The state Senate passed legislation to crack down on auto insurance fraud this week, just after a fraud ring was busted for faking accidents and reaping the financial rewards through insurance companies. The legislation will create a new felony law, making it a serious crime to stage an auto accident. Conviction under the law will warrant up to 7 years in prison.

Insurance fraud is said to cost the people of New York more than $1 billion each year. And it isn’t just people staging accidents that get in on the action. According to the NY Daily News, the Department of Financial Services has “launched a crackdown” on medical professionals that also take part in the fraudulent schemes.

The Department sent letters to 135 doctors in the NYC area after their billing practices “raised red flags”. To substantiate those bills being submitted to insurance companies for reimbursement, the agency requested supporting documentation from the doctors, proving the bills were legitimate. Continue reading →