Florida automobile insurers are hoping a court lifts an injunction that has blocked portions of the state’s 2012 no-fault law from taking effect.
Florida’s First District Court of Appeals recently heard oral arguments in the case [McCarty v. First DCA 13-1355], which has its origins in a 2012 rewrite of the state’s personal injury protection (PIP) law.
The law modified PIP benefits so that accident victims with emergency injuries may receive up to $10,000 in medical coverage while those with non-emergency injuries get only $2,5000 in coverage. The law also requires that victims must seek treatment within 14 days in order to qualify for coverage.
The new law also removed acupuncturists and massage therapists from the list of PIP providers while limiting the services that chiropractors could provide patients.
Florida Second Circuit Court Judge Terry Lewis earlier this year issued a temporary injunction preventing those changes from going into effect.
While sympathetic toward the medical providers claims that the new law threatened their livelihoods, Lewis’ injunction turned on the ability of individuals to have access to 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, may not receive necessary medical care,” wrote Lewis in April.
In a somewhat contentious hearing before a three-member panel of the First District Court of Appeals this week, the judges struggled to resolve whether the medical providers had any standing to bring forward the case.
State Solicitor General Allen Winsor, in his opening remarks, argued Lewis’ ruling should be squashed given the fact that Lewis provided no specific instructions to regulators or insurers of how to comply with the injunction.
More to the point, Winsor said, the current injunction did not involve an accident victim or insurers that provided a basis for showing how the PIP reforms did or did not bar them from accessing the court. That, he said, could only be resolved in an actual lawsuit between an accident victim and an insurer.
“With respect to this claim, we have the wrong defendant and the wrong plaintiff,” said Winsor.
Furthermore, Winsor said, Lewis’ opinion to the effect that the PIP reforms no longer made the no-fault system a “reasonable alternative” to a pure tort system is a judgment call that should be left to the Legislature.
“Yes, benefits have changed,” said Winsor. “But that doesn’t eviscerate the system. Balance is in the eye of the beholder and reasonable people can disagree.”
Florida PIP Legal Defense Fund attorney Adam Levine, representing medical providers, argued that they had standing to bring the case since without the involvement of medical providers, accident victims have no basis to go forward with a case.
For example, under the PIP law, an accident victim can only file suit for non-economic damages in cases where the victim has suffered a permanent injury or prominent scarring. Therefore, Levine said, that accident victims in effect subrogate their legal rights to sue an insurer to the providers.
While conceding that the medical providers have an economic incentive to once again be PIP providers, Levine nevertheless said the lowering of benefits to $2,500 for non-emergency care and only having 14 days to seek treatment are provisions that infringe on accident victims’ ability to bring forward a suit.
“People are losing their doctor-patient relationship and patients are no longer seeking treatment and that is causing irreparable harm,” said Levine.
Justice Kurt Wetherell, however, appeared skeptical about the case, questioning more than once whether it was a case at all.
He said that the case revolved more about the economic impact of the PIP reforms on these specific medical providers’ livelihood than about its impact on accident victims.
“With all due respect, the problem in this lawsuit is the ability of these providers to be paid by PIP, isn’t that the bottom line?” said Wetherell.
Justice Stephanie Ray said she was somewhat sympathetic towards the economic losses suffered by the medical providers. However, Ray noted that Lewis’ injunction is also having an effect on insurance companies that, even though they are not directly a party to this case, are being placed in an untenable position due to Lewis’ injunction.
“It seems to me that the insurance companies are somewhat in a ‘Catch-22’ since we still have a valid statute on the books and then we have this injunction in place with no specific order,” said Ray.
Meanwhile, the pace of insurers submitting rate filings to regulators has slowed to a crawl. According to the state’s Office of Insurance Regulation, this year only 24 auto insurers have submitted filings on the PIP portion of their policies, while last year there were 195 filings.
Donovan Brown, state government relations council for the Property Casualty Insurers Association, said insurers are hoping for a quick resolution to the issue that will remove the uncertainty that is currently running through the industry.
“In order to address fraud and abuse within Florida’s no-fault insurance it is imperative that consumers receive the benefit of the PIP reforms becoming fully effective,” said Brown in statement.
Florida Senate Banking and Insurance Chair David Simmons (R-Altamonte Springs) said he has been approached by auto insurers expressing their willingness to scrap the state’s no-fault system and move to a pure tort system.
Earlier this year, Simmons proposed a “place-holder” bill that actually would have done that in the event the court ruled against the PIP reforms currently being considered by the First DCA. The bill contemplated ending PIP coverage in favor of requiring drivers to carry mandatory bodily injury insurance. Bodily injury coverage pays higher damage limits, but only to a driver found not at fault in an accident.
Now, Simmons said it is time for lawmakers to consider making that change regardless of any legal action.
“It is time for us to investigate this and not simply depend on how the DCA might rule,” said Simmons.