News release

Fraud Bill Combats Rings Bilking Minn. Auto Insurers

2/26/2015

Organized rings view Minnesota as easy target lacking legal infrastructure

imageMINNEAPOLIS, Feb. 25, 2015 — Combating rapidly spreading organized rings targeting Minnesota auto insurers will require stronger laws that impose intimidating penalties, the Coalition Against Insurance Fraud told a state Senate subcommittee today.

“Minnesota is being targeted by out-of-state organized crime rings. They perceive Minnesota is an easy target because it lacks the legal infrastructure to effectively combat the rings,” the Howard Goldblatt, the Coalition’s director of government affairs, said in testimony.

The legislature is debating bills limiting ring access to police crash reports, imposing large civil fines on ringleaders, and booting dishonest medical providers from the insurance system.

Organized rings are moving to Minnesota and homegrown ones are cropping up with growing frequency, Goldblatt said.

SF 782 would restrict access to crash reports. Rings use the reports to identify crash victims. Recruiters try to lure the victims to shady clinics for inflated and worthless injury treatment. The Coalition proposed the measures to a panel that was studying legislation responding to the onset of medical rings. The bill was sent to the Senate Commerce Committee in a unanimous vote today.

“Why should a third party not involved with the crash have access to a police report that has identifiable information,” Goldlatt said. Medical mills in Texas began declining after limits on crash reports took effect.

Authorizing Minnesota to impose large civil fines on ringleaders will undercut their profits. The state also gains flexibility to crack down without relying on uncertain criminal prosecutions.

“Those committing fraud will feel financial pain because the civil penalty would exceed the amount of the fraud. Getting at the profit motive by draining the fraudster’s wallets could help deter more fraudsters,” Goldblatt said.

Kicking dishonest medical providers from the insurance system will deplete inflated claims against auto insurers. “A license is a privilege bestowed by the state and not a right. If a person uses that privilege to commit fraud, the state should seek a greater penalty for misusing that state license,” Goldblatt told the subcommittee.

A similar law in New York has allowed the state to remove nearly 20 dishonest medical providers from the state’s no-fault system.

“These proposals will go a long way toward strengthening Minnesota’s anti-fraud efforts. The bill will benefit Minnesota consumers and businesses,” Goldblatt concluded.
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CONTACT:
Howard Goldblatt, director of government affairs; 202-393-7332
James Quiggle, director of communications; 202-393-7331