Category Archives: Fla. Stat. 627.736 (2008)

Chiropractor & Receptionist Connected to Operation Sledgehammer Get Prison Sentences

Convicted for their role in a massive insurance fraud ring involving staged accidents in South Florida, two more people were sentenced in Operation Sledgehammer last week.

Chiropractor Lawrence Schechtman from Parkland, whom we reported about on our FL-PIP Guide on December 19 when he pleaded guilty to mail fraud conspiracy and mail fraud, was sentenced to four years and four months in federal prison. In addition to his sentence, he was ordered by U.S. District Judge Kenneth Marra to pay more than $2.4 million in restitution.

According to federal prosecutors, Schechtman worked at clinics in Palm Springs and Miami, where he signed off on treatments for people who fraudulently claimed they were accident victims as part of the staged-accident ring which operated in several counties.

According to a story in the August 8 Sun-Sentinel, the 45-year old Schechtman, who suffers from heart and back problems, was granted a request to serve his confinement at the Federal Medical Center, a medical prison in North Carolina. Judge Marra gave the chiropractor two months to turn himself in and begin serving his term.

Another co-conspirator from Palm Springs was sentenced for her role in Operation Sledgehammer. Sircy Sacerio, also known as Sisi or Sircy Santos, received four years in federal prison by Judge Marra.

Under the terms of her sentence, the Palm Beach Post reported, the 31-year old reception and office assistant must also repay $1,146,824.26 and will have two years of supervised release following her time in prison.

She originally pleaded guilty to one count of conspiracy to commit mail fraud and five counts of mail fraud.

Part of the fraud activity in Operation Sledgehammer, which was recorded by investigators, included co-conspirators damaging vehicles with sledgehammers to give the appearance of a crash. The participants in the staged accidents would then go to clinics involved in the ring to receive bogus treatment which, according to the U.S. Attorney’s Office, brought in millions of dollar to chiropractors on false and fraudulent insurance claims. The scheme began around October 2006 and continued through December 2012.

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

Texting Laws Appear to Reduce Traffic Fatalities

States with primary enforcement laws against texting while driving appear to be having an impact on reducing traffic deaths, a new study released by the University of Alabama at Birmingham (UAB) – School of Public Health has found.

Primary enforcement means that there doesn’t have to be another reason for a police officer to stop a vehicle.

A recent Claims Journal article summarized some of the UAB findings, one of the most notable being a three percent decrease in fatalities among all age groups associated with states supporting primary texting bans. This translates to an average of 19 deaths prevented per year in states with such bans.

However, researchers revealed that states with secondary enforcement of texting bans (an officer must have another reason to stop a vehicle) didn’t see any real decrease in fatalities. Researchers also found bans on texting are most effective with young drivers, while bans on handheld cell phones are most effective with older adult drivers.

According to 2011 data from the Centers for Disease Control and Prevention, 31 percent of U.S. drivers, aged 18-64 years, said that they had read or sent text or email messages while driving at least once in the 30 days prior. That year saw 3,331 fatalities and 387,000 injuries involving distracted drivers.

Using roadway fatality data captured in the Fatality Analysis Reporting System between 2000 and 2010, Alva O. Ferdinand, Dr.P.H., J.D., led the longitudinal panel study. She wanted to examine what impact texting laws have had on roadway crash-related fatalities and how variations in states’ laws affect those results to ultimately determine which laws are most beneficial in improving roadway safety.

Researchers’ results indicated that states with primary texting bans:

  • Were “significantly associated” with reduced traffic fatalities in all age groups
  • In all age groups, a 3 percent reduction in traffic deaths equates to 19 deaths prevented each year
  • Reduced fatalities 11 percent among 15- to 21-year olds when targeted to young drivers.

States with secondary enforced restrictions also saw no significant reduction in traffic fatalities. In addition, states that prohibit use of cell phones without hands-free technology saw significant reductions in fatalities among the 21- to 64-year old age group.

Ferdinand hopes the findings help policymakers implement laws that are most effective in reducing traffic deaths. Her results are published in the August issue of the American Journal of Public Health.

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Filed under Fla. Stat. 627.736 (2008)

State Farm Granted Summary Judgment in Lake Worth Chiropractic PIP Benefits Case

On July 14, 2014, the 15th Judicial Circuit for Palm Beach County affirmed a lower court decision granting summary judgment to State Farm in a claim for PIP benefits brought by Lake Worth Emergency Chiropractic Center.

In the underlying case, 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 Circuit Court affirmed this decision, concluding that section 627.736(10) requires strict compliance and that, in this case, the demand letter did not strictly comply with the PIP statute requirements. As such, Lake Worth Emergency Chiropractic Center failed to satisfy the condition precedent to filing its law suit, and the trial court was correct in awarding final summary judgment in favor of State Farm.

The case is Lake Worth Emergency Chiropractic Center v. State Farm, in the Fifteenth Judicial Court for Palm Beach County, Case No. 502012AP000034XXXXMB. Click on the link to read the court opinion.

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

Vehicular Arson Cases Climbing Nationwide

The slow economy could be contributing to an increase in claims involving auto fires, according to an official with the Washington, D.C.-based Coalition Against Insurance Fraud.

“Common sense tells you that more desperate people will take more desperate measures to get themselves out of trouble,” said Coalition representative James Quiggle in a News 4 I-Team report.

Cracking the case on vehicular arson is difficult to prove in court, as Maryland officials are discovering. Of more than 2,000 suspected auto arsons in the state during 2013, fewer than 50 cases had sufficient evidence to turn the matter over to prosecutors.

Findings from a 2009 report of the U.S. Fire Administration’s (USFA’s) National Fire Incident Reporting System (NFIRS) reveal the following:

  • Approximately 10 percent of all vehicle fires are intentionally set.
  • Intentional vehicle fires are at their highest during the summer, with a July peak.
  • Matches are the leading heat source (20 percent) of intentionally set vehicle fires.
  • Vehicle seats (34 percent) and uncontained fuel (14 percent) represent the starting point of many intentionally set vehicle fires.

Arson generally has a low clearance rate, according to crime reports from the U.S. Department of Justice. Arson involving motor vehicles, which represent 20 percent of all arson cases, have a particularly low closure rate of approximately 7.4 percent nationwide.

The Florida Department of Law Enforcement statistics indicate that motor vehicle arson may not be a major concern in the state, with fewer than 300 cases of auto arson reported for 2012.

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

More Than Half of Florida PIP Claimants Hire an Attorney

PIP claimants are increasingly being represented by legal counsel, according to a new study released by the Insurance Research Council (“IRC”) titled Attorney Involvement in Auto Injury Claims.

In 2012, the study notes that 36 percent of auto injury PIP claimants nationwide were represented by attorneys, compared to 31 percent in 2007. For bodily injury claims, representation rose slightly to 50 percent.

Compared to claimants without legal representation, PIP claimants with attorneys were found to have a greater likelihood of the following behavior:

  • Sought more treatment in a pain clinic, including MRIs
  • Experienced longer waiting times for claim payments
  • Collected lower net payments
  • Involved in alleged fraudulent claims

Historical trends from 1977 to the present are outlined in the IRC chart below.

Attorney_Involvement_Fig 1_cr

Attorney involvement was also measured by state. Florida ranked at the top of the list, with more than 50% of claimants represented. Kansas, where 12% of PIP claimants are represented, was the lowest ranking state.

Data is drawn from 12 participating insurers and 35,000 auto injury claims closed with payment under the five principal passenger coverage areas, according to survey sponsors.

Click on the link to read more about the Attorney Involvement in Auto Injury Claims study.

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Filed under Fla. Stat. 627.736 (2008)

Another Staged Accident Story Reminds Drivers to be Alert to Florida Auto Insurance Scams

Florida State Rep. Jim Boyd, R-Bradenton, helped pass legislation in 2012 aimed at reducing the tremendous number of staged accidents and injuries in the state, and deter claims made after accidents in which victims had not even been present.

Once estimated as a billion-dollar industry in Florida due to the ease of receiving PIP payouts from insurance companies, Boyd’s changes helped strengthen requirements for medical evidence and stipulated that police reports list everyone involved, including all of the passengers.

Credited with reducing personal injury insurance costs and premiums, Boyd feels that the updated law put a dent in a serious problem where opportunistic scam artists still turn dents and dings into major injuries.

One such example of heavy-duty suspicions stemming from a marginal accident was featured in a recent Tom Lyons’ column in the Herald-Tribune.

In Lyons’ piece, a Sarasota retiree was supposedly involved in an accident when backing out of an on-street parking spot. This driver felt the accident was so small that he wasn’t even sure it happened. However, the driver of the other car claimed that he caused the collision and filed a police report. The retiree was issued a ticket.

He later found out from his insurance company that the woman driving the other car filed an insurance report claiming she and her passenger suffered trauma and were feeling pain in their neck, legs and back. The retiree says, “his insurance company is about to take a hit, but he’s not at all sure it is a legitimate one.”

Some unscrupulous staged accident rings rely on each other to carry out these scenarios to receive insurance reimbursement, according to the article. Although some parties face charges in the end, it isn’t easy to know when someone is faking an injury. It is even harder, as demonstrated in the retiree’s case, to prove the circumstances surrounding the injury are bogus.

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

4th District Court of Appeal Denies Rehearing in PIP Benefit Dispute

The Fourth District Court of Appeal has denied motions for rehearing by appellants in a PIP case decided in the insurer’s favor. The case was the consolidation of two separate PIP cases.

Insureds in both cases sought treatment for injuries sustained in separate accidents and assigned their PIP benefits to their treatment providers. One of the insurers, State Farm, reduced the amount paid to Northwood Sports Medicine, and Northwoods subsequently sued. Prior to that filing, the insured’s PIP benefits were exhausted. State Farm moved for summary judgment; Northwoods amended its complaint to allege that State Farm reduced payments in bad faith. The trial court granted the motion for summary judgment on the sole ground of exhaustion of benefits.

Likewise, in the second case, the insured assigned his benefits to Wellness Associates of Florida. USAA Insurance Co. reduced the payments to Wellness, and Wellness filed a complaint for damages. At the time the suit was filed, less than $14 in unpaid PIP benefits remained and, while the lawsuit was pending, PIP benefits were exhausted. USAA moved for summary judgment, Wellness amended its complaint to allege bad faith, and the trial court entered summary judgment based upon exhaustion of benefits.

For jurisdictional reasons, the appellate court transferred the Northwoods case to the circuit court. The question that the appellate court answered in the affirmative in the Wellness case is whether post-suit exhaustion of benefits absolves the insurer from responsibility to pay an otherwise valid claim where the exhaustion occurred after the insurer: (1) paid an amount that the provider claims is less than required by the contract; (2) received a pre-suit demand letter notifying the insurer of the medical provider’s dispute; and (3) was served with the filed complaint.

In its rationale, the court extended its decision in Simon v. Progressive, rejecting the “reserve or hold” theory by which an insurer is to put money in reserve if it denies or reduces a claim until that claim is resolved. The court concluded that “where the reasonableness of the provider’s claim is in dispute, post-suit exhaustion of benefits extinguishes the provider’s right to further payments, as long as exhaustion is prior to the establishment of the amount to which the medical provider is entitled to under PIP.” The court concluded that post-suit exhaustion of benefits—as was the case in Wellness—should be treated no differently than pre-suit exhaustion of benefits, as long as the amount of PIP benefits to which the provider is entitled has not been established. The court therefore affirmed the final judgment of the trial court in Wellness.

The case in the District Court of Appeal of The State of Florida Fourth District, January Term 2014, is Northwoods Sports Medicine and Physical Rehabilitation, Inc., (A/A/O Suzanne Cabrera), and Wellness Associates of Florida, Inc., (A/A/O Daniel North), Appellants, v. State Farm Mutual Automobile Insurance Company and USAA Casualty Insurance Company, Appellees, Nos. 4d11-1556 and 4d11-3796, [March 5, 2014]. Click on the link to read the June 4, 2014 ruling in the case.

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