To Tallahassee and Back: Personal Injury Protection

I thought I would take the blog in a new direction this week. Rather than talking about a particular aspect of the legislative process, I decided I would discuss a specific issue that was addressed by the Florida Legislature earlier this month. 

I have chosen one that impacts everyone who drives a car: Personal Injury Protection. This portion of a driver’s automobile insurance policy, commonly known as PIP, falls under Florida’s Vehicle No-Fault Law. Under current law, it provides $10,000 in medical benefits for those injured in a car accident. Legislation that is now heading to the governor’s desk changes many aspects in which those benefits can be used. 

PIP reform tends to be a controversial subject to tackle. In 2001, PIP was reformed in response to a grand jury report that stated that fraud was extensive.  PIP was reformed again in 2003 with strengthened penalties for fraud and increased regulation of clinics that provide medical care for PIP recipients.  During that year’s reform legislation, the No-Fault law was set to expire on October 1, 2006.  In 2006, the Florida Legislature passed a bill during its regular spring session to extend the No-Fault Law. but it was vetoed by the governor.  After No-Fault expired the Legislature met in special session in 2007 and reenacted itas of January 1, 2008.  

In the waning hours of the final day of this year’s session, HB 119 sponsored by Representative Jim Boyd of Bradenton (companion to SB 1860 by Senator Joe Negron of Palm City) returned to the Senate for final consideration and passed with a vote of 22-17.  Its final vote in the House was 80-34.  The main purpose of the bill is to reduce fraud and change the environment in which “staged accidents” become profitable.  “Staged accidents” are criminal acts under which fake auto accidents occur so that those in on the fraud can bill for benefits under PIP coverage.  The governor had previously stated if the legislature did not act during the regular legislative session he would call lawmakers back to Tallahassee for a special session to address PIP issues. 

Reforms have very “real life” impacts on those who provide care to people injured in accidents.  2012’s legislation limits or changes coverage for services provided by chiropractors, massage therapists, acupuncturists and attorneys. The legislation requires that someone injured in an accident must seek treatment within 14 days.  The full $10,000 PIP benefit is only available if a physician, osteopathic physician, dentist, physician’s assistant, or ARNP determines the insured has an “emergency medical condition.” Otherwise the PIP benefit is limited to $2,500.  The bill also creates a new $5,000 death benefit under PIP. Current law states that the death benefit must come out of the existing $10,000 benefit. 

If the bill becomes law it will allow insurance companies 60 additional days (90 days total) to investigate suspected fraudulent claims.  To discourage the insurer from holding up claims without cause, the bill requires the insurance company to pay interest on those claims. Health care practitioners found guilty of insurance fraud will lose his or her license for 5 years and may not receive PIP reimbursement for 10 years. 

The legislation requires a beneficiary to comply with policy terms including the submission of an examination under oath. Those who make claims must comply with this provision or else they will not receive benefits. 

The bill creates a non-profit direct support organization that can accept private donations for the purposs of preventing, investigating, and prosecuting motor vehicle insurance fraud.  This organization is to be called the Automobile Insurance Fraud Task Force. The proposed law prohibits Florida’s Chief Financial Officer’s PIP Fraud Task Force from using funds for advertising when using the likeness or name of any elected official.  

Cost savings mandated by the legislation will be achieved in this fashion.  By October 1, 2012, insurance companies are required to submit a rate filing to the Office of Insurance Regulation that requests at least a 10% rate reduction for PIP coverage.  If the company does not it must document the reasons for its failure to reduce rates by that amount. A second rate filing must be made by January 1, 2014 at which time it must reduce rates by at least 25%.  If a company is unable to do so it must document its reasons why not. 

The governor will have 15 days to either sign, veto or allow the bill to become law without his signature once it has been delivered to him. 

I welcome your questions about the legislative process or any subject that lawmakers may have considered. Please feel free to leave your questions in the comment section and I will answer them in an upcoming post.  If there is a specific topic you would like me to write about please let me know as well.  

Tallahassee and Back: Thoughts and Observations About Laws that Impact You is an ongoing blog by State Sen. Mike Fasano's chief legislative aide. You can e-mail him at GIORDANO.GREGORY.S11@flsenate.gov.