that gives the DFS the power to regulate doctor participation in the system.

In addition to the new regulation, the DFS has identified 135 medical providers whose no-fault billing practices have raised concerns and, as part of an on-going investigation, the DFS has sent letters to these providers demanding information about their practices, including their corporate structure and their payment requests.  Failure to answer the letters within 14 days could automatically lead to the medical provider getting banned from the no-fault system, the department said.  The DFS will use the information provided in response to these letters to conduct hearings to determine whether a provider should be barred from participation in the no-fault insurance system. “The state has no tolerance for medical providers or doctors ripping off the system,” said Gov. Cuomo. “This affects all New Yorkers because we all pay the consequences with higher insurance premiums, and that’s why I asked the Department of Financial Services to take this action.”

The DFS will also provide a list of any providers suspected of fraud to the New York State Department of Health and the New York State Education Department.  These departments may use the information collected by the DFS, as well as information collected by their own investigations, to determine whether to revoke the medical license of a provider who has committed fraud.  Further, law enforcement may determine that criminal charges should be filed against a provider who has engaged in fraud.

Please contact Gary Fields at (516) 944-8200 if you have any questions or if you require assistance.

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