THE CAPITAL, TALLAHASSEE, April 12, 2011 --
In room packed with lobbyists who last tilted lances at each other in 2007, a Senate committee on Tuesday approved a pair of industry-backed measures that will make it easier for insurance companies to deny claims in automobile crash injury cases following a new explosion of fraudulent claims.
By close votes, the Senate Banking and Insurance Committee approved two measures - SB 1930 and SB 1694 - capping attorney fees and making other changes to laws regarding personal injury protection insurance, which provides motorists up to $10,000 in medical coverage following an accident regardless of who is at fault.
Established to provide injured motorists with a relatively hassle-free mechanism to obtain medical care without having to go to court, the system last underwent a major overhaul in 2007. Changes made at that time, however, appear to have done little to stop - and may have nurtured - a growing, clandestine industry of false claims, with perpetrators betting insurance companies will pay most claims to avoid the expense of litigation, lawmakers heard.
The number of referrals to the state’s Division of Insurance Fraud continues to rise, jumping from a three-year total of 3,942 cases between 2002 and 2005 to 5,500 referrals for the 2009-10 fiscal year alone.
An Office of Insurance Regulation report released Monday showed overall insurance payments up 66 percent between 2006 and 2010. Meanwhile the number of lawsuits filed against insurers increased 387 percent.
“We have allowed unscrupulous folks to mine money out of the system at an incredible rate,” said Sen. J.D. Alexander, R-Lake Wales.
Sponsored by Sen. Ellyn Bogdanoff, R-Fort Lauderdale, SB 1930 makes a number of changes sought by the insurance industry. It requires medical providers and policyholders to testify under oath and requires that patients and providers sign all documents related to their cares.
The bill extends the amount of time insurers have to pay claims from 30 to 90 days when the insurer suspects the claim may not be legitimate. The measure also allows insurance companies to tour clinics and other health facilities where treatment is occurring. The proposal passed on a 7-4 vote.
More controversial is a measure that caps attorney fees on personal injury protection cases to a maximum of $10,000. The tiered cap would be less for inexpensive claims but could not exceed the upper $10,000 level; a restriction that plaintiff’s attorneys say is too low for more complicated cases. That bill passed on a 6-5 vote.
“We are not looking to give insurance companies a huge advantage to cut off claims payment,” Bogdanoff said. “The intent is to make sure they have the information they need to pay a claim.’
Critics, however, say the bills favor insurers.
“Basically, you’re giving insurance companies 21 more ways to deny a claim,” said Kim Driggers, attorney with the Florida Chiropractic Association, which opposes the bill.
Some committee members supporting SB 1930, the measure dealing with the claims process, said their support will evaporate in subsequent committees and on the floor if changes aren’t made to the complex bill to hold insurers’ feet to the fire to quickly pay legitimate claims.
TALLAHASSEE, Fla. – The Senate Banking and Insurance Committee today passed a bill targeting fraud in Florida’s automotive personal injury protection (PIP) insurance industry. Senate Bill 1930, sponsored by Senator Ellyn Bogdanoff, R-Fort Lauderdale, provides consumer protection against staged auto accidents. It includes provisions which crack down on scams and offers tools to help law enforcement officers fight motor vehicle PIP fraud at the scene of the crime.
“We see it in many forms, including staged car wrecks or bogus medical claims,” said Bogdanoff. “Swindlers play the industry like a game. Floridians should not be forced to pay higher premiums due to these unscrupulous individuals taking advantage of no-fault auto coverage.”
Senate Bill 1930 revises the Florida Motor Vehicle No-Fault Law and related statutory provisions to help eliminate fraud up front. For accidents in which a passenger complains of pain or discomfort, the bill requires responding law enforcement officers to list the names and addresses of all passengers involved in a crash using Florida’s “Long Form” Traffic Crash Report. It also establishes the Fight Auto Fraud Fund, a direct-support organization to assist with the prosecution, investigation and prevention of motor vehicle insurance fraud – the organization will be led by a board of directors to include the state’s Chief Financial Officer (CFO) or a designee of the CFO.
The bill also requires an insurance fraud notice for medical providers who knowingly submit bogus applications for clinics that treat auto crash victims. The bill requires disclosure of the patient log in readable language within 30 days of receiving a written request from the insurer.
Additionally, the bill provides that any claimant who knowingly submits a false or misleading claim cannot receive any PIP payments. Finally, SB 1930 provides insurers with more time to investigate suspicious claims and authorizes them to conduct an on-site physical examination of the patient’s treatment facility.
“This bill combines a number of components suggested by consumer groups to help push forward protective measures and eliminate lawsuits resulting from fraud,” added Bogdanoff. “PIP was originally designed to keep the legal system out of the process and help people obtain their benefits as fast as possible. With this bill, we can help eliminate costs that increase our insurance premiums.”
Related legislation, House Bill 1411 sponsored by Representative Jim Boyd, R-Bradenton, is also moving through the process. For more information on SB 1930 and other bills before the Florida Legislature, visit www.flsenate.gov.