Florida Passes Auto Insurance Reform Law

Governor Rick Scott got the legislation he wanted to reform Florida’s mandatory motor vehicle no-fault law and crack down on the abuses in personal injury protection cases that have led to skyrocketing increases for coverage.

Whether the new measure will be effective remains to be seen.

The measure (HB 119) passed on a 22-17 vote in the State Senate after some heavy duty lobbying by Gov. Scott on Friday, March 9th just before the annual legislative session was to end. The Bill had passed the House earlier in the day.

The personal injury protection (PIP) law was adopted in 1972 to make sure anyone injured in an auto accident would quickly get money to treat their injuries. The legislation provided that a driver’s insurance company pay up to $10,000 to cover medical bills and lost wages after an accident, no matter who is at fault.

PIP costs have risen by $1.4 billion since 2008, largely because of the runaway fraud that threatens the system, most notably in the metropolitan Miami and Tampa areas. Florida ranks first nationally in staged accidents.

The legislation requires an accident victim to obtain treatment within 14 days in an ambulance or hospital, or from a physician, osteopathic physician, chiropractic physician, or dentist. The full $10,000 PIP medical benefit is available only if a physician, osteopathic physician, dentist, or a supervised physician’s assistant or advanced registered nurse practitioner determines that the insured has an “emergency medical condition.” Otherwise, the PIP medical benefit is limited to $2,500.

Follow-up services and care requires a referral from a physician, osteopath, chiropractor or dentist. Massage therapists and acupuncture was eliminated from eligibility for PIP benefits.

The bill would also establish an organization within the Division of Insurance Fraud to combat motor vehicle insurance fraud.

Health-care practitioners found guilty of insurance fraud would have their licenses revoked for five years and banned from seeking PIP reimbursement for a decade.

Another provision in the bill requires the Office of Insurance Regulation to hire an independent consultant by September to calculate the savings expected from the Act.

The bill includes a 10 percent rate reduction on PIP that’s not guaranteed. If insurers who offer PIP do not provide their customers a minimum 10 percent rate reduction, they must explain in detail why not. A second rate filing required on Jan. 1, 2014, proposes insurers have a 25 percent premium reduction for policyholders unless they can show why they’re unable to provide the cut.

The final bill represents a compromise as both the Senate and House had passed different legislation to reform PIP. However a bill must be passed by both bodies to become law.

The original House bill required those injured in auto accidents to get treatment in an emergency room within 72 hours or with the medical provider of their choice if the cost is under $1,500. It also capped attorneys' fees in both individual and class-action disputes and allows insurance companies to examine policyholders under oath when investigating claims.

The original Senate bill tightened procedures for licensing medical clinics and authorizing who can provide treatment and required long-form incident reports as a way to root out staged accidents. It updated the bill-payment system and gave hospitals priority standing in personal injury protection claims.

Lessons for Ontario:

One of the shortcomings of the Ontario system is the ability of a wide range of health care practitioners to recommend treatment and assessments. The Florida bill requires treatment recommendations come from a physician, osteopathic physician, dentist, or a nurse practitioner. Otherwise only $2,500 in treatment is available. However, in Ontario treatment has already been restricted to $3,500 for accident victims with minor injuries.

Florida has essentially delisted massage therapy and acupuncture treatment. In Ontario there is a need to limit treatment to interventions where there is scientific evidence to support those interventions.

The Florida bill would ban health care providers who are convicted of fraud from billing auto insurers for 10 years. A similar ban is needed in Ontario.

Bill HB 119 can be found here.