Florida lawmakers are heading to a showdown over the state’s no-fault automobile insurance law with state Senate lawmakers seeking to reform current law as opposed to a House plan that would repeal the law in favor of a new insurance scheme.
The Florida Senate Banking and Insurance Committee approved SB 1860, sponsored by Sen. Joe Negron (R-Stuart), which includes a laundry list of reform proposals ranging from implementing medical fee schedules, licensing medical clinics that provide personal injury protection (PIP) benefits, and requiring insurers to promptly pay claims.
“This is a bill that transforms PIP back to what it was intended to be, which is to provide peace of mind to individuals injured in an auto accident,” said Negron.
Insurers, consumers, and many state officials say that the PIP benefits have created a system where unscrupulous attorneys, medical clinics and health care providers fraudulently collect the benefits. Once the law’s $10,000 threshold is breeched, drivers and their attorneys are free to sue other drivers and their insurance company.
Negron said his bill seeks to follow the goals laid out by Gov. Rick Scott and Chief Financial Officer Jeff Atwater to reduce costs and close the loopholes that are allowing individuals to commit large scale fraud.
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.
Standing in support of the bill were business groups including the Florida Chamber and Associated Industries of Florida, along with consumer groups including the Florida Consumer Action Network.
However, while most insurance groups offered their tacit support for the bill, others expressed their reservations.
American Insurance Association representative Gerald Wester told Senate lawmakers the association is leaning toward supporting their bill. However, he signaled that it would rather favor a bolder set of reforms such as those proposed by the House.
“In my view, we really need a game changer,” said Wester.
The Senate bill does stand in stark contrast to what lawmakers are pushing for in the House.
Sponsored by Rep. John Boyd (R-Bradenton), 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.
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 to massage therapists and acupuncturist, it would exclude chiropractors from receiving PIP payments for medical treatments.
The Senate and House are also split over attorneys fees.
The House contains some far reaching litigation reforms including, instituting an attorney fee schedule, eliminating the contingency risk multiplier, and allowing insurers to exam claimants under oath even if they have not filed suit.
State Farm Mutual Insurance Co. representative Mark Delegal said that in the addition to changes in attorney reimbursements, insurers needed to be able to conduct examinations under oath to determine the validity of a claim.
Negron, however, said that such claims amount to a legal deposition of prospective claimants who could be without legal representation.
“The insurance companies cannot have it both ways,” said Negron. “You can’t complain about the amount of litigation and then want another litigation tool.”
Insurers are hoping to change the Senate’s attorney fee provisions to mirror the House at its next committee of reference, the Senate Budget Committee, which is chaired by Sen. J.D. Alexander (R-Gainesville), who traditionally is more supportive of the industry.
Senate Banking and Insurance Chair Garrett Richter (R-Naples) predicted that the bill will likely undergo changes, but remarked the path ahead will not be easy.
“This is like changing a tire on a moving car, hopefully will end up with four good tires,” Richter said.