More and more automobile insurance companies seek to combat no-fault insurance fraud by suing health care providers and others for fraudulently obtaining or seeking to obtain benefits1 under New York’s no-fault law.2 These lawsuits often combine claims to recover monies paid to the providers with a declaratory judgment action as to claims denied and/or not yet decided. For the most part, all the various causes of action arise out of the same nucleus of facts. One of the newest areas of contention in these cases: efforts by medical providers to require that these affirmative insurance company lawsuits be arbitrated rather than litigated.
The issue arises under two provisions of New York’s no-fault law. First, Insurance Law §5106(b) requires that:
Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.3
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