Collecting an automobile insurance claim becomes a whole new game in New York Tuesday, when state regulations impose a tight new set of deadlines.
The state Insurance Department has slashed the length of time policyholders have to report accidents and health-care providers have to submit medical bills.
The state intends to trim an estimated $100 million of annual insurance fraud, but the tougher standards affect all New York drivers.
The current 90-day deadline for reporting a claim is being cut to 30 days. Hospitals and other health-care providers will be required to submit medical bills for insurance claims within 45 days, a sharp drop from the 180 days they previously had to file.
Insurance companies have praised the state for a progressive move to fight fraud. Trial lawyers accuse the state of handing a sweetheart deal to the insurance industry.
New York State Bar Association President Thomas O. Rice has labeled the new regulation "unfair and unwise."
"The reduction in time from 90 days to 30 days really puts the consumer on a much tighter schedule. I think there's a risk that there are going to be some cases that aren't on record with the insurance company within 30 days," said Donald B. Eppers, president of the Bar Association of Erie County.
The shift in medical billing is a dramatic change for hospitals in the state, many of which have gone through staff reductions after a steep cut in Medicare revenue.
Western New York hospitals take an average of 63 days to bill for an automobile insurance claim, said Paul Sweet, vice president of member services for the Western New York Health Care Association.
"This is going to shorten our time span. It's not going to help us at all," Sweet said.
The 45-day deadline could easily be missed by providers who bill on a monthly basis. Some accident victims spend more than a month in the hospital.
The new deadlines will make it much easier for insurance companies to evaluate claims filed for "serious injuries." The serious-injury threshold, which allows policyholders to seek compensatory damages, is met if a person is not able to perform normal daily activities for 90 days.
When a policyholder waits 90 days to file the initial claim, the insurance company has no time to conduct independent medical exams assessing whether the injured person could not resume normal activities within 90 days.
Policyholders can protect their interests by notifying their insurance company of an accident as soon as possible, even if they notice no immediate injury, said Christopher O'Brien, a personal injury attorney in Williamsville.
Some motorists involved in fender benders do not notice a soft-tissue injury for days, or they spend a couple of weeks trying to "tough out" a sore back, he said.
"What this does, in effect, is punish you for being conservative about your own medical treatment," he said. "The consumer has to be vigilant from the standpoint of immediately notifying the insurance company whether or not they immediately notice an injury."