Auto Insurance Reform Passes

Florida Passes PIP Reform Bill

Gov. 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 Senate after some heavy duty lobbying by Scott and others on Friday before lawmakers adjourned at the stroke of midnight.

“I think it’ll make a big difference in cutting down on fraud,” Sen. Joe Negron said Saturday. Negron, R-Stuart, was the architect of the Senate bill and lead negotiator on finding a compromise with the House.

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.

“Floridians are in for a rude awakening,” Florida Consumer Action Network spokesman Bill Newton said. “Instead of measures aimed at preventing true fraud, we’re left with a bill that pads the pockets of big insurance companies.”

Some lawmakers agreed.

“The formula is controlled by the insurance companies,” said Sen. Miguel Diaz de la Portilla, R-Miami.

The measure almost didn’t make it to a final vote. Senators voted to accept House changes to its proposal by a 21-19 vote, with Sen. Bill Montford of Tallahassee the lone Democrat to vote for it. A tie vote would have doomed the measure for at least another year unless Scott ordered lawmakers back for a special session.

“It was not a perfect bill,” Montford said. “This is one at least that we can begin to address the PIP issue. There will be a risk.”

Whether or not Montford needed any persuading, some of his colleagues did.

Senate President Mike Haridopolos collected some IOUs to get the measure passed.

“I was focused on getting PIP passed and delivering those votes to the governor,” Haridopolos said. “When I had to call in a couple of favors today on a tough vote that will lower the cost on auto insurance, some people on the fence said, ‘you know what Mike, I’m going to give you this vote.”’

The 23 senators and 80 state representatives who voted for PIP immediately received hand-written thank you notes from Scott, who had made PIP reform his marquee issue of the session.

The final product, however, was very different from where both the House and Senate began.

The Senate sought a guaranteed 25 percent rate reduction on PIP, but settled for a 10 percent reduction 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.

“Can we trust what insurance companies tell us?” Rep. Scott Randolph, D-Orlando, asked during Friday’s floor debate in the House.