Florida will likely keep PIP for at least the next 18 months. Here is what to do.

Florida will likely keep PIP for at least the next 18 because Ron DeSantis vetoed the bill that would have repealed PIP.

This means that the house and senate would need to override his veto for this bill to go in effect. Because the Florida legislature is out of session, and is unlikely to have a special session because of this particular veto, the legislature cannot address PIP concerns until next winter, and unlikely will they make any law that does not give insurance companies time to prepare. So, I believe the earliest we could see any type of change to auto insurance law is December 31, 2022.

This means that FL PIP, in its current form, will be in effect for at least the next 18 months.

What should you do?

Contact Your Legislative Representatives

If you are a citizen of Florida, I urge you you to contact your legislative representatives and demand attorney fee reforms with regards to PIP. Explain to the representatives that the biggest problem with auto insurance is that a claimant can assign benefits to a third party (such as a medical clinic) and that this clinic can sue an insurance company and collect one-way attorney fees. For example, Person A is in a car crash. Person A can go to Medical Clinic B. Person A signs a form allowing assignment of benefits to Medical Clinic B. Medical Clinic B then assigns the case to Lawyer C. Lawyer C takes all PIP claims from Clinic B and files individual lawsuits on EACH claim. It costs the lawyer very little to do this; he/she just uses a template for each claim, only changing a few details for each lawsuits. However, if Lawyer C wins any of the claims, he/she can claim attorney fees for the claim. If your legislative representatives want to understand further, point out to them that the PIP statute itself contemplates assignment of benefits, as seen at Florida section 627.736 (10)-b-1, and that once assigned, if the lawyer (suing on behalf of the medical clinic) wins, he/she receives fees per 627.428, but if the insurer wins, it receives nothing and still bears the cost of defense.

Explain that the easiest way to bring premiums down for auto insurance is for 627.428 to be amended to say “this section does not apply to attorney fees where the attorney represents a third party who received the claim via an assignment of benefits.” Not only would this lower auto premiums but, such a statute would dramatically improve the homeowners situation as well. However, if they want to limit it just to automobile claims they could pass “this section does not apply to claims brought under PIP coverage when benefits have been assigned to third party vendors, such as medical clinics, supplying services to the claimant.”

Explain to your representative that Florida had 400k of these type of lawsuits in 2020 and will likely have more than 500k in 2021.

If You Work for an Insurance Carrier, Consider These Steps

a) Review your incoming claims for patterns of abusive lawsuit behavior. We have a free tool available for this. It can rate an incoming claim for this very behavior based on the NPI of the PIP bill. We will gladly give you a username for free, and there is no expiration date or hidden fees. Determine if there are clinics that are abusing the process to make an unusual number of claims against your carrier, and whether these clinics using the threat of lawsuits to coerce you into paying questionable claims.

b) For clinics who appear to be abusing the process, consider other information you have about the incoming claim and evaluate whether 627.736 (6)-g applies. This statute says:

An insured seeking benefits under ss. 627.730–627.7405, including an omnibus insured, must comply with the terms of the policy, which include, but are not limited to, submitting to an examination under oath. The scope of questioning during the examination under oath is limited to relevant information or information that could reasonably be expected to lead to relevant information. Compliance with this paragraph is a condition precedent to receiving benefits. An insurer that, as a general business practice as determined by the office, requests an examination under oath of an insured or an omnibus insured without a reasonable basis is subject to s. 626.9541.

Based on the fact pattern of the individual claim, coupled with the activity of the clinic, it may be prudent for you to withhold payments until you are able to have an examination under oath with the claimant. I have found that in some cases, the claimant will actually disavow the billed medical services saying that he/she was unaware that the clinic billed for all of that activity. This allows you to withhold payments and also helps you build a criminal case against the clinic.

We have an affordable commercial tool, for which we offer free usage for evaluation (this is a beefed up version of the free tool discussed above) which can help you determine if a claim is a good candidate for an examination under oath. I have seen excellent results from this process.

Closing Thoughts

FL PIP is currently rewarding trial lawyers and fraudsters. I understand why the legislature wanted to get rid of PIP. I also understand and agree with the governor’s assessment that the new bill would have been worse than the current law. For Florida’s rates to drop, either 1) the law needs to stop rewarding lawyers via one-way attorney fees and/or 2) insurance carriers need to improve their methods for preventing fraudulent payments.

Unless carriers are actually willing to withhold payments while they conduct examinations under oath, rates will not come down; for every fraudulent clinic owner that is put in jail, another one appears and fraudulent claims continue to be paid.