Hospitals Fear Loss of PIP: Hospitals, Doctors and Many Floridians Without Health Insurance Could Be Big Losers If the State's Controversial No-Fault Auto Insurance Law is Allowed

By Beatrice E. Garcia, The Miami Herald

Jun. 7--With nearly 21 percent of Floridians under age 65 lacking health insurance, hospitals and doctors fear they would be stuck with millions of dollars in unpaid bills from accident victims if Florida's no-fault auto insurance law expires.

The Florida Hospital Association estimates they now collect $350 million in reimbursements from personal injury protection, or PIP, claims each year. With an estimated 40 percent of accident victims lacking any other insurance, hospitals would take a $140 million annual hit.

The healthcare industry has a major stake in the debate over Florida's controversial no-fault law. They've hired powerful lobbyists, met with lawmakers and trekked to Tallahassee to make their case that PIP should not expire Oct. 1.

In the battle to reform or eliminate Florida's no-fault auto insurance law, auto insurers say consumers who have other health insurance will save money, because they won't have to buy PIP. They contend drivers will be able to buy other forms of insurance to pay the medical bills PIP now covers. They also argue that providers overbill, inflating PIP costs, and that the system is rife with fraud by unscrupulous healthcare providers.

But hospitals and doctors worry about the 40 percent of accident victims they treat who have no other insurance coverage.

At Baptist Health Systems, which includes four major hospitals in South Miami-Dade County and several outpatient centers, PIP reimbursements totaled $39.5 million in 2006. The hospital system said 43 percent of the patients treated had no other medical insurance.

At the North Broward Hospital District, the amount is an estimated $11 million.

Such a loss, said District CEO Alan Levine, at a time when it's already losing some $7 million in Medicare reimbursements, "will have a huge impact on us."

Taxpayer-funded hospitals such as Miami's Jackson Memorial Hospital and the North and South Broward hospital districts argue the cost of underfunded care is essentially shifted to taxpayers since they would require more state and county assistance to operate.

"It's a cost shift from auto insurers to health insurers, and eventually the individual citizens," says Ralph Glatfelter, lobbyist for the Florida Hospital Association. "Hospitals are at the greatest disadvantage because they have to continue treating auto accident victims."

Last month, representatives from Baptist, Jackson Memorial Hospital, Mt. Sinai Hospital and Mercy Hospital met with House Speaker Marco Rubio to make him aware of the financial impact on hospitals and the state's trauma centers if PIP coverage is eliminated.

Margate orthopedic surgeon Dr. Stephen Greenberg says he and other specialists will be increasingly unwilling to cover emergency room calls if there's a greater chance they won't get paid, especially since many of these patients would require follow-up care in their private practices.

Some hospitals already pay specialists' fees for emergency room calls to ensure doctors will be available.

COVERAGE NEEDED?

Several major auto insurers say the $10,000 in required PIP coverage isn't really needed, and that Florida drivers ultimately would win if they no longer had to buy it -- especially those who already buy health insurance through work or individually.

State Farm Auto Insurance, one of the strongest proponents of scrapping the no-fault law, claims its policyholders could save between $200 and $300 a year in auto insurance costs if they don't have to buy PIP.

Justin Glover said one of the biggest problems with PIP is that the $10,000 of required medical coverage doesn't go very far, because of overbilling by doctors and hospitals.

In the absence of PIP, State Farm says, drivers can buy medical payments coverage, which pays medical bills for the driver and passengers in an accident. Because the insurer decides what the policy covers, not the state, State Farm has more leeway to negotiate with doctors what treatments to cover and how much it pays, says Russ Kile, the company's PIP auto claims manager.

An actuarial firm hired by State Farm, after analyzing the estimated $1.5 billion that auto insurers paid out in PIP medical claims in 2006, found that about 80 percent of the losses could be covered by several options most auto insurers would sell after the no-fault law expires:

* Medical payments;

* Bodily injury, which pays medical bills for the victims of an at-fault driver;

* Uninsured motorist, which pays the bills for drivers involved in an accident with an uninsured driver.

As part of its analysis, the actuaries estimated the same drivers who now buy bodily injury and uninsured motorists would still purchase them once the no-fault law expires. It assumed that about 75 percent of drivers would buy medical payments coverage, based on the nationwide database kept by the National Association of Insurance Commissioners for states without no-fault.

Gov. Charlie Crist has said he's not eager to see the no-fault law disappear without another form of required insurance in its place.

Julio Robaina, a Miami representative, doesn't want to see the no-fault system end, but strongly believes fraud needs to be eliminated.

NO-FAULT FRAUD

Robaina and others who have studied the no-fault system say the biggest area of fraud stems from clinics that aren't owned by doctors. Some, with the help of drivers who stage accidents, will charge for unnecessary medical care, to collect as much of the PIP benefits as possible.

Robaina wants to propose a bill -- if no-fault is taken up in the special session that begins Tuesday -- that would limit clinic ownership to licensed doctors.

The problem of unfunded medical care involving auto accident victims goes beyond the hospitals.

Doctors, who say they're already squeezed by health insurers to accept lower payments for their services, fear they could end up with accident victims with no means to pay their medical bills.

"Given already low reimbursement rates many doctors don't want to cover emergency rooms," said Dr. Larry Grofine, an anesthesiologist and vice president of the Palm Beach County Medical Society.

And because there's already shortage of doctors who cover emergency rooms, "those who do are left so exhausted they can barely see their own patients," Grofine said.

Grofine admits many doctors don't discount their rates when they bill accident victims because often they don't get paid until claims are settled.

Bill Newton, director of the Florida Consumer Action Network, says no-fault provides other benefits, such as lost wages and $5,000 in funeral costs, which would be lost if the law expires.

And, PIP covers up to 60 percent of income lost for missed work due to an accident.

Insurers say drivers can always buy disability coverage after the no-fault law expires.

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