In a late night finale to a pitched, down-to-the-wire battle between Florida’s House and Senate, the Florida Senate passed an amended PIP reform bill (HB 119) on a narrow 22-17 vote.  The vote came after some heavy lobbying by Governor Rick Scott and others.  With the vote, Governor Scott accomplished a top legislative priority, to reform Florida’s mandatory motor vehicle no-fault law and crack down on the fraud abuses in PIP cases that have led to skyrocketing costs for coverage.

Governor Scott has called Florida PIP a billion dollar fraud tax on Florida drivers.  According to the Governor’s office and industry experts, PIP costs have risen by $1.4 billion since 2008, largely because of fraud imbedded in the system.  Florida ranks first nationally in staged accidents with Miami and Tampa leading the way.

The new legislation now requires the reimbursement of medical benefits if the insured obtains initial services and care within 14 days after a motor vehicle accident, from a licensed physician, osteopathic physician, chiropractic physician, dentist, or provided in a hospital or in a facility which owns or is owned by a hospital or by a person or entity licensed to provide emergency transportation and treatment.  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.  Further, the bill clarified that death benefits are limited to $5,000, not $10,000, but may supplement medical and disability benefits.

Follow-up services require a referral from a physician, osteopath, chiropractor or dentist.  Massage therapy and acupuncture are no longer considered a reimbursable benefit under PIP.  PIP insurers must also maintain a log of benefits paid under PIP on behalf of the insured, to be provided to the insured if litigation is commenced. The bill also did away with contingency fee multipliers for a claimant’s attorneys fees but did not place caps on attorneys fees.  Any attorneys fees recovered must comply with prevailing professional standards, not overstate or inflate the number of hours reasonably necessary for a case of comparable skill or complexity, and represent legal services that are reasonable and necessary to achieve the result obtained.  A party may request that a judge require counsel to substantiate the award of attorneys fees under these three criteria.

The final bill was a combination of the initial preferred House and Senate versions.  The Senate wanted a guaranteed 25 percent rate reduction on PIP, but settled for a 10 percent reduction.  If PIP insurers do not provide their policyholders a minimum 10 percent base rate reduction, they must explain in detail why they have not. A PIP insurer must make a second rate filing by January 1, 2014, to achieve a cumulative 25 percent base rate reduction for policyholders unless the insurer shows why it is unable to provide the cut.  The bill suspends an insurer’s ability write new PIP coverage in Florida if the insurer fails to make either required filing or showing.  The newly enacted reforms are effective July 1, 2012.  The Office of Insurance Regulation must publish the results of a comprehensive PIP data call by January 1, 2015.

A summary of the Amended HB 119 is here.