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Revisions to Florida PIP Law – 2013 Update

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Posted on September 18, 2013

As many motorists continue to endure the ever-increasing auto insurance premiums, the topic of PIP law reform in Florida has gained traction. In 2012, Florida Governor Rick Scott and Chief Financial Officer Jeff Atwater launched an initiative calling for massive reforms to Florida’s no-fault personal injury protection insurance. Colossal insurance fraud schemes, notorious throughout the metropolitan areas of southern Florida, are the driving factor behind skyrocketing auto insurance premiums.

Florida PIP Law Reform

In early 2013, Governor Rick Scott’s campaign met initial success as lawmakers signed into effect Florida Statute 627.736. Florida accident victims must now meet additional criteria before benefits are paid.

Here is an overview of the changes to Florida’s PIP law:

  • Proof of medically necessary emergency treatment: Accident victims must receive medical care within 14 days of the accident and must obtain proof from a qualified physician that treatment was necessary.
  • $2,500 benefit limit for non-emergency medical diagnoses: If medical treatment is needed, but isn’t necessary to prevent serious injury or death, benefits are capped at $2,500. Only emergency conditions may receive the $10,000 amount. Note: This only applies to PIP coverage. A motorist’s bodily injury coverage and other benefits may cover non-emergency treatments beyond $2,500, but the insurance company will have greater power to verify the legitimacy of the injury and investigate any suspicion of fraud.
  • 60 to 90 day Payout Period: Insurers are now allotted 60 to 90 days to investigate suspicious claims and verify documents. With old law, they were only provided 30 days.
  • Greater ability to require a second opinion: Insurers may demand an independent medical examination as a precondition to receiving PIP benefits. The aim is to eliminate false or altered MRIs and exaggerated diagnoses.
  • Exclusion of massage therapy and acupuncture: The new law also excludes PIP payment for supplemental treatments. The idea behind the change is that it is much easier for would-be fraudsters to obtain massage therapist licenses and participate in fraud scheme. Financially, it does not make sense for most people to complete medical school with the intent of defrauding PIP benefits.

Florida Judge Blocks PIP Exclusion Clause

In February, shortly after the statute was enacted, second Circuit Court Judge Terry Lewis filed temporary injunction partially blocking the exclusion of massage and acupuncture therapy. Following pressure from insurance regulators, the injunction was revisited, but upheld, in April.

Many supporters of PIP law reform were outraged and disagree with Judge Lewis.

“We are highly disappointed with this injunction, which temporarily invalidates the crux of the reform and thereby reopens the door to the fraud and abuse that the law was designed to counteract,” said Donovan Brown, Florida counsel for state relations for Property Casualty Insurers Association.

The Coalition Against Insurance Fraud also expressed its frustrations with the ruling. The organization states the injunction ignores the harm done by fraudulent medical providers that initially led to the law changes.

“Curbing crooked medical providers in this manner is a reasonable way to reduce runaway fraud,” said Dennis Jay, executive director of the coalition. “Its constitutional validity has a strong basis.”

Judge Lewis backed his decision to uphold the injunction. Skeptics are critical of the judge’s receptiveness to opposition brought on by massage and acupuncture medical providers. However, he said, the injunction is foremost to protect individuals’ rights to access the courts.

“The reason for issuing the injunction was to protect the constitutional right and prevent the potential harm to citizens injured in auto accidents who, under the present PIP statute, may not receive necessary medical care,” Lewis stated.

The Office of Insurance Regulation (OIR) filed a motion with Florida’s First District Court of Appeal seeking an expedited review of the temporary injunction and plans on pursuing any available legal options geared at overturning the judge’s ruling.

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