Legislative News


* Michigan’s “PIP for life” auto system has incited rampant fraud and abuse with fake whiplash claims since its beginning. The Senate passed a promising reform bill last week that would install an automobile fraud prevention authority funded by insurer assessments. This measure offers the best odds of filling Michigan’s yawning enforcement gap, and heads to the House for debate. The bill is streamlined. It focuses more on creating the state agency rather than getting bogged in the swamp of hotly contested no-fault reforms being debated in Lansing. That makes the bill a positive, bipartisan anti-crime measure. It thus attracts far fewer special-interest groups who’d like to torpedo it. The legislature stays in session through 2018, so there’s still time for Lansing to do every motorist a big favor and enact the much-needed anti-fraud agency. Caveat: This being an election year, many legislators will keep a low profile and focus on keeping their jobs in November.

* Professional designations such as IASIU’s respected CIFI help raise the skills of fraud fighters, and thus contribute notably to the fraud fight. Recent bills in Louisiana and Missouri, however, raise questions about whether such badges of pride and achievement are coming under attack. The challenge first arose in Louisiana this spring. A bill would’ve imposed state oversight of any designation using the term “certified.” The bill was quickly amended to remove the provision, then was signed by the governor. The issue seemed closed until Missouri’s governor quickly signed a similar oversight bill. It’s less-restrictive than the original Louisiana proposal. IASIU Chapters in Louisiana and Missouri fought the proposals. Members wrote their lawmakers, voicing strong opposition to restricting the IASIU certification process and hence anti-fraud efforts. Still, even putting such bills into play could invite intrusive state oversight of anti-fraud designations and training in other states if the concept takes hold. The Coalition and IASIU will vigorously oppose future measures in any state where they arise.

* Iowa’s legislature adjourned with the governor enacting 2 anti-fraud laws, though falling short with workers comp-fraud reforms. On the plus side, insurers victimized by scams now can seek restitution from criminally convicted fraudsters. Another bill would fund a full-time prosecutor and investigator for the state fraud bureau. The laws will add new layers of private-state enforcement against fraudsters. Both measures were Coalition-backed. Lawmakers also left the capital with 4 workers-comp fraud bills still on the table. The state enacted major comp reforms last year, and the appetite for another large round may have waned in 2018. The Coalition expects the comp reforms to resurface in 2019.


* Roofer reforms in New York took big steps forward this week, though the bill still faces an uphill slog with time running out on the 2018 session. The measure would impose important consumer protections on deceitful roofers who prey on distressed homeowners. The nation’s roofer association finally agreed to support an amended version after bottling it up with opposition last year. “The National Roofing Contractor’s Association strongly SUPPORTS the bill …,” CEO Reid Ribble wrote to the New York Insurance Association this week. “The measure would place protections in New York law for homeowners who are solicited by fraudulent persons posing as legitimate roof repair contractors.” More good news … the state Assembly passed the bill 135-0 on Monday, and sent it to the Senate. Yet the clock is ticking down to an unofficial recess in mid-June. The Coalition and NYIA will continue to push hard for passage over the next week.

* Unregulated pharmacy benefit managers (PBMs) have grown large and exert too much power over pricing, access and reimbursement for prescription opioids and other drugs, NCOIL’s president Jason Rapert said in a presentation at the Coalition’s midyear member meeting this week in Orlando. Reimbursements for pharmacies are unfairly plummeting under the weight of PBM market power, the Arkansas state Senator contended. Rapert led the charge for PBM reforms in his home state of Arkansas. Momentum also is gathering for reforms around the U.S. Two bills recently were signed by Louisiana Gov. John Bel Edwards. They impose more oversight and regulation of PBMs. PBMs must be licensed by the insurance department. … submit an annual “transparency report” to keep their license … disclose contractual formulary with all health benefit plans or health insurers … and provide timely notification of changes or product exclusions. PBMs control up to 80 percent of all prescription meds dispensed in America. Many states are considering legislation or regulation. Click here for pending PBM bills.


* Roofing contractor reforms in New York reflect the Beatles hit, “The Long and Winding Road.” The measure would let consumers cancel contracts if the insurer says the repairs aren’t needed … forbid contractors to offer inducements to lure homeowners into contracts … forbid contractors to negotiate repairs with insurers. The contractor union blocked a bill in the Senate last year after it cleared the Assembly. But the Coalition and our partner New York Insurance Association worked with the union to broker a consensus bill in the Assembly last week. Reforms thus are on firmer footing in the Assembly, and stand a better chance in the Senate. Still, the statehouse’s primary session closes in mid-June. That leaves a lot of spadework in just 2 weeks. Leadership changes in the Senate plus lack of recent major storms also contributed to the bill’s slow progress in Albany this year.

* Rhode Island is debating an airbag fraud bill introduced by state Rep. Patrick Kennedy, House Speaker Pro Tempore. The bill would make it a specific crime to market or install unsafe knockoffs. The measure had its first House hearing this week. Kennedy’s measure is similar to bills supported across the U.S. by the Coalition and our partner Honda North America in recent years. Counterfeit airbags remain one of the most-dangerous insurance scams. Drivers can’t check for a real or fake airbag after repairs. Usually they find out only when they have an accident. By then it may be too late. Meanwhile, unsavory bodyshops bill insurers full price of $1,000 or more for cheap knockoffs bought on the black market. There’s rarely any objection to protecting consumers from unsafe knockoffs. Yet similar bills fizzled in several states this spring solely from lack of action when sessions adjourned for the year.

* Call it fraud or abuse. Receiving a $15,000-$40,000 bill for an air ambulance ride, and finding out your insurer won’t pay, is something more Americans are facing. Several Coalition partners — including NCOIL, NAIC and NCSL — have adopted model laws, or are looking into “balanced billing” by air ambulance operators as potential consumer fraud. The FAA governs air ambulances operations, leaving states no authority over billing practices. Medicare and Medicaid pay a low but mandatory set rate. Yet most private-pay customers can’t afford the costs. Insured customers thus are billed for transport expenses, plus a disproportionate share of overall air-ambulance operating costs. These fees include pricey equipment and staff, including down time while not producing revenue. Many insurers refuse to pay in part or in full. Policyholders are saddled with collection actions. Consumers need these services when a life-threatening injury or illness strikes. Yet they can’t shop in advance, and often can’t pay the large, surprise invoices. One federal bill, however, passed the U.S. House and is set for Senate hearings. Billings must clearly distinguish between charges for medical services versus air transport. Non-air transport services and prices charged also wouldn’t be governed by the federal Airline Deregulation Act (ADA). This could open the door to state regulation of air-ambulance billing.


* An anti-runner bill is on the march again in New York. The measure would make recruiting patients for bogus crash-injury treatment a 3rd degree felony in New York. The bill recently cleared a state Senate committee. Time ran out last year after the measure passed the full Senate. An anti-runner bill is crucial to stopping crash rings from recruiting real and fake crash victims for bogus whiplash treatment. Addicts also are recruited for bogus rehab. Here’s the rub: Anti-runner bills have stalled in the Assembly for several years while routinely clearing the Senate. Whether the Assembly finally comes to its senses and passes an anti-runner bill remains to be seen. All the while, honest drivers are saddled with some of the nation’s highest auto premiums while staged-crash rings prey on the no-fault auto insurance system.

* States must be fully empowered to oversee new health plans proposed by the Trump Administration, the Coalition insisted in a meeting with federal officials this week in Washington. The measure would authorize so-called Association Health Plans (AHPs), intending to give more Americans access to health coverage. Yet the proposal is ambiguous about the role of state oversight of AHPs. Gaps such as this could incite crooks to sell fake AHPs, the Coalition told the Office of Management and Budget, and U.S. Labor Department. Consumers and employers could be saddled with large and unpaid medical bills. States thus are critical to thwarting phony AHPs. A wave of fake health plans surfaced in 2000-2002. More than 200,000 Americans were stuck with $252 million of unpaid medical bills. A 9-year-old Texan named Bobby Lee Horn had brain cancer, for instance, yet his family’s health policy was phony. The Coalition urged a 5-point plan: clear and unambiguous state oversight of AHPs … full anti-fraud resources and education … federal anti-fraud funding … well-defined coordination among states and feds … annual reporting of progress in combating fake health plans. The Coalition also urged state oversight in a letter to the Labor Department. Coalition members such as the NAIC, NCOIL and NCSL are closely studying AHPs as well.

* Preventing insurance fraud stemming from opioid abuse can start by removing people’s motivation or need for opioids. A preventive bill has passed the California state Senate and heads to the Assembly. The proposal was drafted by the San Diego County DA and introduced by State Sen. Patricia Bates. The bill would mandate continuing ed for opioid prescribers … and increase info on warning labels. It also would impose 2 key requirements for youths: 1) Physicians who prescribe opioids for minors must discuss the risks with the parent or guardian; and 2) youth sports organizations and school athletic programs must distribute written info annually to student-athletes on the risks of opioid use and addiction. The opioid crisis continues fueling insurance fraud through bogus addition rehab. Fake injury claims from auto accidents, slip and falls and workers comp also are key contributors.


* The feds are moving closer to authorizing so-called Association Health Plans — potentially opening the door to fake health plans much like bogus operators who swept through the U.S. in the early 2000s. Numerous groups — including the Coalition — are warning the feds about the high risk of fraud unless the Administration’s proposal fully empowers states to oversee AHPs against fraud. The proposal now has too many loopholes and could invite more fake health plans to take hold. The Coalition wrote the U.S. Labor Department, has been interviewed by reporters, and wrote several articles in influential news publications widely read by policymakers. The Coalition meets with the federal Office of Management and Budget next week to further drive home these concerns.

* Michigan continues tackling no-fault reform, even with statewide offices up for election in November. A Senate bill would reform the  state’s expense-soaked PIP system, and create a badly-needed automobile fraud authority. Insurer assessments would fund the agency. In return, large and small insurers would have seats on the authority’s board, along with various state agencies, law enforcement and at least 1 citizen-consumer. A similar measure is stalled in the state’s House of Representatives. Michigan has no fraud bureau to coordinate crackdowns on widespread auto scams in the state. Michigan also has the nation’s most-generous no-fault system, making it a regular target for phony crash injury claims. Creating an auto fraud authority in a state rampant with PIP fraud is a high Coalition priority. The broader no-fault reforms, however, are contentious. The bill’s fate thus is uncertain in an election year when few legislators want to alienate powerful interest groups. The anti-fraud authority has wider support, and the Coalition is urging the statehouse to pass the authority as a freestanding measure. 

* Insurance history was made when South Carolina Gov. Henry McMaster signed the nation’s first state insurance data security bill into law. Insurers must: develop and implement information-security programs to protect non-public information from being disclosed or stolen … designate an employee or vendor responsible for their data-security program … identify internal and external threats that could lead to data breaches … and develop programs to mitigate those risks through data security and managing of personal information. The bill moved quickly through both chambers, and to the governor’s desk. Insurance commissioner Raymond Farmer chairs the NAIC’s Cybersecurity Working Group. He helped lead the effort for his state to become the first to pass what may be a model for other states.