PIP reform bills moving forward in Florida

by Matthew Glans on March 2, 2012

Recent efforts to combat the growing problem of auto insurance fraud in the Florida legislature have centered on reforming how insurance companies in the state handles personal injury protection (PIP) auto insurance claims. The state’s current regulations, which require a driver’s insurance company pay up to $10,000 to cover much of medical bills and lost wages after an accident no matter who’s at fault have been exploited by con-men, unscrupulous doctors, swindlers, and ambulance-chasers to inflate personal injury protection (PIP) claims, through staged accidents  and false or exaggerated injuries to defraud insurers.

These false claims result in increased costs for insurers and higher rates for policyholders. Florida’s no-fault laws and high PIP coverage makes successfully staging an accident attractive to scammers, and it has led to a significant increase in average no-fault claim costs. Several bills reforming Florida’s PIP insurance system have been proposed.

Two proposals that have moved close to passage are SB 1860 and HB 119. The Senate bill, which recently passed out of committee and is now before the full Senate, limits the types of therapies covered under PIP, including acupuncture. The House bill, HB 119 is supported by Governor Rick Scott and places a time limit on how soon a policyholder must report to a hospital for PIP to kick-in.

From the Insurance Journal:

A Senate bill aimed at cracking down on the rampant personal injury protection insurance fraud that costs Florida drivers more than $1 billion annually in premiums is headed to the full floor for what promises to be a contentious debate for lawmakers who see this as their best last chance to reform the system.

The Senate Budget Committee approved the measure (SB 1860) on a 15-5 vote Wednesday after an hour of testimony and debate. That vote sets up a showdown with a House proposal (HB 119) that’s favored by Gov. Rick Scott, who has made the PIP issue one of his top priorities this session.

Legislators in favor of PIP reform are necessary to keep auto insurance premiums down and make PIP coverage viable long term. Despite the growing problems with auto fraud in Florida in recent years, PIP reform has been unable to make it out of Tallahassee. The Senate bill’s supporters believe this bill may be the best chance to finally enact reforms.

Scott likes the requirement in the House version that requires those hurt in a wreck to go to a hospital emergency room or hospital-owned walk-in clinic within 72 hours for personal-injury coverage to kick in. The Senate bill has no time limit on its bill and also eliminates massage therapy and acupuncture as treatment that would be covered by PIP after an accident.

Sen. Joe Negron, R-Stuart, said his bill balances the interests of insurance companies and medical providers without penalizing accident victims. He also thinks lawmakers are running out of patience in their annual attempts to try and fix the system.

“I think this is the last best chance to make PIP be a valuable insurance coverage for our constituents,” Negron said. “We’ll see what happens.”

Negron was more restrained than Sen. David Simmons, R-Maitland, who was ready to shelve the program altogether.

“What we really need to do is put this law out of its misery, shoot it,” said Simmons, a lawyer. “It’s a fundamentally flawed system.”

HB 119, the PIP reform bill passed out of the Florida House today and business and insurance leaders were quick to praise legislators for moving forward on the needed reforms.

“Today’s vote in the House and the progress in the Senate are hopeful signs,” said David Hart, executive vice president of the Florida Chamber.  “The Florida Chamber applauds the progress in finding a comprehensive solution to our PIP auto insurance crisis.  On behalf of the over 14 million Florida drivers that are business owners or employees, we urge the Legislature to not let up.  Faced with a billion-dollar fraud and abuse problem in the PIP system, we urge bold action.  Florida businesses and our consumers need relief.”

“We are encouraged by the House passing PIP fraud legislation that is one step closer to ending PIP fraud and abuse,” said Jose Gonzalez, vice president of governmental affairs for the Associated Industries of Florida.  “With Florida being the No. 1 state in the nation for fraudulent auto insurance claims, we are hopeful that the House and Senate will work together to pass meaningful legislation that will address the major cost drivers in the system.  Our hardworking Florida businesses and consumers need relief, and they need it this Session.”

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