2012 Session in Review: Personal Injury Protection Reform
By Greg Giordano
The Florida Legislature did not pass as many bills this year as it has in the past, which may not necessarily be a bad thing. However, one of the issues that it did send to the governor was a rewrite of a law that impacts everyone who drives a car: Personal Injury Protection. This portion of a driver’s automobile insurance policy, commonly known as PIP, falls under Florida’s Vehicle No-Fault Law. Under current law it provides $10,000 in medical benefits for those injured in a car accident. Legislation that is now heading to the governor’s desk changes many aspects in which those benefits can be used.
PIP reform tends to be a controversial subject to tackle. In 2001 PIP was reformed in response to a grand jury report that stated that fraud was extensive. PIP was reformed again in 2003 with strengthened penalties for PIP fraud and increased regulation of clinics that provide medical care for PIP recipients. Included in that year’s reform package was a provision setting the expiration of the No-Fault Law on October 1, 2006. In 2006 the Florida Legislature passed a bill during its regular spring session to extend the No-Fault Law but it was vetoed by the governor. After No-Fault expired the Legislature met in special session in 2007 and reenacted No-Fault as of January 1, 2008.
In the waning hours of the final day of this year’s session, HB 119 sponsored by Representative Jim Boyd of Bradenton (companion to SB 1860 by Senator Joe Negron of Palm City) returned to the Senate for final consideration and passed with a vote of 22-17 (Senator Mike Fasano voted against the measure because the bill was very pro-insurance industry). Its final vote in the House was 80-34.
The main purpose of the bill is to reduce fraud and change the environment in which “staged accidents” become profitable. “Staged accidents” are criminal acts under which fake auto accidents occur so that those in on the fraud can bill for benefits under PIP coverage. The governor had previously stated if the legislature did not act during the regular legislative session he would call lawmakers back to Tallahassee for a special session to address PIP issues.
Reforms have very “real life” impacts on those who provide care to people injured in accidents. 2012’s legislation limits or changes coverage for services provided by chiropractors, massage therapists, acupuncturists and attorneys. The legislation requires that someone injured in an accident must seek treatment within 14 days. The full $10,000 PIP benefit is only available if a physician, osteopathic physician, dentist, physician’s assistant, or ARNP determines the insured has an “emergency medical condition.” Otherwise the PIP benefit is limited to $2,500. The bill also creates a new $5,000 death benefit under PIP. Current law states that the death benefit must come out of the existing $10,000 benefit.
“The end result was an extremely insurance industry friendly bill leaning far, far away from being the best for the citizens of Florida whom our legislators represent,” Pinellas County-based chiropractor Ken Peluso commented in a New Port Richey Patch post to this writer. “I know for a fact that the patients that I see in my office will be severely negatively impacted by our now current law.”
If the bill becomes law it will allow insurance companies 60 additional days (90 days total) to investigate suspected fraudulent claims. To discourage the insurer from holding up claims without cause the bill requires the insurance company to pay interest on those claims. Health care practitioners found guilty of insurance fraud will lose his or her license for 5 years and may not receive PIP reimbursement for 10 years.
The legislation requires a beneficiary to comply with policy terms including the submission of an examination under oath. Those who make claims must comply with this provision or else they will not receive benefits.
The bill creates a non-profit direct support organization that can accept private donations for the purposes of preventing, investigating, and prosecuting motor vehicle insurance fraud. This organization is to be called the Automobile Insurance Fraud Task Force. The proposed law prohibits Florida’s Chief Financial Officer’s PIP Fraud Task Force from using funds for advertising when using the likeness or name of any elected official.
Cost savings mandated by the legislation will be achieved in this fashion. By October1, 2012, insurance companies are required to submit a rate filing to the Office of Insurance Regulation that requests at least a 10% rate reduction for PIP coverage. If the company does not it must document the reasons for its failure to reduce rates by that amount. A second rate filing must be made by January 1, 2014 at which time it must reduce rates by at least 25%. If a company is unable to do so it must document its reasons why not.
“My constituents expressed many concerns with this legislation,” Senator Fasano stated. “Earlier in the week the Florida Senate passed a good package that was summarily rejected by the Housie. In my opinion much more needs to be done to make PIP reforms truly consumer –friendly.”
The governor will have 15 days to either sign, veto or allow the bill to become law without his signature once it has been delivered to him.
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