The following article was published by Florida Voices on January 6, 2012:
Colodny Fass’ Katie Scott Webb: Should Florida Change its No-fault Auto Insurance Law?
It is critical for the Florida Legislature to pass comprehensive and meaningful Personal Injury Protection (PIP) reform during 2012. PIP, in its current state, is rife with fraud and abuse, and Florida drivers are paying the price.
A data call conducted by the Florida Office of Insurance Regulation (OIR) and a subsequent report by the insurance consumer advocate indicate two things: PIP fraud is exploding, and abuse is rampant. The consumer advocate found that while the number of licensed Florida drivers decreased from January 2008 to January 2011, the number of PIP claims increased by around 50 percent.
Were there that many more accidents? No. Unscrupulous medical providers and attorneys overbilled for treatment or outright faked records. Some people staged accidents and faked injuries.
Meanwhile, some attorneys used the legal system to pocket six-figure fees while collecting pennies for their clients. Data indicates that PIP-related lawsuits more than doubled between 2008 and 2010.
The explosion in claims and litigation has raised PIP premiums for everyone, including honest consumers. Because coverage is mandatory, the Legislature has a duty to stymie the rising cost to all drivers. Here’s what lawmakers can do:
Limit reimbursable benefits. Because PIP care is not managed like other forms of healthcare insurance, the Legislature should specify that PIP should not be used to pay for luxurious treatments and should limit treatments with limited medical value.
Curb lawsuits. Over the years, a cottage industry of lawyers has found ways to manufacture PIP litigation. Because the insurance code has a one-way provision for PIP attorneys’ fees, lawyers have financial incentives to sue insurers for insignificant sums in order to bill at rates of $300 an hour and more. The Legislature should limit fee awards.
Punish unscrupulous doctors and clinics. The current PIP system rewards healthcare providers for billing the maximum $10,000 benefit, whether or not treatment is needed. The Legislature should establish oversight and enforcement mechanisms that would revoke the licenses of providers that commit fraud and prevent them from reopening under different corporate names.
Reform the claims process. The courts have handicapped fraud investigations by taking away important tools such as examinations under oath (EUOs) and independent medical examinations (IMEs). The Legislature should reinstate them and give insurance companies additional time to investigate suspicious claims.