Minnesota legislators are looking to overhaul the state's auto insurance laws, which have allowed scammers to profit from bogus medical claims submission, according to the Minneapolis Star-Tribune.
Lawmakers say the state has become a destination for fraudsters and organized crime because of the way state laws are structured. Minnesota is among nine states that operate under a "No-Fault" system, which pays drivers and passengers up to $20,000 in medical benefits and lost wages regardless of who caused the accident, according to the Star-Tribune.
Scammers take advantage of the regulatory loophole by staging accidents and then submitting false claims for medical services. The Tribune reports that in 2013, Minnesota received 1,700 questionable insurance claims; the state currently ties Massachusetts for the third-highest rate of insurance fraud.
A new bill aims to close that loophole by providing more funding to the state's anti-fraud unit, introducing hefty fines for those found guilty of fraud and instituting a 30-day "cooling off" period before accident reports can be accessed, according to the newspaper. The bill is supported by the insurance industry and law enforcement, but the state failed to pass a similar measure last year.
The Coalition Against Insurance Fraud said staged auto crashes are often orchestrated by organized crime rings that utilize "shady helpers" to approach victims at the crash site and persuade them to get medical treatment at a specific clinic that may submit claims for unnecessary services. As FierceHealthPayer: AntiFraud previously reported, organized crime rings are becoming more pervasive in healthcare fraud because it's easy to exploit gaps in the system.
Minnesota has a troublesome past when it comes to reigning in various types of fraud. Earlier this year, Minnesota made headlines for its inability to recover fraudulent medical claims and prosecute fraudsters. Statistics show that Minnesota ranks among the highest in total Medicaid expenditures, but records the least in civil and criminal recoveries from Medicaid fraud. In January, a local politician got involved in a fraud scam that cost Medicaid $10 million.