A pair of bills aimed at cracking down on the runaway fraud that has vexed automobile insurers in recent years moved through a key Senate panel this week.
The Senate Banking and Insurance Committee narrowly approved the measures following some lively debate among lawmakers trying to find a way to eliminate the crooks and provide lower rates for drivers. The bills move forward with the backing of the insurance industry, which would have more ability to reject claims if the legislation passes in its current form. Both still have other committee stops before reaching the floor sometime later in the session. Similar legislation is also moving through the House.
Orlando attorney Mark Cederberg, cautioned lawmakers not to give the insurance industry too much freedom.
“Once an insurance company decides they want to deny a claim, there are no holds barred,” Cederberg testified. “They will run you through the wringer.”
He also said it would make it more difficult for honest doctors to have their bills paid.
Insurance companies, medical providers, and attorneys agreed they’re faced with a fraud-riddled system and can identify where most of the bogus claims originate, but disagreed on the best way to fix an issue that has defied resolution for years.
State Sen. Ellyn Bogdanoff apologized for not having solving the problem in 2007 when legislation she shepherded while in the House inadvertently led to increased fraudulent activity.
“Whatever we did in 2007, we messed up,” the Fort Lauderdale Republican said. “We need to fix it.
“They’re kind of enjoying the fruits of that labor. So why do you want to turn the spigot off?” asked Bogdanoff, who has been working on the issue for years and was clearly frustrated with some of the recent posturing on the issue. “I don’t believe there is a sincere effort on some of the interest groups to actually come to a reasonable conclusion.”
Bogdanoff said she was upset that those voicing their objections had never approached her about her bill (SB 1930), which was approved on a 7-4 vote and heads for the Senate Criminal Justice Committee.
“I want it to work,” she said. “I don’t want it to hurt anybody.”
Sen. Joe Negron, R-Stuart, voted with her on the measure, but predicted that support would evaporate in subsequent committees and on the floor if significant changes aren’t made to ensure that insurance companies pay legitimate claims in a timely fashion.
“Let’s not use fraud as a rationale for all these other parting gifts, such as allowing three months to pay a bill,” said Negron, an attorney. “Let’s not go to the other extreme and act like every person involved in an auto accident is a potential crook. People are involved in auto accidents and do have injuries.”
The other personal injury protection measure (SB 1694), sponsored by Sen. Garrett Richter, R-Naples, to cap attorney fees at $10,000 on PIP claims stayed alive on a 6-5 vote.
The committee was armed with a new report from the Office of Insurance Regulation that showed the enormity of the fraud, especially in several of the state’s largest population areas. OIR reported that some $8.7 billion has been paid out by Florida insurers since 2006 in PIP claims.
PIP has a long history in Florida where lawmakers adopted a no-fault automobile plan 40 years ago that was designed to provide benefits in a timely manner for a person injured in an automobile accident regardless of who was at fault. The plan, which took effect on Jan. 1, 1972, provided payment for medical, wage loss and death benefits, but did not limit the insured’s right to sue for non-economic losses.
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