Hospitals Support Extension of PIP Law: Florida's Hospitals Hope to Keep a Controversial Personal Injury Law Alive Past Its October Expiration Date, Saying They Can't Afford the Hit on Their Bottom

By Jim Wyss, The Miami Herald

Mar. 14--With the no-fault personal injury protection law, or PIP, due to die Oct. 1, the Florida Health Association converged on Tallahassee Tuesday to try to put the controversial auto insurance measure on life support for another three years.

The FHA, which represents hospitals and doctors, said it was throwing its support behind Senate Bill 1450, which extends the measure through 2010. Allowing it to die would create a $350 million shortfall at a time when hospitals are too ill to handle it, the FHA said.

Created in 1971, PIP requires auto insurers to cover up to $10,000 of driver medical expenses -- regardless of who's at fault in an accident.

But the auto insurance industry says PIP's loose guidelines have spawned a cottage industry of staged accidents and rampant overbilling that boost medical costs and insurance premiums.

Those were some of the reasons why legislators decided to allow the measure to expire, or sunset, this October.

But FHA said state hospitals are already stretched thin by federal cutbacks and spent more than $2 billion last year on uninsured patients. Allowing PIP to die now would only add to their problems, the FHA said.

"We are asking the Legislature to do no harm to Florida's hospitals and reenact PIP," said FHA President Wayne NeSmith.

But PIP is already harming consumers' pockets, said Floridians for Lower Insurance Costs, a group backed by the auto insurance industry. According to their estimates, PIP adds an average of $250 annually to Florida drivers' premiums, which are the sixth most expensive in the nation.

RESENTMENT

Ross Johnson, a financial advisor from St. Petersburg, said he already pays for health insurance and resents the additional $227 that PIP adds to his auto premium every six months.

"I could be spending that money on my daughter's college or making house payments," he said. "We can't afford this system that is broken."

Sen. Burt Saunders, a Democrat from Naples who is sponsoring the PIP extension bill, admitted the measure isn't perfect, but he said doing away with it before finding a fix was unacceptable.

"Hospitals simply cannot absorb the additional cost," he said. "And we can't pass it on to our business community."

COST CONTROVERSY

Floridians for Lower Insurance Costs said hospital concerns are overblown since almost 80 percent of claims covered by PIP would be covered by other forms of auto and health insurance.

This isn't the only PIP proposal floating around the Capitol.

Sen. J.D. Alexander, a Republican from Lake Wales, is sponsoring a bill that would replace PIP with mandatory medical payments coverage.

Senate Bill 2626 would require up to $25,000 per person or up to $50,000 per accident to cover injuries to drivers or accident victims.

It includes some of the controls that insurers say are lacking in the current law, but members of the auto insurance lobby said it was no solution.

"We need to be wary of proposed reforms," said Liz Reynolds, the state affairs manager of the National Association of Mutual Insurance Companies, which has 125 members in Florida. "We need to make a clear break and allow this sunset to occur."

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Copyright (c) 2007, The Miami Herald

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