Preventing Insurance Fraud in Minnesota

Legislation heard this week in the Commerce Committee is aimed at addressing insurance fraud issues in the state. Currently, Minnesota has one of the highest rates of insurance fraud in the country, costing the average family more than $1,400 a year in higher insurance premiums, and higher costs of goods and services purchased from businesses that also suffer from fraud.

The legislation has three components. Current law allows for the immediate release of accident report information to third parties. This legislation would still allow this information to be available for the public, but providers would not be able to contact accident victims until 30 days had passed. Furthermore, the legislation prevents insurers from settling a claim within 30 days unless they give the insured person written disclosure that they are eligible for legal counsel.

The second provision enables the Commerce Department to bring civil penalty charges against fraudulent actors. Lastly, the bill gives the Commissioner of Commerce or another relevant licensing body the authority to remove a medical provider’s authorization to receive insurance payments if they are found to have committed fraud. An amendment that was adopted clarified the civil penalties for fraudulent actors and allows the possibility of health care providers found guilty of fraud to receive insurance payments again after five years.

Several other states have enacted similar provisions to help curb fraud, and proponents maintain that this legislation is an important step in anti-fraud work here in Minnesota. The bill was re-referred to the Committee on Judiciary. (S.F. 782)

Senate DFL Media