Florida Looks to Tampa as Leader in Fight Against PIP Fraud

By | November 10, 2011

The move by one Florida county to crack down on auto insurance fraud by targeting staged accidents and regulating clinics is being seen as a roadmap for state officials looking to reform the state’s no-fault auto insurance law.

Gov. Rick Scott and Chief Financial Officer Jeff Atwater, along with other state officials, held a public meeting with local Tampa officials and citizens to discuss the state’s growing personal injury protection (PIP) insurance fraud problem, which officials say is driving up premiums for state drivers by hundreds of dollars.

“This is an area that is costing our citizens millions of dollars,” said Scott, who favors making the insurance optional. “If we don’t do something, it will go up 20 percent per year.”

Hillsborough County, which includes Tampa, has become ground zero in the debate over PIP fraud. The National Insurance Crime Bureau (NICB) ranks Florida number one in staged accidents with Hillsborough County ranking third on the list behind Miami-Dade and Broward counties.

The Hillsborough sheriff’s department has targeted staged accidents by stepping up patrols and surveillance, while actively asking local drivers to report suspicious accidents. In the last 15 months, the department reported 123 arrests that have resulted in 150 criminal charges due to staged accidents.

Hillsborough Sheriff David Gee, however, said that is just a fraction of the incidents taking place in the area even as the sheriff’s department has devoted more resources to investigating auto accidents.

He stressed, however, that under current law these cases are a challenge to prosecute.

“These are difficult cases to make,” Gee said.

The county has also seen a proliferation of medical and pain clinics that primarily treat PIP patients. In Hillsborough County alone there are an estimated 158 such clinics as compared to 74 in Pinellas County, 22 in Pasco County, 20 in Manatee County, and 17 in Polk County.

In Florida, every driver is required to carry $10,000 of uninsured motorist coverage to pay for collision damages or slight injuries, which is designed to take care of small claims without the need for litigation. State officials, however, say that the some clinics have been set up to treat alleged accident victims just to collect the money and the lack of state oversight is resulting in insurers paying millions in fraudulent claims.

The Hillsborough County Commission recently enacted a local ordinance targeting the business practices of the clinics. The first of its kind in the state, the ordinance defines a PIP clinic as one where PIP clients accounted for 90 percent of their gross income or bills insurers more than $200,000 in PIP claims annually.

Among other things, the ordinance requires clinics to be open for business at least three days a week, during regular business hours from 9:00 a.m. to 5:00 a.m., to see walk-in patients or allow patients to make appointments for services, therapy, and other treatment.

The ordinance also requires a physician to oversee the clinic’s operations and be physically present at the clinic at least three days a week for four hours per day. Failure to comply with regulations can result in a $500 fine and up to 60 days in jail and prohibit participating physicians from operating another clinic for five years.

Atwater praised local officials for targeting the clinics and said it should serve as a model for state lawmakers who are expected to tackle PIP reform when the legislature convenes next January.

“Regrettably, you had to go first,” he said. “Let us export the good work of Tampa Bay and get this burden off the back of all Floridians.”

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