OAI: Payment Gap in Fla. Law Reopens Reform Debate on Auto Insurance

Florida's insurance reform effort is getting clarified by state officials, questioned by medical professionals and decried by detractors in the week after Gov. Rick Scott signed HB 119 into law, highlighting uncertainty that still hangs over its implementation and full impact on the state's no-fault system, according to Online Auto Insurance.

Over recent years, the search for Florida auto insurance has returned increasingly higher premiums because of excessive claims and billings filed under personal injury protection (PIP) coverage, according to Scott, who said that PIP-related crimes would have cost "Floridians over $1 billion this year" if reform measures in HB 119 were not approved.

PIP is a form of no-fault coverage that compensates for crash-related medical expenses regardless of who caused the accident. Reforms to HB 119 now require that full PIP compensation amounts of $10,000 only be reimbursed to patients with "emergency medical conditions" and institute other restrictions that eliminate previously popular medical services from payout eligibility.

"This legislation will benefit the pocketbooks of every Florida family who drives an automobile," Scott said at Friday's signing ceremony. "I am glad to do my part in keeping the cost of living low in Florida."

Source: http://www.flgov.com/2012/05/04/governor-scott-signs-auto-accident-reform-into-law/

Since its approval, however, inconsistencies in the law have raised questions as to when portions of it go into effect.

Part of HB 119 granting licenses to PIP-eligible medical providers under the new rules was meant to go into effect July 1, but another part finalizing a list of exempt providers was not written to go into effect until Jan. 1, 2013.

The Agency for Health Care Administration (AHCA), which issues those licenses in Florida, sought to clarify the discrepancy and said its own analysis of the legislation led agency officials to believe lawmakers meant to apply the 2013 effective date to the entire insurance reform law.

AHCA was the first state agency to publicly state its views on the issue, but some consumer groups still have questions about the gap that they fear may give insurers' cause to deny PIP-related payments to medical professionals who should be eligible.

The Florida Chiropractors Association (FCA) has called HB 119 "a flawed bill" and said the legislation is "extremely confusing and is difficult to interpret and understand," according to Paul Lambert, the FCA's general counsel.

FCA members who have asked about what they should expect on July 1 have been directed to "continue to file PIP claims following the usual course of business" and notify the group if an insurer denies their claim due to what the FCA calls "the glitch."

"[HB 119 is] replete with clashing effective dates and complexities that many say could lead to a flurry of litigation," FCA officials stated on the group's website.

The FCA has been in contact with the Florida State Massage Therapy Association (FSMTA) about such litigation, according to the FSMTA, which said that both are part of a "PIP coalition examining the constitutional issues that may be created by this complicated bill."

"A measured plan will result," the FSMTA said in a statement. "Lawsuits to different aspects of the bill may have to wait until portions of the bill take effect."

The law does more damage to those who need benefits than those who take advantage of them, according to the Florida Consumer Action Network (FCAN), which said in a statement that "cracking down on crooks is the answer, not taking benefits from consumers."

"PIP is sometimes the only insurance auto crash victims have," the group said. "That means it's the only money hospitals and doctors get paid, no matter how expensive the treatment, and it can be very expensive. PIP helps keep health care provider and hospital ledgers in balance."

Also, the Insurance Information Institute issued a white paper last week in conjunction with state officials that guides consumers through the changes brought by PIP reform.

For more on this and related issues, head to http://www.onlineautoinsurance.com/florida/ for access to an easy-to-use quote-comparison generator and informative resource pages.