Legislature's Compromise Could Keep PIP Insurance Alive

By Linda Kleindienst, South Florida Sun-Sentinel

Sep. 22--TALLAHASSEE -- Florida's no-fault auto insurance law may get a second chance at life, but with much tougher safeguards against fraud.

Although set to expire Oct. 1, legislative negotiators on Friday reached an agreement to extend -- likely by three months -- the current requirement that motorists carry a minimum of $10,000 in personal injury protection, or PIP.

Then, in January, the no-fault law would be revamped, for the first time imposing limits on the fees hospitals, doctors and clinics can charge for accident-related care and setting aside $2 million to prosecute fraud and provide better oversight by the Attorney General's Office.

If the full Legislature approves the measure, drivers could keep the insurance they have and would likely notice little difference if they get into an accident -- except for a clause that would eliminate any deductible a victim might have to pay before getting treated.

"What it means to the average guy on the street is the status quo ... but he'll also be assured he can walk into an emergency room and get appropriate medical care," said Rep. Ellyn Bogdanoff, R-Fort Lauderdale, the lead House negotiator.

Reached under pressure from Gov. Charlie Crist's office, the deal must still be ratified by the Florida Legislature. The state's lawmakers are set to begin a 10-day special budget-cutting session Oct. 3 but could be called into a quick session next week, when many will be in Tallahassee for committee meetings.

Bogdanoff and Senate Banking and Insurance Chairman Bill Posey, R-Rockledge, forged the compromise. They had been working to find common ground after failing to reach agreement on PIP's future during the spring legislative session.

Bogdanoff said the fast approaching Oct. 1 expiration date helped focus minds.

"Because we were a week away from sunset, crisis was created," Bogdanoff said.

Posey said if the Legislature approves the changes it will be benefit consumers.

"Rates will not continue to go up because of fraud or because PIP was abolished and replaced with more expensive insurance," he said.

But just because the lead negotiators have reached a deal, that doesn't necessarily mean the measure will pass the House and Senate, cautioned Senate Democratic Leader Steve Geller of Cooper City.

"It will be examined and vetted and then they'll see if there are at least 21 [Senate] votes for it. The details are frequently where the deal falls apart," Geller said.

In what has been called one of the largest special-interest food fights in Tallahassee annals, the battle over how to revamp PIP has raged for a year, pitting large insurance companies, small independent insurance companies and agents, trial attorneys, hospitals, doctors and medical clinics against one other.

The big insurance companies, led by State Farm, the state's biggest auto insurer, want to put an end to no-fault insurance. They claim the system is rife with fraud, which jacks up the rates. The deal reached by Bogdanoff and Posey was met with skepticism by Floridians for Lower Insurance Costs, a group that includes State Farm and AllState, the state's No. 2 auto insurer, which was upset the proposal does nothing to cap attorneys' fees.

"You have the House and Senate negotiator working behind the scenes to reach consensus. Many of the stakeholders haven't agreed to this deal that was largely arrived at in the dark," said Allison North Jones, a spokeswoman for the group.

Under no-fault, first adopted by the state in 1971, insurance companies must pay medical benefits for their policyholders, no matter who caused an accident -- and that has opened the door to staged car crashes, false crash reports, contrived injuries and fraudulent billing. If no-fault were allowed to expire, drivers determined to be at fault would be responsible for paying the medical expenses of everyone injured.

After determining that PIP fraud is rampant, a statewide grand jury in 2000 urged the Legislature to enact a series of reforms, all of which were adopted except for the recommendation that ceilings be fixed for the reimbursement of medical expenses.

"The Legislature never had the appetite ... even though every other type of health insurance known to man has a fee schedule," Posey said.

The Posey-Bogdanoff agreement would limit reimbursement for most doctor, clinic and chiropractor services (including doctor exams, splints and MRIs) to 200 percent of the fee allowed under Medicare. Hospitals and emergency room physicians would be restricted to 75 percent of the "usual and customary fee." The agreement puts no expiration date on no-fault.

Linda Kleindienst can be reached at [email protected] or 850-224-6214.

ONLINE What is your take on Florida's no-fault insurance law? Sound off in our poll at Sun-Sentinel.com/insurance

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