Florida Insurance Consumer Advocate Robin Westcott’s Personal Injury Protection (PIP) Working Group Meeting Report: October 10, 2011
Oct 10, 2011
Florida Insurance Consumer Advocate Robin Westcott’s Personal Injury Protection (“PIP”) Working Group (“Working Group”) met in Tallahassee today, October 10, 2011.
As part of the meeting, the Working Group heard a presentation from Albert Rosati, General Manager of ExamWorks, a company that performs Independent Medical Examiniations (“IME”), peer file reviews, utilization reviews and other similar services.
Mr. Rosati stated that the physicians who perform services for ExamWorks are credentialed, and the credentialing criteria are similar to those of a hospital. IMEs and peer reviews are conducted by providers licensed for the same scope of practice as the provider they are examining.
The “Gold Standard” of IME exams includes a complete physical and a complete review of the treatment records. According to Mr. Rosati, about 90 percent of the exams performed by ExamWorks are Gold Standard exams. The other ten percent are peer review exams where only the medical and treatment records are reviewed, he explained.
Mr. Rosati also stated that the no-show rate for IMEs is about 50 percent, and can be up to 60 percent in cases involving attorney representation. Since the Supreme Court ruling in Custer v. United Auto Ins. Co, there has been a decrease in referrals for IMEs.
Dr. Ashley Booth-Norse made a presentation on behalf of the Florida College of Emergency Room Physicians. Dr. Booth-Norse noted that the current $5,000 statutory set-aside for emergency care is not being honored. Many times, this money is used to pay hospital liens, or is applied to a deductible. She suggested strengthening the language of the law to clarify that the $5,000 set-aside may not be used to settle hospital liens, as well as to clarify that the deductible does not apply. She added that requiring bodily injury only would create problems, because payment would be tied up in the court system.
After these presentations, the Working Group discussed uninsured motorists in Florida. It was noted that the number of uninsured motorists has neither increased nor decreased significantly in recent years.
The Working Group also discussed clinic licensure and how this language should be strengthened. Most members of the Working Group agreed that exemptions to the licensure requirements need to be addressed. Suggestions ranged from allowing an exemption to be valid for only one clinic location, to doing away with licensing exemptions altogether. There was a short discussion on prohibiting clinics that have committed fraud by treating PIP patients and on funding a dedicated unit within the Florida Department of Health to shut down fraudulent or illegal clinics.
To begin the afternoon discussion, Ms. Westcott provided the Working Group members with an “Application for Florida No-Fault benefits.” (“Form”) Developed by Working Group staff, the Form will be made available to the public in response to repeated statements that not enough data exists to track PIP losses.
However, none of the Working Group members indicated this type of form was helpful. Jeff Scott from the Florida Medical Association (“FMA”) expressed concern that it would be used as an administrative tool to reject legitimate claims.
Michael Neimand of United Automobile Insurance stated that, instead of instituting another form to claim PIP benefits, the PIP statute should be amended to limit the ability to demand PIP benefits to policyholders and their attorneys. Mr. Neimand indicated that a limitation on who can demand PIP benefits, combined with investigation tools like IMEs and examinations under oath would solve Florida’s PIP problems.
Mr. Scott again expressed concern that limiting who can demand PIP benefits would greatly injure physicians, to which Mr. Niemand responded that an exception could be worked out for first responders and emergency medical providers.
Allen McGlynn of State Farm pointed out that requiring any form or instituting a limitation on demands for PIP benefits would take action from regulators and the Florida Legislature.
The Working Group then discussed the idea of annually setting PIP reimbursement rates at the Medicare rate on a given date, which was part of proposed PIP legislation during the 2011 Legislative Session. The Working Group agreed that this could be helpful and potentially reduce fee disputes. Mr. Scott stated the FMA will support this policy, as long as a floor for PIP rates is set at the 2007 Medicare reimbursement rate.
A brief discussion about increasing the PIP benefit was held. The Working Group agreed that the amount of PIP benefit is not the central issue to PIP reform, and that any recommendation to increase the benefit should be accompanied with guidance on fee schedules and anticipated market impacts resulting from the increased benefits.
Ms. Westcott then posed the question as to whether PIP should be repealed in Florida. Robert Simmons of Allstate opened the discussion with a comment that, no matter what happens to PIP, there are certain policies that must be addressed in order to create a healthy insurance market in Florida. Without utilization controls, reviews of clinic licensure procedures, attorneys’ fee reform and proper investigations tools, Florida will not have a healthy insurance market.
Ralph Gladfelter from the Florida Hospitals Association (“FHA”) stated that repealing PIP is not an option for Florida’s hospitals. Mr. Gladfelter indicated that, due to payment delays, the repeal of PIP and its replacement with bodily injury coverage (“BI”) in Colorado led to near catastrophe for that state’s trauma care system. He further indicated that the FHA supports PIP reform to reduce litigation, but any reform must include required first-dollar coverage for all Florida drivers.
Todd Templin of the Florida Justice Association stated that the majority of states have chosen mandatory to adopt mandatory BI, because too many accident victims were left uncompensated under PIP systems. Mr. Templin indicated that Colorado’s problems have been solved by the adoption of a “med pay” product, leading the FJA to the conclusion that a blended BI and PIP system is probably most effective.
For guidance on how PIP should work, Monte Stevens from the Florida Office of Insurance Regulation implored the Working Group to evaluate states where the PIP product is mandated. He further provided data showing that states with much higher benefit limits have far lower loss ratios.
Mr. McGlynn then indicated that the other PIP states have healthy markets, because they have fee schedules, utilization controls, “loser pays” attorneys’ fees, appropriate investigation tools, no contingency risk multipliers, and no threat of a catastrophic bad faith claim.
In response, Mr. Templin stated that the push for PIP reform is the same as it was from 2001 to 2007. According to Mr. Templin, during the last round of PIP reform, insurance companies indicated that adoption of a fee schedule would cure the marketplace. Now, he believes insurance companies are seeking further reform of litigation, because certain companies underpay providers as part of their regular course of business. Thus, attorneys’ fee reform will allow these companies to underpay without consequences. Mr. Templin then cited data that over 10,000 suits for underpayment have been filed over the last 18 months against State Farm, USAA and United Auto.
Mr. Niemand informed the Working Group that, of United Auto’s 790 open cases, 600 were claims of underpayment by providers. He stated that these claims result from situations in which United is paying the prescribed Medicare rate, but providers demand higher payments because the Medicare fee schedule is not incorporated in United’s contract.
Ms. Westcott concluded the meeting by restating the Working Group’s desire to reform PIP instead of repeal it, while aggressively seeking PIP policy that would reduce litigation.
To access the meeting materials, click here.
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