Monthly Archives: May 2012

Average Florida Plaintiff’s Attorney’s Fees for PIP Case: $60,000.00

In a May 30, 2012 segment, WFTV 9 addressed the recent changes to Florida’s PIP law. In the segment, WFTV reports that the average plaintiff’s attorney fee for a Florida PIP lawsuit is $60,000.00. WFTV reports that the abuses, like the case addressed where only $200 in PIP benefits was sought and almost $40,000.00 in attorney’s fees was recovered, is a major contributing cause to the increased insurance rates Floridians are experiencing.

In an interview with WFTV, Brooke Teplitz, a PIP Manager at State Farm, stated the following: “Our rates will keep going up, and Florida drivers will keep paying more and more because of the fraud and abuse in the system.”

The full story is available here.

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Filed under Fla. Stat. 627.736 (2008), Fla. Stat. 627.736 (2012), Insurance Fraud

PIP Fraud Brings 5.5 year Sentence to Oscar Luis Franco Padron

On Friday, May 25, 2012, Oscar Luis Franco Padro was sentenced to five and half years in prison for PIP fraud involving staged accidents.

Padro, who managed several clinics and recruited patients to perpetrate the fraud, was ordered to pay $4.35 million in restitution.  U.S. Attorney Wifredo A. Ferrer said,

This massive ring orchestrated phony automobile accidents and made a living by defrauding insurance companies of millions of dollars. … Not only were the insurance companies defrauded, but this scheme also hurt consumers as our insurance costs continue to soar because of fraud.

The press release from the State Attorney’s Office details how Padron and others perpetrated the fraud:

In their guilty pleas, the defendants admitted they and others would find individuals who owned automobiles and had car insurance from insurance companies that scheme participants preferred in order to participate in staged automobile accidents. In recorded conversations, the recruiters, used the term Spanish word perro (dog) for the person who causee the staged accident and a pejorative Spanish slang for women to describe the purported victims.

To execute the scheme, the recruiters sought drivers and their friends/family members to participate because, under Florida’s “No Fault” insurance law, insurers must provide PIP coverage of $10,000 per person.

Once the recruiters found the participants, they coached the participants on how to perform the staged accident, what to say to the police officer who responded to the scene and how to claim they were injured.

The accident participants were then directed by the recruiters to chiropractic clinics that were controlled by co-defendants. The staged accident participants were instructed to sign numerous blank treatment forms that would later be submitted indicating that they had visited the clinic on a number of occasions for treatment, although they may have visited the clinic only once or twice.

During their visits, some staged accident participants received no treatment at all, or may have received only a short exam or treatment, but paperwork indicated that a full and lengthy exam and treatment was given. Co-defendants Leon, Diaz, Bello, and Gonzalez are all licensed massage therapists who will lose their licenses.

Co-defendants Padron and Ross also admitted that, when converting the deposits of the mail fraud proceeds to cash, it was done in a way to avoid the $10,000 currency transaction reporting requirement. Two of the co-defendants would write a series of checks, typically for $9,000 each, made payable to different individuals, including Padron and Ross, that would be cashed on the same day, or made payable to the same individual that would be cashed on successive days, even though there were sufficient funds available in the account to allow for a single check to be cashed. Oftentimes co-defendants would go to the bank together to cash checks simultaneously, but each check would be written for less than the $10,000 currency transaction reporting amount.

The clinics involved in this scheme included Chiropractic Office of South Florida, located in Palm Springs, New York Medical and Rehab Center, located in Lake Clarke Shores and Healthcare ’R Us in Palm Springs.

The 15 individuals involved include:

Vladimir Lopez, Lazaro Vigoa Mauri, aka Lazaro Vigoa, Joaquin Ross, aka Joaquin Ross Vasquez or Quinito, Lisbet Leon, aka Lisbet Leon Machado,Aureliano Diaz, Carmen Venegas, Yida Bello, aka La Gorda, Gloria Patricia Cintron, aka Patty, and Veronica Riofrio, aka Vero, Ketty Gonzalez, Ernesto Miralles, Julio Fernandez Delgado, Alex Anoldo Flores, and Zachary Keith Stuhler.  Lopez and Vigoa Mauri are fugitives.

 

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Filed under Fla. Stat. 627.736 (2008), Insurance Fraud

Palm Beach County Court: PIP Demand Letter Requirements Must Be Strictly Adhered

On May 8, 2012, Palm Beach County Court Judge Sandra Bosso Pardo granted Final Judgment for State Farm in a claim for PIP benefits filed by Lake Worth Emergency Chiropractic Center, P.A.

Judge Bosso Pardo granted Defendant’s Motion for Final Summary Judgment, entering final judgment for the defendant, State Farm, upon finding that the pre-suit demand letter, required by Florida Statute 627.736(10) (2010), was insufficient in that it demanded payment for services that were never billed to State Farm.  Judge Bosso-Pardo found that the Plaintiff’s “withdrawing” the unbilled service after suit had commenced was insufficient to cure the defect and that the demand letter requirements under Florida Statute 627.736(10) must be strictly construed and adhered to by those seeking to initiate litigation against a Florida PIP insurer.

The full text of the Court’s ruling is available here.

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Filed under Case Law, Demand Letter, Fla. Stat. 627.736 (2008)

Florida Agency for Healthcare Administration (AHCA) Issues Memo on Potential Gap in PIP Licensing Requirement

On May 8, 2012, Florida’s Agency for Healthcare Administration (AHCA) issued a memorandum in an attempt to clarify the potential “gap” in the licensing requirements under Florida’s amended PIP law, Florida Statute 627.736.

The three page memorandum finds that entities that meet the exemption standards of Florida Statute 627.736(5)(h) do not need to obtain licenses to comply with the apparent licensing requirements under the July 1, 2012 amendment to the PIP statute.

Stuart Williams, General Counsel of AHCA, concludes in the memorandum:

Consonant with applicable rules of statutory construction, the Agency believes that the Act applies the same effective date of January 1, 2013 to both the new licensure requirement and the 5(h) exemption.

The full AHCA memorandum is available here.

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Filed under Fla. Stat. 627.736 (2012), Licensing

Miami Appellate Court Rules no Adjudication of Fraud Necessary to Plead Fraud in PIP Lawsuit

The Miami-Dade County 11th Circuit (sitting in its appellate capacity) overturned a County Court decision of Judge Ana Maria Pando, now ruling that an insurer was not required to obtain an adjudication of fraud prior to pleading as an affirmative defense fraud, under 627.736(5)(b)(1)(c).

Florida Statute 627.736(5)(b)(1) provides that:

An insurer or insured is not required to pay a claim or charges:

a. Made by a broker or by a person making a claim on behalf of a broker;
b. For any service or treatment that was not lawful at the time rendered;
c. To any person who knowingly submits a false or misleading statement relating to the claim or charges; …
In the PIP suit at issue, the medical provider argued that under Florida Statute 817.234 there are certain criteria set forth for what is considered a false or fraudulent insurance claim and in order to plead fraud the elements of 817.234 must be met. The Miami appellate court disagreed and ruled that even without an adjudication of fraud an insurer is authorized and allowed to plead fraud as an affirmative defense.
United v. East Coast Medical (Alberto Abdullah), FLWSUPP 1907ABDU

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Filed under Case Law, Insurance Fraud

American Insurance Association (AIA) Applauds Scott’s Signing Florida’s New PIP Law

The American Insurance Association (AIA) applauded Governor Rick Scott’s signing Florida’s new PiP law Friday. In a statement from Ray Farmer, AIA southeast region vice president, about Scott’s signing HB 119, Farmer said:

“Governor Rick Scott, CFO Jeff Atwater, Insurance Commissioner Kevin McCarty and the Florida Legislature are to be praised for their steadfast commitment to achieving passage of significant PIP reform legislation this session. Curbing more than $1 billion in annual insurance fraud in Florida has been a top priority for the American Insurance Association. We are pleased that policymakers addressed this crucial issue and accomplished this important milestone for Florida motorists.”

The full AIA press release is available here.

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Filed under Fla. Stat. 627.736 (2012)

Florida Office of Insurance Regulation Issues Informational Memorandum On New PIP Statute “Fee Schedules”

On the same day Florida’s new PIP statute was signed by Governor Rick Scott, Florida’s Office of Insurance Regulation (OIR), and Insurance Commissioner Kevin M. McCarty, released  Informational Memorandum OIR-12-02M to address the statutory “fee schedule” provision in the new PIP statute.

The Memorandum itself explains:

The purpose of this memorandum is to assist insurers with the filings necessary to implement the notice requirement in Section 627.736(5)(a)5., Florida Statutes, resulting from the passage of House Bill 119. Among the various provisions of this legislation is a new statutory requirement that insurers provide a notice of the schedule of medical charges or “fee schedule” to insureds if the insurer is limiting reimbursement. The Office of Insurance Regulation (Office) has analyzed the revisions and is sending the attached sample endorsement language for inclusion of the schedule of charges specified in Section 627.736(5)(a), Florida Statutes.

The OIR did explain that insurers are not required to used the proposed language that the OIR provided and will expedite the review of the proposed policy endorsements in attempt to obtain approval prior to the July 1, 2012 effective date.

The OIR similarly addressed the two effective dates in the amended PIP law:

It should be noted that the fee schedule in the sample language is the fee schedule that is effective at the time that the notice requirement is established in Florida Statutes (July 1, 2012). It does not include the revisions in House Bill 119 to the fee schedule that become effective on January 1, 2013.

The full press release, including the sample language, is available here.

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Filed under Fla. Stat. 627.736 (2012), The Statutory "Fee Schedules"