FJA seeks PIP Reforms that Protect Victims

One of the highest profile issues to be addressed next year by the Florida Legislature is resolving the challenges facing the current personal injury protection (PIP) system. Allegations of fraud in select areas of the state have dominated the debate regarding high auto insurance rates. But while supporting efforts to tackle PIP fraud, the Florida Justice Association, through the leadership of FJA Auto Committee Chairman Todd Copeland, is taking a leading role in ensuring that any future PIP reforms also protect the rights of injured drivers.

Recent news has publicized a limited number of fraud cases involving PIP insurance, ranging from billing for services not performed to staged accidents where injuries were fabricated. The state’s Insurance Consumer Advocate, Robin Westcott, has assembled a working group of stakeholders to address the issue, including Todd Copeland of the FJA. And while the majority of working group members is aligned with the insurance industry, Todd has been a strong advocate for the rights of those injured in auto accidents.

The Florida Justice Association has taken a strong position on the issue of PIP. Our association agrees that state regulators need to root out those wrongdoers who use the PIP system to perpetuate fraud against Florida’s insurers. The FJA, however, equally stresses that any effort by the Legislature must not be at the expense of those legitimately injured in auto accidents. We see two options moving forward: one, the Legislature can reform the PIP system by narrowly targeting fraud or two, eliminate the no-fault system in favor of requiring mandatory bodily injury liability insurance for all Florida drivers.

Reforming a Broken PIP System

The root of the problem with PIP is that the no-fault system creates an environment with less oversight, thereby creating opportunities for fraud by potential bad actors. The reasoning is evident – with no assignment of blame surrounding an accident, fewer eyes are evaluating the circumstances surrounding an accident hence making it more difficult to catch perpetrators of fraud. The Florida Justice Association supports specific reforms aiming entirely at the issue of preventing fraud in the PIP system.

The FJA supports a more extensive use of the long form accident report used by police responding to accidents. By requiring the long form, more details will be recorded at the scene of the accident, making it easier for regulators to monitor which medical services later billed through PIP are in fact necessary.

Another easy fix to the PIP system is closing the loophole in the clinic licensure statute. Currently, non-physician health care providers, such as massage therapists and physical therapists, can set up a PIP clinic without undergoing the state oversight required for non-physician-owned clinics. Closing this loophole levels the regulatory playing field and subjects all PIP clinics to the same degree of state oversight.

The Legislature can also provide whistleblower protections for health care providers who report fraudulent activities to state regulators. Civil immunity from defamation claims by doctors who report fraud will eliminate a disincentive to reporting fraudulent activity by medical care providers, other persons or business entities or PIP insurers. Additionally, health care providers could be granted legal protections for reporting kickback schemes in the PIP system.

These recommendations are a small sample of PIP reforms advocated by the Florida Justice Association which will root out fraud in the system while protecting the legal rights of those truly injured in automobile accidents.

Move to Financial Responsibility System

Another proposal gaining traction in Tallahassee is the move to replace PIP with a fault system, requiring drivers to carry bodily injury liability insurance. Such a shift from PIP to a driver financial responsibility requirement would create an improved system with more oversight, lessening the chance of insurance fraud.

In Florida, drivers are required to carry liability protection to cover property damage as well as PIP to cover themselves and their passengers’ injuries, regardless of fault. Amazingly, Florida is one of only two states that do not require drivers to carry bodily injury liability insurance. There is talk in Florida to abandon PIP and adopt mandatory bodily injury liability insurance, and the FJA is actively engaged in this discussion.

The current system possesses a number of inherent inefficiencies that lead to higher rates for Florida’s drivers. Florida taxpayers pick up millions of dollars through higher taxes for the cost-shifting of treating auto accident victims due to at-fault negligent drivers who don’t carry bodily injury liability insurance. Florida’s trauma centers also sacrifice sparse funds providing uncompensated care to accident victims instead of providing needed care to indigent patients. And the lack of bodily injury liability insurance also leads to higher insurance rates for other drivers since they pay 31% more for Uninsured/Underinsured Motorist (UM) insurance.

The FJA supports the idea of coupling mandatory bodily injury liability insurance with a form of Med Pay coverage to ensure that health care providers can promptly receive payments while issues of fault are resolved. This still maintains a fault system aimed at limiting cases of fraud while ensuring that doctors are paid.

The Florida Justice Association recognizes that the current PIP system is unsustainable and needs real reform. We do, however, strongly believe that such reforms should not throw the baby out with the bathwater. The Legislature must narrowly focus PIP reforms on fraud only without restricting the access to courts for those truly injured in auto accidents. If the Legislature decides that the PIP system is beyond repair, the FJA supports considering a move to a fault system where drivers will be responsible for the harm they cause by carrying bodily injury liability insurance.