The Wild West on the East Coast: How the Fix Known as “No-Fault” Turned New York Into the O.K. Corral
Howdy! Did y’all come to hear about the virtues and triumphs of New York State No-Fault? Well sit on down and warm yourself by the fire, while I tell you the story of how a new little law gave way to greed, corruption and the white knights, known as Defense Counsel!
Introduced in 1974, New York State’s No-Fault insurance system, controlled under Regulation 68 or 11 NYCRR Part 65, otherwise known as “the Regs,” quickly became the foundation of how auto accidents were dealt with and how compensation was disturbed. The Regs were meant to provide quick and efficient coverage for medical expenses, lost wage, and other such claims for reimbursement post-auto accident: all without the need for drawn-out legal battles. However, over the decades since its inception, and with the many amendments to the Regs, multiple dusty trails for deceptive practices have been uncovered. Originally what was intended as a streamlined method to process claims and have parties taken care of has become a standoff of the highest order.
No-Fault law was created with certain tenets in mind which aim for the swift processing of claims. Two such tenets are that (1) claims be processed with haste and (2) the parties involved work together, amicably. While the basic and establishing principle of No-Fault law was always to ensure that auto accident victims received timely compensation for medical bills, etc., those who have taken on the practice seem to break into one of two groups: the lawmen who try to protect the public (Defense Counsel) and the outlaws trying to disturb the peace (Plaintiff’s Counsel).
While it may be true that those seeking medical treatment are oft seen and treated without haste or worry, the trouble starts when the bad eggs from the medical field roll into town, enlisting Plaintiff’s Counsel firms to perpetrate their nefarious plans. For every provider properly billing and treating patients, you will find a bad actor hiding in the herd, causing chaos and frustration throughout. One may ask themselves, “But, how can just a few bad actors affect an industry?” In the simplest of terms, any Defense Counsel worth their boot leather would say, “The premiums.” You see, it is our job to protect our clients’ interests. When our job is done well, we are able, as Defense Counsel, as lawmen, to keep the bad providers out of our town. By analyzing the cases we are assigned, and by recognizing the tell-tale signs of fraud and overbilling, we protect our clients from paying out claims they would not otherwise have to; thus, saving them in exposure. This is repaid to the good citizens of our settlement, to those who enlist the protection of the insurance carriers, by allowing them to have affordable premiums and, in turn, allows them to feel protected by the coverages they pay for.
While No-Fault may have been started with good intentions, it has taken a handful of bad eggs, acting with greed in mind, to try and exploit the entire system. For as good as Defense Counsel may be, those who seek to defraud our clients are just as skillful. Our adversaries know how, and when, to file suit against the insurance carriers. They know in what venue and in what order to file their suits. They have adapted to the amendments in the Regs, learned each carrier’s style of doing business, and they know how, and when, to best overload each carrier. They know that they can file a case on the last day before the statute of limitations (six years from when the claim accrues) and still have many years before any court will take up the case. These methods cost the carriers hundreds of millions of dollars annually, resulting in higher premiums and a lower quality of medical care.
On one side, the bad-acting providers, seeking to force cases to trial, overburdening the carriers and courts with superfluous motion practice or, even as insidious, failing to respond to Defense Counsel’s requests to resolve the matter in a timely fashion.
The other side, the Defense Counsel, tired, ever-fighting, working to make the town safe for those just seeking a better quality of auto insurance coverage.
Effectively, we are locked in a daily standoff. However, it does feel like a victory whenever we can resolve a case. We close a case and get a little closer to what No-Fault is really about.
Matthew is a member of the Fraud/Special Investigation Practice Group, where he defends against intentional/staged losses, as well as medical provider fraud. He has vast experience conducting Examinations Under Oath/Depositions.
SIU Spotlight, Issue 1, Vol. 1, July 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2024 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.