Legislative News


* Even as Florida officials warn Irma-damaged homeowners about assigning over their insurance benefits to dishonest contractors, the statehouse is planning a 2018 push to reign in the often-sleazy practice. It’s called “assignment of benefits.” A reform bill is prefiled. It would limit attorney fees stemming from frivolous lawsuits by contractors over-inflated claims for home-damage repairs. Contractors are convincing homeowners to sign over legal control of their claims. The contractors often then illegally juice up repair claims and sue insurers to extract maximum repair payouts. A similar bill stalled this year. A sister bill deals with AOBs for auto-glass repairs (see Oct. 6 Fraud News Weekly). Auto-glass firms are taking over windshield claims, then inflating claims and suing insurers.

* Texas can best tackle workers-comp premium scams when fraud fighters partner with organized labor and other outside groups that add weight to the efforts, the Coalition’s Howard Goldblatt said at a state workers-comp ed program in Austin. Working jointly can better discover often complex and well-hidden scams, Goldblatt said. Texas has a big problem with businesses illegally dodging paying full comp premiums. Misclassifying workers and lowballing payroll are common fraud practices. Cons inflict large losses of comp premiums and tax revenue. Texas, however, doesn’t require businesses to carry comp coverage. That can complicate the fraud landscape. Goldblatt’s remarks echoed his call to action at a prior related state meeting in the Dallas area.

* Zombie health plans could forage for victims if the Trump Administration’s proposal to allow so-called Association Health Plans takes hold. Dennis Jay blogs a warning about the sordid history of AHPs: “Consumers by the thousands were defrauded. Many were left in financial ruin, stuck with large medical bills they had to pay from their own pockets. One couple had a child with brain cancer, only to discover they’d bought into a fake health plan.”


* Good news for Michigan’s proposed state auto-fraud authority. The agency would increase state revenues because funding would come from an annual insurer assessment, a major fiscal analysis says. That boosts the authority’s appeal as debates over a comprehensive no-fault reform bill pick up speed. The authority is part of that bill. Despite the agency’s appeal, its fate may rest on reform’s outcome. The fiscal analysis, however, tossed cold water on the overhaul: About $150 million of claims costs would shift to Medicaid, the analysis says. That breeds powerful new opponents, further undercutting reform — including the fraud authority. The odds of the massive reform bill passing this year thus remain in doubt. Still, any movement might carry momentum into 2018. Legislators and interest groups may gain more time to hammer out a compromise next year.

* The Assignment of Benefit issue in Florida goes beyond shady home damage claims — auto scammers also are getting into the act. SB 396 would help corral abuses of auto glass repairs. The pre-filed bill for 2018 would authorize insurers to inspect vehicles before windshield repairs or replacements are done. Shady glass repair shops are taking over claims from the policyholders. Then they replace windshields that aren’t damaged, or could be fixed with less-expensive repairs. The insurance scam has grown large enough that it needs a legislative fix.


* No-fault reform is back in Michigan during the final weeks of the 2017 session. A new bill would overhaul the state’s beleaguered auto-insurance system — and create an automobile fraud prevention authority. The large re-do is backed by the House leadership, Detroit mayor, plus the state’s NAACP chapter and chamber of commerce. The bill’s future is uncertain. It has something every stakeholder opposes: rate rollbacks … linking medical fees to the Medicare’s low rates … letting consumers choose their level of PIP coverage, including the lifetime fee cap … and letting seniors opt for Medicare coverage instead of auto to cover crash injuries. Only the auto-fraud agency seems to have universal support. Yet it’s unclear if this huge bill has traction to go anywhere this year. A stand-alone bill creating the fraud authority legislation still sits in the legislature. Most of the action in the remaining months, however, likely will center around the full overhaul.

* Good and iffy news came from this week’s meeting of the Virginia’s state police’s insurance fraud advisory board. The state police launched nearly 500 investigations from referrals this year. The police also declined more than 500 referrals — mainly due to incomplete info (including identifying the fraud suspect). Nearly $400K in restitution was ordered so far in 2017. And, both dedicated prosecutors that were funded starting in July now are pursuing suspects in the Richmond and Norfolk areas. The state police will push to hire dedicated prosecutors for Northern Virginia and the Southwest region in 2018. This will require that existing budget funds be allocated.

* Florida’s governor wants to tighten the prescribing of addictive opioids next year. A proposal would limit opioid scripts to 3 days of meds. Prescribers also must take part in the state’s Prescription Drug Monitoring Program. The Coalition has long called for all providers and pharmacies to take part in state PDMPs. These databases are valuable tools for tracking illicit prescriptions. The 3-day script limit may face strong opposition — the legislature already rejected a 5-day limit this year as too low, Coalition sources say. Insurance fraud is a major financier of the nation’s opioid epidemic. Insurance pays for many of the scam scripts that supply painkillers and other pills to addicts.


* Fraud fighters took a hit in Illinois when funds earmarked for combating insurance crime in the state were dumped into a general anti-crime pool. Illinois has serious budget shortfalls. The new law seems to reflect an effort to broaden funding of anti-crime efforts in Illinois. The measure takes effect Jan. 1.

* New York legislators will try to put the heat on ID thieves in 2018. AB 8629 would create the crime of ID theft. Stealing someone’s ID to commit insurance crimes using a policy or other product would be a specific ID theft crime. So theoretically a suspect could be charged with ID theft and insurance fraud if the bill is enacted.


* Texas workers-comp agencies and insurers should partner with groups including organized labor to target premium avoidance by dishonest businesses. That was the main takeaway of Howard Goldblatt’s presentation at a workers-comp ed program held by the state’s workers comp commission in the Austin area. Many groups working jointly can better discover often complex and well-hidden scams, Goldblatt said. Like many states, Texas has a significant problem with employers dodging paying full comp premiums. Cons mean a large loss of premium and tax revenue. Texas, however, doesn’t require businesses to carry comp coverage.  

* A workers-comp prosecutor will be embedded in Travis County (Austin) to deal with comp cases, the head of the state workers comp division said at the Texas ed program. Expensive compound meds also are being extensively used in comp claims, Ryan Brannan said. Claims thus are being scrutinized for fraud potential. And, an ongoing scheme: “double-dipping” in depositing workers comp checks. Seems the claimant uses a bank’s mobile device app to scan and deposit a check. The claimant then goes to a check-cashing outlet and immediately cashes the check before anyone realizes the check was deposited.

* The California legislature cleared a bill that stops payments on liens from medical providers charged with fraud. Seems a quirk in the current law allows lien to be paid right up to a conviction. The new law aims to stop payment immediately when a provider’s charged, and hold payment until adjudication.

* “When I leave the office for the last time I’ll walk out the front door with a smile, knowing I helped the Coalition make a difference in fighting insurance fraud,” the Coalition’s longtime legislative chief Howard Goldblatt blogs in announcing his retirement at the end of this year. “We still have several months together. So rather than signing off, I’ll say let’s make this stretch run one of our best ever in combating insurance fraud.”