Florida Insurance Consumer Advocate’s PIP Insurance Roundtable Stirs Debate

Aug 5, 2010


Representatives from insurance companies, clinics and hospitals joined various government officials and others in a roundtable discussion on Personal Injury Protection (“PIP”) insurance issues hosted by the Florida Insurance Consumer Advocate on August 4, 2010. A wide range of topics were covered during the day-long meeting, a review of which follows:

At the outset of the agenda, National Insurance Crime Bureau Director of Government Affairs Alan Haskins gave a presentation on PIP fraud, noting that they are rampant because the PIP system can yield easy money with low risk.  Florida has experienced an increasing statewide trend of questionable claims, which have risen 15 percent from 2008 to 2009, while staged accidents have increased 58 percent.  Mr. Haskins’ testimony led to discussion among the panelists regarding No-Fault insurance.  Many of the attorney panelists felt that eliminating No-Fault coverage would not reduce Florida’s fraud problem.  To access Mr. Haskins’ presentation, click here.

Florida State Representative Bryan Nelson (R- Apopka) commented that the Florida Legislature provided additional funding for PIP fraud prosecutions during the 2010 Session.  Tampa received an additional $2 million for fraud prosecutors.  Representative Nelson reported that Orlando unfortunately chose not to use additional funding it received to hire another fraud prosecutor.  

According to Florida Division of Insurance Fraud Director John Askins, a major driver of the fraud problem is the prevalence of individuals illegally soliciting others to engage in fraudulent activity.  He opined that there will never be enough investigators to solve the PIP fraud problem.  Further, there is a significant need for attorney and medical-related regulatory reform.

The panel discussed various recommendations to reduce PIP fraud. Among those discussed were:

  • Establishing standardized criteria of what constitutes “questionable” claims
  • Eliminating frivolous lawsuits
  • Requiring that clinics be wholly doctor-owned. 

Germane issues relating to health care clinics also were discussed.  It was suggested that the clinic licensure laws need to be strengthened and clarified.  Others cautioned that any changes should not result in unintended consequences that could reduce legitimate health care services. 

Insurance claims payment-related issues were debated.  PIP initially was designed to afford prompt payment.  However, according to one panelist, this aspect of the system has devolved, in part, because of the numerous issues related to the PIP forms, according to one panelist.

In response to a suggestion of further limiting medical fees, some panelists warned that capping, and thereby limiting them would likely reduce the number of quality providers.  Health care providers on the panel suggested that carriers should be required to process claims electronically for efficiency, as well as submit an Explanation of Benefits form.

Florida Office of Insurance Regulation Property and Casualty Market Investigations Manager Charles Kelly provided a presentation on policy misrepresentation, which is governed by Florida Statute 627.409. He reviewed the process of a typical claim based on policyholder material misrepresentation and the insurer remedy of canceling the policy from the beginning.  To view Mr. Kelly’s presentation, click here.

Florida Insurance Consumer Advocate Sean Shaw posed the question of whether PIP is worth keeping in Florida or whether it should be eliminated.  Panelists representing hospitals and clinics suggested that PIP can be fixed.  Further, they noted that eliminating PIP will not stop crime and fraud.  Others insisted that the PIP system is a “cottage industry” filled with organized crime and should be eliminated. 

During public testimony, Jose Cruz of the Insurance Fraud Alert Team spoke about the problems with insurance fraud in Tampa and suggested that the Florida workers’ compensation attorney fee reforms be incorporated into the PIP laws.  Further, the PIP-related advertising laws should be stricter. It was noted that restricting advertisement could be a violation of free speech. Others testified about importance of strengthening clinic licensure laws.

In closing, most panelists acknowledged problems with the current PIP system. However, the group did not agree about possible solutions.  Mr. Shaw indicated that his office is open to further comments or suggestions on the subject.

To view yesterday’s roundtable agenda and list of panel participants, click here.



Should you have any questions or comments, please contact Colodny Fass.