Tuesday, September 4, 2012

Another Reason Auto Rates are Increasing


Allstate Sues Florida Neurologic Clinic for $7.6M in False Claims

A Florida neurologic clinic that specializes in treating patients with traumatic brain and spinal cord injuries is being sued by a major automotive insurance company for more than $7 million in false claims stemming from charges it abused patients, failed to provide treatment, and kept them hospitalized without medical justification.
Allstate Insurance Co. has filed suit against the Florida Institute for Neurologic Rehabilitation, Inc., and its owner, Joseph Brennick, in the U.S. District Court for Middle District of Florida under the federal Racketeer Influence and Corrupt Act, for breach of contract, and a variety of fraud charges.
At stake, $7.6 million in allegedly false medical payments for injured drivers insured by Allstate in the state of Michigan.
The Wauchula, Fla.-based FINR advertises itself as the leader in treating traumatic brain injuries, neurorehabilitation, neuropsychiatric disorders, and spinal cord injuries. Its basic services include offering occupational speech physical therapy, and counseling to help injured drivers make the transition from the hospital to their homes.
Although FINR is located in Florida, its largest contingent of patients came from Michigan, where the company has carried out an aggressive and extensive marketing campaign using online resources, circulating print advertising materials, making presentations at conferences, and holding seminars.
No Spending Cap
Unlike most states such as Florida, which caps no-fault automobile medical benefits at $10,000 for emergency cases and $2,500 for non-emergency care, Michigan offers medical benefits with no spending cap. And those medical benefits can be paid out over an unlimited time period.
Allstate charged that Brennick through FINR took advantage of those unlimited benefits in many ways, first and foremost by keeping patients as long as possible.
Under Florida law, FINR is licensed to provide temporary services and all patients are required to have a treatment plan within three days of being admitted and a plan for being returned home or to a longer term facility within 30 days.
Specifically, the law states that “all residents shall use the transitional living facility as a temporary measure and not as a permanent home or domicile.”
Instead of developing those treatment and transition plans, Allstate charged that FINR basically “warehoused” patients so they could charge the insurer a daily per diem rate that is in some cases equaled a $1,000 per day.
For example, a 13-year old who was hurt in a motorcycle accident in 2002, spent six years at FINR at a cost of roughly $1.8 million. Investigators, however, found out the patient rarely received treatment and that the staff neglected to take into effect several other medical conditions that put into question whether he should have been at FINR at all.
Allstate also pointed to other cases where patients received little to no treatment at all.
“With the except of the few hours each day that patients received vocational training, FINR patients were largely confined to their living quarters with no meaningful therapy or rehabilitative treatment,” charged Allstate in the suit.
To hide these facts, Allstate charged that Brennick used a variety of means including falsifying medical documents and demanding per diem contracts to avoid having to itemize bills. Allstate noted that since Michigan law required it to pay FINR’s bills within 30 days of receiving them it offered the insurer little time to question any charges.
“Allstate relied to its detriment upon the presumption of honesty accorded the medical documentation submitted by FINR,” stated the insurer in the lawsuit.
This not the first time Brennick has had a brush with authorities. Previously, he had worked for his father Charles Brennick, who owned the New Medico Health Care System, a chain of 42 rehabilitation facilities.
In 1992, the Federal Bureau of Investigation launched a probe into the operation based on allegations the clinic took advantage of patients and their families by inflating their expectations over a patient’s prospects for a recovery only to discharge them when their insurance benefits expired.
As a result of that probe, the ownership of the company was turned over to Joseph Brennick, who reincorporated it in Delaware and began operating in Florida under the name FINR.
Full Attention Needed
The Consumer Federation of the Southeast reacted to Allstate’s allegations by calling on federal and state authorities in Florida, Michigan, and Connecticut, which is also removing patients from FINR, to investigate the medical facility’s practices
Consumer Federation Executive Director Walter Dartland said the government officials needed to aggressively probe FINR’s care for patients and how they bill insurance companies for those services.
“While we must ensure taxpayer dollars and consumer insurance premiums are being defended, protecting the well-being of FINR’s patients is the top priority,” said Dartland. “These grave new assertions from Allstate deserve the full attention of authorities at the state and federal levels.”
Allstate’s charges has caught the attention of Florida regulators, as the Agency for Health Care Administration, the Department of Health, and the Department of Children and Families made an unannounced inspection trip to FINR’s clinic earlier this month.
Among other things, a review of 98 FINR residents found that 50 patients didn’t even have a diagnosis of a spinal-cord injury or traumatic brain injury and, therefore, did not qualify to be treated at the facility. As a result, regulators are requiring those patients to be moved to other locations.
Regulators also cited FINR for not having initial treatment plans for patients and discharge plans as required from a transitional facility.
Another practice at FINR that is attracting the attention of regulators is the use of the so-called “Brief Assisted Required Relaxation” procedure, or as it is known, BARR.
The procedure calls for three individuals to physical restrain a patient whose behavior could cause harm to themselves or others. The physical restraint can be followed by the use of drugs to calm the patient and secluding the patient from others for an indefinite period.
The BARR procedure is supposed to be used only when all other methods to calm a patient fail. However, patients have complained that FINR was too quick and harsh in using the method and that the staff’s actions may have contributed to two deaths at the facility in the past two years.
It was all part of what Allstate lawyers labeled “a culture of abuse and violence,” which led some patients to describe to their time at FINR as being in “prison.” Since 2005, The Florida Department of Children and Families received 514 complaints of abuse or neglect, with 37 of those complaints being turned over to law enforcement officials.
On the advice of legal counsel, FINR has yet to turn over the BARR documents to regulators.
Florida DCR Secretary David Wilkins said that the three agencies are still pursuing these issues and others to ensure patients are protected.
“We will continue to investigate any allegations of abuse or neglect to this vulnerable population and provide this information to law enforcement and the other agencies involved,” said Wilkins in a statement.

Crazy Callers


Florida Man Pleads Guilty to Phone Threats to Insurer’s Employees

A 49-year-old Florida man pleaded guilty Friday to making hundreds of threatening calls to employees at the Travelers Insurance Co.
Brent Hansen of Seminole, Fla., entered guilty pleas in U.S. District Court in Bridgeport, Conn., to four federal harassment counts, the U.S. Attorney’s Office said.
Hansen was accused of making the calls and leaving more than 260 anonymous voicemails, most of them to two employees of the Hartford-based company, between March 2011 and June of this year.
Many of the messages accused the employees of being murderers, rapists and terrorists and often would include long periods of laughter and screaming, prosecutors said in court documents.
“The voicemails are hostile and consists of long tirades and rants, often for several minutes, in which the defendant states the victims are cursed and that God will damn their soles,” prosecutors wrote in a July memorandum that opposed a motion for Hansen’s release.
The FBI confronted Hansen in September 2011, and he agreed to stop the calls, but resumed making them a short time later, prosecutors said. He was arrested in July.
Hansen also was charged in 1992 with setting fire to the home of friend after an argument, but he fled to Canada before he could be taken into custody, prosecutors said. Those charges were dismissed in 2006 by prosecutors who were unfamiliar with the case because of its age, according to court documents.
Hansen faces two years in prison when he is sentenced on the harassment charges in October.
It was not clear from the court documents why Hansen targeted Travelers. A message seeking comment was left Friday afternoon for his attorney.


ISAAC Claims in Billions


nsurance claims from Hurricane Isaac have starting coming in, with one estimate saying losses to insurers could total $1.2 billion.
AIR Worldwide, which models losses for insurers, said its best estimate of losses was $1.2 billion. Insurers could have to pay up to $2 billion if it turns out winds were higher and rains produce heavy flooding, but only $700 million if losses turn out to be less.
An earlier estimate from EQECAT, another modeling firm, put Isaac’s insured damages onshore in the U.S. as between $500 million and $1.5 billion.
State Farm Insurance Cos., the largest insurer in Louisiana and Mississippi, said it had received 4,266 homeowners’ insurance claims in the two states — 3,805 in Louisiana and 461 in Mississippi. The company had received 1,144 automobile claims — 998 in Louisiana and 146 in Mississippi.
Jim Rowles, claims manager for Mississippi Farm Bureau Insurance, said the firm had received more 600 homeowners claims as of Friday, mostly in the southwestern part of the state. The firm is the second-largest homeowners’ insurer in Mississippi.
Sister company Louisiana Farm Bureau Casualty Insurance Co. had also received about 600 homeowners claims Friday, along with 125 auto claims, said claims manager Bob Warner.
“Losses are not developing at a real high rate,” said Warner, although he said the firm doesn’t cover many properties against wind in metro New Orleans.
He said flood claims may be slow to come in because many areas were still flooded Friday in Louisiana. Farm Bureau is the third-largest homeowners’ insurer in Louisiana.
The Mississippi Windstorm Underwriting Association had received about 400 claims by late Friday, assistant manager Brad Little said. Warren said many claims filed with the insurer of last resort appeared to be worth less than the policyholder’s deductible, meaning the company wouldn’t have to pay anything.
Allstate Corp., which is the second largest insurer in Louisiana and third largest in Mississippi, declined to release the number of claims it has received so far.
A spokesman for the Federal Emergency Management Agency said there were no statistics yet on how many federal flood insurance claims had been filed, and the agency doesn’t expect to have even preliminary statistics for 30 days.
“It’s too soon to tell right now,” spokesman Lars Anderson said.

Wednesday, June 13, 2012

Hurricane Checklist

Use this list for everything you'll need during and after a Hurricane!
(and please, feel free to add "your special items" to it)

Think ahead and be ready. If you do, weathering the storm will be easier.
Decide now if you're going to evacuate. Talk it over with your family.
If you're staying home find a "safe room", without windows, near the center of the house.

Remember these critical points:

1 - Get a minimum 3 day, or better still; 2-Week supply of these emergency necessities.
2 - Make your "Hurricane Kit" portable if you live in an evacuation area. 
3 - Don't forget special supplies for babies, the elderly and dependent persons.
4 - Store clean up and repair supplies in your safe room.

Prepitory
* Full Fuel Tank in the car 
* "Car Kit" inc.; tire patch or "fix-a-flat", blankets, shovel, tow rope, etc. * Full Gas Tank for the Grill 
* Bleach (without lemon or additives) 1 drop per 1 pint (8 per Gal.) of water to purify 
* Extra Cans of gas & oil (careful!)
* Fire Extinguisher (ABC rated, the bigger the better … or better still; several)
* Turn refrigerator to coldest setting and keep door opening to a minimum
* Water Purification tablets
* Water Jugs, 7 gallons of water per person
* Ice & lots of it! (freeze 1 or 2 liter soda bottles, 3/4 full, to drink later )
* Lower TV and other antennas
* Remove outdoor furniture

Personal
* Change of clothes (at least 1 set for everyone in the family)
* lots of extra socks
* Flashlights (one for everyone in the family)
* Blankets, pillows 
* Sleeping bags 
* Soap, shampoo & toiletries

Papers
* Personal Identification (drivers license, passport, etc.)
* Important Papers 
* Insurance information 
* Cash, credit cards
* Other valuable papers
* Stocks, bonds, incorporation or other company papers
* Family Photos / heirlooms

Medical
* Personal Medicines & prescriptions, extra refills. Enough for 2 weeks
* Extra Glasses or contact lenses
* Eyeglass repair kit
* First Aid Kit and Manual
(If you are not buying a commercial First Aid kit, for a good list see: Uncle Dave's First Aid kit
or contact The Red Cross at: www.redcross.org, Emergency Management, or your doctor.)

Food (must be "non-perishable)
* More Water
* Eat perishable food right after the storm (meats, cold cuts, etc. within 48 hours or until they warm up)
* Canned and dry food (put dried food in zip lock bags)
* Sandwich Makings (peanut butter & jelly, cheese spreads, crackers)
* Snacks (nuts, dried fruit, potato / corn chips … low salt)
* Non-electric can opener
* Pots and Pans
* Portable cooler (the 12v condensing kind are great)
* Cooler, for water and ice
* Eating and cooking utensils
* Sponges & Paper Towels
* Aluminum foil and / or plastic wrap
* Emergency cooking facilities (grill or camp stove)

Special Needs
* Baby food, diapers & formula 
* Toys (to occupy the children)
* Extra pet food (don't take your pet to any shelter!!) 

Misc.
* Battery-operated radio and / or TV
* Weather band radio
* Alarm clock (wind up or battery operated)
* Batteries spare for all your TV, radios, flashlights, etc.
* Cards or a board game
* Camping lantern (electric or gas)
* Butane lighter and matches
* Pocket knife / scissors * Needle & thread * Toilet paper & towelettes
* Cellular phone (service will be off similar to your reg. phone, but it's an alternative)

Clean Up After the Storm
* Gloves and goggles (for clean up)
* Heavy Shoes
* long sleeved shirt
* Bug spray / insect repellent

Evacuating to a Shelter

If you are evacuating to a public shelter (a very wise idea) there are some thing you should know and bring. Public shelters are usually set up in schools or other large open buildings to house as many people in a space as is comfortable and reasonable. Shelters only provide the basics for life; a roof, four walls, shelter from the storm (literally). When possible they will provide food, water, electricity, heat and emergency medical help. Most shelters also provide communications thou usually this is for official purposes only.

* No weapons or alcohol are allowed in shelters.
* Shelters do not accept pets of any kind. These are Health Dept. regulations.
* Some food is provided … but don't count on this. Bring snacks and sandwich makings.
* Bring your personal items; medication, toiletries, change of clothes, etc.
* Bring bedding; a camp cot, sleeping bag, pillows and blankets.
* Bring your Identification, especially something with your address to pass check points when returning.
* Bring a flashlight, radio and cards or a board game.
* Bring toys for the kids (to keep them occupied)
* Bring any special needs items; Baby needs, special health items (oxygen tank, walker, wheel chair, etc.)

Other considerations

Temporary Toilet:
It has been suggested that a 5 gallon bucket can be used as a temporary toilet. Have on hand a number of heavy trash bags and a supply of "kitty litter". The kitty litter will absorb liquids and help contain odors. Some sort of seat may be fashioned from an old toilet seat or bought at marine or camping supply stores. Hay, it's better than nothing.

Pets:
Arrange for boarding well in advance. Boarding facilities will fill up fast! It may be better to arrange with a friend out side of your home area (affected area). This can be a reciprocal arrangement. If it looks like a storm is threatening their area they can bring their pets to you. Also, contact your local Human Society, Emergency Management Agency or your veterinarian.

Boats on trailers and camping trailers:
These should be staked to the ground. If time permits, dig a shallow hole and set the boat in it with or without the trailer. Boats should be filled 1/3 to 1/2 with water for extra weight … but if is still on the trailer, watch the weight limits so as not to over load the trailer. You may also set a camping trailer in a shallow hole. This reduces the "wind profile". If you have inside storage, all the better but make sure it is a strong building.

Boats in the water:
These must be moved 48 hours before landfall. Anchor in a secluded / sheltered bay or inland area (hurricane hole). Intercoastal Waterway bridges will be locked down for evacuation of the beach areas. For more information contact your harbor master, marine patrol, U. S. Power Squadron or U. S. Coast Guard.

Mobile Homes, Trailer Homes, and RV's:
Obviously this is no place to be in a hurricane! These places are usually mandatory evacuation areas. See the information on "Evacuating to a Shelter". You may also contact your local government, Emergency Management Agency or FEMA for more information on evacuating or securing these dwellings.

Communications:
After the storm (usually 72 hours) communications should be possible to your loved ones outside of the affected area. The Red Cross, some shelters and other "official outlets" will have access to message passing amateur radio operators. Most often the rule is; All "health and welfare" message (that are not urgent or a true emergency) will be held 72 hours so that the official and emergency messages may be transmitted. Please tell your loved ones about this and that they may not hear from you for a few days.
Other communications systems may be set up as well. Local phone companies have been known to set up (some times for free) "emergency pay phone trailers". These are medium to large trailers with eight or more phones hooked in to a hastily repaired line.

Utilities:
Public Utilities (power, phone, cable TV and gas) will be repaired as quickly as possible. Usually in the hardest hit areas first. When waiting for your phone service (cellular too) and power to be restored please remember; this is a large, wide spread disaster. Many people are affected. Please be patient!
Also, service may "flicker" on and off for a while. Many people will be trying to use the limited resources. Phone lines will be clogged and power will be stretched. 

Returning home:
If you have evacuated or have left your home for supplies and you are returning here are some other things to keep in mind. 

* Because of looters and "sight seers" you will need to produce identification (with your address) to pass check points and get in to some of the harder hit areas.
* You will not be allowed in to hard hit areas that are still dangerous (broken gas mains, power lines down, dangerous debris, etc.)
* Prepare your self! As long as you and your family is safe … your home and possessions can be replaced! If you are feeling apprehensive about the condition of your home bring a friend for emotional support (and to help clean up). You have survived some of Mother Nature's worst … now it's just time to clean up and get life back "on track".

Sources of Further Information:

(most of these are in the "white pages" or "blue pages" of your phone book)
The Federal Emergency Management Agency (www.fema.gov).
Local city government
Local county government
Local emergency management
The Salvation Army
The American Red Cross
Local TV and radio stations.

Also check and ask questions at;
Book stores for books on weather, hurricane survival, natural disasters, etc.
Local libraries
The National Weather Service
Marinas, RV and camping stores

This information is compiled by: Dave H. Messinger, N4QPM. I am an Amateur Radio Operator, Florida resident, Emergency Medical Technician and volunteer for Palm Beach County Emergency Management. I can be reached through uncledave@uncledave.org.

Return to Palm Beac Co. ARES's Home Page
Return to Uncle Dave's Home Page

Gov. Scott to Florida Insurance Agents: There’s More Work Ahead


Fla. Gov. Rick Scott
Florida has made a good start on addressing some of the state’s most pressing insurance issues such as pursuing ways to depopulate the state-backed homeowners insurer and reforming the no-fault auto insurance law, but more remains to be done, says Governor Rick Scott.
Speaking at the Florida Association of Insurance Agents Annual Convention and Education Symposium, Scott laid out his perspective on the state of the state’s insurance environment.
At the top of his agenda is his ongoing to push to depopulate Citizens Property Insurance Corp. that now has 1.45 million policyholders.
“It has $500 billion in risk; why you would ever do this makes zero sense,” said Scott. “We have to fix it. We have to fix it. There is no way this can continue.”
Scott said that one issue that is largely overlooked when it comes to Citizens is that though it is backed by policyholder assessments, no one knows if policyholders around the state have the ability to pay that bill if it becomes due.
“The average Citizens premium is $2,300 and potential assessment is $1,200,” Scott said. “How many families have that in the bank? We have no idea. How many would have it after a hurricane? We have no idea.”
Scott told the agents it is up to them to talk to policyholders and raise their awareness of the financial burden they could face. Citing the example of personal injury protection (PIP) fraud, he said it is essential if lawmakers are to ever seriously tackle the issue.
“At the capital things only get done when people aggressively demand it,” he said
Scott praised Rep. Jim Boyd, R-Bradenton, who was the primary architect of the bill that eventually became the basis for the PIP reforms.
After decades of effort, lawmakers finally rewrote the law, narrowing the list of eligible providers, tackling medical utilization and imposing fee schedules. The new law also includes some tort changes and gives law enforcement officials, regulators and insurers more ways to attack fraud.
“I don’t know how we would have accomplished it without him,” said Scott.
Scott warned, however, that already people are looking to scam the system and it will take vigilance on the part of all concern to ensure the new law’s success.
Boyd said that while he agreed with the governor that PIP will be an ongoing concern, he has no plans to introduce another bill on the issue in the near future.
“I think we need to take a break for a little while,” said Boyd, who is also CEO of Boyd Insurance & Investment Services. “We need a year to see the effects on fraud and the results of premium reductions.”
While property issues were Scott’s primary focus, he did restate his longstanding opposition to the federal Affordable Health Care Act, dubbed “Obamacare,” which is currently being weighed by the Supreme Court.
Scott was among the first state governors to come out against the bill and has turned away millions in funds to start implementing its provisions.
“The government should not become a special interest group and dictate to the insurance industry how to run its business,” he said.
Scott’s comments were favorably received by the some 500 agents in attendance at the FAIA’s annual Saturday morning breakfast meeting.
FAIA President Jeff Grady said Scott’s goals closely align with the association, which didn’t support Scott in his initial bid for governor.
However, the association has since largely supported Scott in his campaign for changes to Citizens and after he made PIP reform his top legislative agenda.
Grady said that agents support Scott’s view that the industry needs less regulation as part of an overall change in how private companies view the state.
“We can’t agree more strongly with the governor’s desire to fix Citizens and reduce regulation,” said Grady. “There is a lot of capital out there and we just need to find it a way to come to Florida.”


Sunday, May 6, 2012

Citizens Insurance Spends Billion$ on Reinsurance


Florida’s Citizens Issues Largest Catastrophe Reinsurance Bond on Record

Florida’s Citizens Property Insurance Corp. has entered the catastrophic bond market in a big way by issuing $750 million in bonds, making it the largest insurance-linked security deal of its kind.
Citizens Property Insurance Board Chair Carlos Lacasa declared it to be “a historical day for the state of Florida in reducing the potential for assessments on all Florida policyholders after a catastrophic event.”
According to the Artemis Catastrophic Bond and Insurance-linked Securities Deal Directory, the bonds are being issued through Everglades Re Ltd., a Bermuda domiciled special purpose insurers set-up for the sole goal of issuing Citizens-backed securities.
Initially, officials projected offering $200 million in securities. However, due to interest from investors, the deal reached $750 million making it the largest single peril cat bond in the history of the insurance linked securities market. Until then, the largest single natural catastrophe bond deal was the $600 million offering by Residential Reinsurance 2007 Ltd.
Citizens officials said that 32 investors participated in the deal, many of whom are new to the cat bond market. The investors, who have yet to be identified, likely are sophisticated institutional investors, insurance-linked investors and pension fund managers.
While the proceeds from the deal would cover both Citizens’ personal lines and its coastal lines accounts, most of it would be earmarked for wind-only coverage on properties located along the state’s coastline. The notes would cover losses above an attachment point of $6.35 billion up to $7.35 billion
The rating agency Standard & Poor’s rated the bonds at B+.
Everglades Re projected that the bonds would pay rates of return between 16.5 percent and 18 percent higher than those offered by the Treasury Money Market Fund.
Citizens Chief Financial Officer Sharon Binnun said the insurer was “pleasantly surprised,” by the size of the deal. The insurer has been working for several years to shift its financing so that it is not so dependent of policyholder assessments.
“We can’t stop the wind from blowing,” said Binnun. “But we can reduce the possibility of assessments.”
More Private Deals to Come
As significant as the $750 million industry-linked securities deal is to Citizens’ overall financial picture, officials say they are not done when it comes to seeking out more private investors’ money.
In December 2011, the Citizens board set out a goal of transferring at least $1 billion of its financial exposure to the private market. With the Everglades Re Lt., deal done, the insurer can now focus on the more traditional reinsurance market. And since many of them didn’t participate in the Everglades Re deal, they still have plenty of capital to work with.
Binnun said the Everglades Re deal opened a whole new door when it comes the capital markets, which benefits Citizens and private insurers alike.
“This brings to Citizens a significant increase in the diversification and capacity of risk transfer resources, while not adversely affecting the availability of risk transfer for the Florida private market,” Binnun said.
The Citizens board of governors is slated to meet later this month to discuss its investment strategy.
After having met three-quarters of its private risk-transfer goal, and given investors interest in the investing in Citizens, officials are likely to up the ante when it comes to executing private market deals.
“Our direction to management is to continue to secure a significant amount of additional risk transfer through the traditional reinsurance markets,” said Lacasa. “I look forward to a total risk transfer program in excess of the $1 billion budgeted for 2012.”

Florida Governor Sign Anti Fraud Bill


Florida Governor Signs Long-Awaited Auto Insurance Anti-Fraud Bill

Florida’s decade long attempt to reform the state’s automobile no-fault insurance law has finally paid off.
Gov. Rick Scott, flanked by rows of law enforcement officials and state officials, signed into law HB119, a measure that was a centerpiece of his successful 2010 run for governor. Sponsored by Rep. Jim Boyd (R-Manatee), the new law is a comprehensive re-write of the state’s automobile personal injury protection insurance law.
Among other things it requires accident victims to report an auto-related injury and seek treatment within 14 days. The policyholders could receive up to $10,000 in benefits for emergency medical care and $2,500 for other less serious injuries. The law also specifies that massage therapists and acupuncturists are no longer eligible to receive medical payments.
The new law has a host of anti-fraud provisions and attempts to control litigation costs by prohibiting the use of contingency risk multiplier when calculating attorney fees. It changes medical payments and includes a detailed list of approved medical providers who are eligible to receive PIP payments.
Scott thanked law enforcement officials, saying that “when they get involved, things get done.”
He also singled out the state’s Consumer Advocate Robin Westcott for leading a six-month study group on the issue that for the first time focused on PIP’s cost to consumers.
He also highlighted Insurance Commissioner Kevin McCarty’s role in putting the numbers together to show just how much insurance rates are being affected by PIP rates. “You were very helpful in the last week getting this thing done,” he said to McCarty.
Scott wryly noted that those affected adversely by the law are already looking for ways around the law. He cited an email from an unnamed medical provider that promised to fill out the paperwork showing an alleged accident victim had a serious injury thus being eligible for the higher benefit amount.
“They are already out there trying to game the system,” said Scott.
Since the bill was passed by the legislature, two issues have emerged as concerns.
The first is a loophole that could affect medical provider payments.
For example, medical providers and entities may charge insurers and injured parties a reasonable amount for services, which could include the use of the federal Medicare payment rates. That portion of the bill is effective July 1.
However, as of January 1, 2013, the new list of approved medical providers limits payments to groups such as physicians, hospitals, and chiropractors, and no longer includes massage therapist and acupuncturist..
Provider groups are worried that insurers will ignore the July 1 deadline and not make medical payments until the January 1 provider list becomes law. That could result in some medical providers now covered under the PIP law not receiving payments and with little recourse to do something about it.
The state, however, is already taking steps to head off any problems.
Florida Office of Insurance Regulation Jack McDermott said regulators plan to deal with the issue through rules and executive orders.
One solution already moving forward is a draft rule by the Agency for Health Care Administration, which would clarify which medical provider gets paid and during what time period.
“The purpose of the bill was not to create a six month gap,” McDermott told reporters. “AHCA has publically said that are going to issue rules to clear this up and we’ve encouraged insurers privately that PIP providers should be paid.”
Insurers are also wary of any rate cuts that are called for before the expected savings from the law are realized.

As of October 1, all insurers must submit a rate filing with the OIR that reflects a 10 percent reduction in the PIP portion of their rates and provide a detailed reason why it is unable to do so. A similar provision kicks in on January 1, which contemplates a 25 percent reduction in PIP rates.

The law calls for an actuarial study to be conducted by an independent firm that will project the law’s expected impact on PIP losses.

OIR spokesperson Amy Bogner said that regulators would still have the authority to ensure that insurers comply with state law. She pointed to that portion of the state’s rating law that requires rate changes to be actuarially justified and not “excessive, inadequate, or unfairly discriminatory.”

The legislation “would not change our current duties and our responsibilities,” Bogner said.
Following the law’s passage, Florida Insurance Council Vice President Sam Miller said that insurers are already contemplating how the new PIP law will affect their rates. He said that while the rate language concerns insurers, the fact that it is not a mandate creates the expectation that the rate decreases will be based on numbers and not just arbitrary political decisions.
“Companies are concern that rates will be rolled back before there our corresponding losses,” said Miller. “But we expect the law to operate on actuarial data and that the OIR will administer it fairly.”