Looks Like The Year for PIP Reform in Florida
Roughly halfway through Florida’s legislative session, state Insurance Commissioner Kevin McCarty expressed optimism that state lawmakers would find a way to substantially reform the state’s no-fault auto insurance law.
Speaking on an invitation by the Put the Brakes on Accident Fraud Coalition, McCarty shied away from endorsing any specific legislative proposals while maintaining that at the end of the day everyone shared the same desire.
Among other things, he pointed out that Governor Rick Scott, Chief Financial Officer Jeff Atwater, and the state’s Insurance Consumer Advocate Robin Westcott had made PIP reform a centerpiece of their efforts this year.
“We all share the same goal,” McCarty said. “Making sure injured drivers are given proper medical care without creating a pot of gold for medical clinics and unscrupulous litigation.”
Absence those reforms, McCarty said, the state may be looking at the prospect of having no choice but to repeal PIP. “That is always a possibility,” he said.
McCarty’s words came as the Florida House and Senate were still far apart on how to reform the state’s no-fault law.
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.
House lawmakers are pushing a plan, HB 119, sponsored by Rep. John Boyd (R-Bradenton), which 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.
However, it would require all accident victims to be treated in emergency rooms, not clinics, and limit the window for seeking treatment to 72 hours. In addition, it would exclude massage therapists, acupuncturists and chiropractors from receiving PIP payments for medical treatments.
The House bill also contains some far reaching litigation reforms including instituting an attorney fee schedule, eliminating the contingency risk multiplier, and allowing insurers to examine claimants under oath even if they have not filed suit.
The Senate bill, SB 1860, sponsored by Sen. Joe Negron (R-Stuart), seeks to reform current law by cracking down on fraud and medical costs through implementing medical fee schedules, licensing medical clinics that provide PIP benefits, and requiring insurers to promptly pay claims.
To that end, his bill specifies that all PIP medical treatments are reimbursed at Medicare levels and eliminates massage therapists and acupuncturists as PIP medical providers. Clinics providing PIP medical treatments would have to have a license and practitioners found guilty of fraud would have their licensed revoked for five years.
To date, however, the bill remains silent on litigation reform.
McCarty refused to take a position on either the House or Senate reform proposals; beyond saying the House bill would likely encourage more savings. “The legislative process is one of compromise and I believe they will work through the issues,” said McCarty.
The failure to do so, said McCarty, could be even higher PIP prices.
The Insurance Consumer Advocate’s Working Group on PIP Reform found that State Farm Mutual Insurance Co. had increased its PIP rates by 50 percent since 2009, GEICO Insurance Co. by 77 percent, and Progressive Insurance Co. by 63 percent.
McCarty said that trend would continue unless lawmakers act.
“Eventually the legislature will either allow the rates to go up or decide the system needs to be repealed,” McCarty said. “I think we have reached a crossroads.”
McCarty promised that if lawmakers do pass PIP reforms, consumers would quickly see rate relief. Every auto insurer is the state is required to make an annual filing and McCarty said any savings from the PIP reforms would be reflected in any approved rates.
On Jan.25, Florida officials and business leaders held a rally to urge state lawmakers to reform the state’s PIP law. Gov. Scott urged citizens to visit their lawmakers and insist they enact reforms this year.
“This is how laws get changed,” Scott said to a crowd. “You show up and let lawmakers know what you want. Tell them we want this change this year.”
Business leaders also lent their public support to the call for reform. Florida Chamber Executive Vice President Dave Hart called on lawmakers to address litigation and medical costs, as well as give law enforcement officials more tools to combat fraud.
“Florida now holds the record for the most fraudulent claims,” said Hart. “The time for PIP reform is now.”