Stage Set for Florida Personal Injury Protection Showdown; Special Session Possible

The following article was published in The Insurance Journal on March 8, 2012:

Florida House, Senate Differ on PIP Reform; Special Session Possible

By Michael Adams

The Florida Senate has rewritten the House’s bill aimed at reforming the state’s no-fault auto law, adding numerous provisions that are opposed by House lawmakers.

As a result, there is a chance that the issue will become the subject of a legislative special session after lawmakers adjourn for the year at the end of the week.

The Florida Senate yesterday approved a strike-all amendment to HB 119, sponsored by Rep. (R-Bartow), by a 39 to 1 margin, which belied the chaos surrounding the bill when lawmakers the day before tacked on over a dozen amendments leaving even senators confused over what was in the bill.

Reforming the state’s personal injury protection law has been the top insurance legislative goal this session with the strong support of Governor Rick Scott, Chief Financial Officer Jeff Atwater, Insurance Commission Kevin McCarty and others. However, from the beginning House and Senate lawmakers have been far apart over how to reform the law.

Under current law, drivers are required to carry $10,000 in personal injury protection. The insurance scheme is design to provide all drivers with some protection and remove the need to litigate small claims. Critics, however, say organized crime rings that stage accidents, along with fraudulent clinics and unscrupulous attorneys quickly claim the $10,000, after which they may sue the insurance companies.

The original House, HB 119, would replace the state’s current PIP law with a proposed “Emergency Care Coverage” insurance scheme. It would maintain PIP monetary benefit levels at $10,000 in medical coverage and provide loss wages and funeral benefits.

It would require accident victims to be treated in emergency rooms, not clinics, and limit the window for seeking treatment to 72 hours. It would exclude massage therapist, acupuncturists and chiropractors from receiving PIP payments for medical treatments.

The Senate, however, rejected that scheme out of hand.

Instead the Senate version gives accident victims up to 14 days to seek medical treatment. While stating that treatment could be provided at a hospital or hospital owned clinic, accident victims could also seek treatment from dentist and chiropractic physicians. Follow-up visits could be provided by physicians, including family doctors, chiropractors, physician assistants, nurse practitioners.

While licensed physical therapists would be eligible for reimbursements under PIP policies, massage therapists and acupuncturists would be excluded.

The Senate does seek to rein-in medical utilization by limiting care to 24 visits or to services rendered within 12 weeks of an accident, unless the insurer approves additional treatment. Critics say this will open the door for a high number of legal cases over the medical conditions of patients.

Property Casualty Insurers Association of America lobbyist Donavan Brown said he is still monitoring the bill, but continues to support its goal of finding ways to cut down costs.

“We’ve stated since the beginning that we need a bill that would address the fraud in the use of the medical clinics, reduce utilization, and limit the incentives for lawyers to bring frivolous cases,” he said. “To the extent we can get a bill to do those things we would support that.”

The bill also contains the usual list of fraud proposals including the establishment of the “Automobile Insurance Fraud Task Strike Force,” which while not opposed by lawmakers is not considered as strong as necessary to cut down on staged accidents and other schemes.

Attorney Fees; Rate Rollback Source of Debate

On area the House and Senate are far apart on is attorneys fees.

From the attorneys’ perspective, the re-written Senate bill is much more favorable and shows their political muscle. The House bill follows the state’s workers’ compensation model, which places caps of fees and eliminates contingency multipliers in cases where attorneys have to put in significance time although the amount of client’s benefits may not be that large.

The Senate bill removed those provisions, keeping intact the current attorney fee reimbursement schedule.

“The fee caps and elimination of contingency multiplier would have seen fewer doctors and insurance companies held accountable,” said Steve Schale, spokesperson for the Florida Justice Association. “We want to make sure consumers are protected when it comes to legal issues.”

One thing that insurers are facing regardless of the final form of the bill is a significant reduction in PIP rates. In its current form, the Senate bill calls for a 25 percent reduction in PIP rates, effective January 1.

Florida Insurance Council Vice President Sam Miller said the industry has always expected the bill to contain a mandatory rate rollback as part of the bill.

“It is something we have to accept,” Miller said. “But if it is realistic and actuarially justified, we will be okay with it.”

Prospects for a Special Session Growing

Some lawmakers are calling for a special session on the issue if lawmakers cannot agree by the time the legislative session ends on Friday, a position tacitly approved by Gov. Scott.

Next week, the legislature is scheduled to hold a special session on the reapportionment of districts, which could make it making it possible to add PIP to the agenda.

Sen. John Thrasher (R-Jacksonville), who has strong ties with the current administration, said he would rather see the PIP bill killed and force a special session rather than merely passing a bill for the sake of it.

“If it is not a good bill, and not one that makes a difference, I would be fine with going to the governor and recommending he veto the dad gum thing,” said Thrasher.

Scott ,who has made PIP reform his number one legislative priority this year,  said he remains optimistic that lawmakers will come to some consensus on the bill. But even he signaled that he is not inclined to allow lawmakers to walk away from Tallahassee empty handed.

“Look, this is something we can fix,” said Scott. “It’s a problem the state created and it’s something we need to fix.”

Insurers, however, think there is still time for lawmakers to reach a compromise. “There are two days left,” said PCI’s Brown. “I’m optimistic that there is still time to get something done.”

Find this article here:  http://www.insurancejournal.com/news/southeast/2012/03/08/238784.htm