Tampa Bay Fox 13 recently featured a segment regarding the effect of House Bill 119, the 2012 PIP law change, on PIP premium rates. Lynne McChristian of the Insurance Information Institute, shed some light what appears to be a lack of a premium decrease. McChristian indicates that the recent insurer reports are not indicative of what could likely be the case after January 1, 2013, when all of HB119′s changes take effect.
Category Archives: The Statutory “Fee Schedules”
Insurance Information Institute Comments on PIP Premium Changes and Significance of the January 1, 2013 Effective Date of 2012 PIP Law Changes
The summer 2012 of the Trial Advocate Quarterly features an article by attorney and FLPIPGuide.com contributor Mark J. Rose on the recent changes to Florida’s PIP/No-Fault Law including: statutory fee schedules, the “emergency medical condition” limitation, PIP payment logs, exhaustion of benefits, explanations of benefits, examinations under oat (EUO), independent medical examinations, and fraudulent PIP claims.
The article will soon be available on the Florida Defense Lawyer Association (FDLA) website at http://www.FDLA.org. Requests for full copies of the article or for more information on the recent Florida PIP law changes, please contact Mark Rose (email@example.com) or Michael Rosenberg (firstname.lastname@example.org).
On Tuesday the Florida Office of Insurance Regulation (OIR) signed a $150,000 contract with the independent firm Pinnacle Actuarial Resources, to evaluate the impact of the recent changes to Florida’s PIP law. The review, headed by former Insurance Services Office (ISO) employee LeRoy Boison, was commissioned as a part of the recent PIP law changes which permitted the OIR to spend up to $200,000 on the study. Pinnacle was selected out of 37 vendors, three of which including Milliman, Melinos, and Pinnacle submitted proposals. The findings from Pinnacle are due no later than September 15, 2012.
The full article from Florida Health News is available here.
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.
Yesterday the 3rd District Court of Appeal rendered its decision Geico v. Virtual Imaging (a/a/o Maria Tirado). While the Court ruled it was bound by its prior decision denying the use of the Fee Schedule as found in Florida Statute 627.736, the Court also certified the fee schedule to the Florida Supreme Court. In certifying the question as a matter of great public importance the court found that
The Legislature’s amendment to the PIP statute sought to address the enormous costs and inefficiencies of the law prior to amendment. Litigation and fee-shifting to determine “reasonable” costs of standardized medical procedures should be passé by now. An MRI, for example, is now a common procedure. The medical cost accounting and national metrics supporting the Medicare Part B reimbursement figures for MRIs and other standard medical services are widely used and understood. An alternative charge based essentially on whatever the market will bear, on the other hand, invites litigation. A prevailing provider or insured may also recover attorney’s fees and costs, and resolution of these disputes also requires judicial resources at the expense of all State taxpayers. All of these circumstances are contrary to the original, no-fault objectives of the PIP statute.
Finally, a court that understands the legislature’s intent. The certified question reads as follows
WITH RESPECT TO PIP POLICIES ISSUED AFTER JANUARY 1, 2008, MAY THE INSURER COMPUTE PROVIDER REIMBURSEMENTS BASED ON THE FEE SCHEDULES IDENTIFIED IN SECTION 627.736(5)(a), FLORIDA STATUTES, EVEN IF THE POLICY DOES NOT CONTAIN A PROVISION SPECIFICALLY ELECTING THOSE SCHEDULES RATHER THAN “REASONABLE MEDICAL EXPENSES” COVERAGE BASED ON SECTION 627.736(1)(a)?
To read the entire opinion click here.
Appointed this February, Dan Anderson began his career as a Florida law enforcement officer. As a 25-year veteran of the Drug Enforcement Agency, Anderson now heads the Florida Department of Financial Services, Division of Insurance Fraud. In an interview with the Coalition Against Insurance Fraud, Anderson explains the effect of stricter clinic licensing requirements in Hillsborough County and the Miami-Dade County PIP ordinance we mentioned in a previous post. Anderson also had this to say about the expected effects of the yet to be signed amended PIP law:
I think one of the potential game changers is the prohibition on billings. One of the bigger problems over the last few years was the explosion of clinics owned by massage therapists, many of whom we have proven to be straw owners and obtaining false exemptions from the AHCA license requirements. If the massage therapists can no longer bill, it could dramatically affect a large percentage of the PIP fraud that exists. This is not to say that all massage therapists are bad or committing fraud, but it is clear from our investigations and information collected by the Insurance Consumer Advocate at CFO Atwater’s direction that many have played a substantial role.
The other game changer is the limit of PIP benefits to $2,500 unless declared an emergency medical condition. It cuts down on the profit margin of the accident clinics, which have been paying large sums to recruit patients. This takes a big bite out of their ability to pay for patients, as their pool from which that money is drawn from dwindles.
We are also looking forward to the formation of the PIP Fraud Strike Force. This Strike Force, along with DIF, will look for ways to reduce fraud in the system. This group of dedicated professionals will be an additional tool in our fight against PIP fraud and will be able to accept donations for additional on-the-ground resources for law enforcement and state attorneys in the ongoing fight against PIP fraud.
The full interview is available here.
The debate continues on on whether or not a PIP insurer can utilize a “Fee Schedule” in reimbursing PIP claims. The question seemed to be answered in the case of Kingsway Amigo v. Ocean Health (4th DCA) and Geico v. Virtual (3rd DCA). In both these cases the Court’s answered the question by saying that without specific reference in the insurance policy a PIP insurer cannot benefit from the permissive language found in Florida Stat. 627.736 5(a)2. However Judge Ungaro of the Southern District Court of Florida recently ruled on a class certification issue in All Family v. State Farm (S. Dist. Fla.). According to Maria E. Abate and Matthew C. Scarfone of the Daily Busniess Review, Judge Ungaro
examined Kingsway, and its explanation that the PIP statute provides for two distinct methods for paying reimbursement: “Relevant to the present motion, the Kingsway court held further that an insurer’s choice of method could be binding, but looked to the contract between the insurer and the provider to determine whether the insurer had so elected to bind itself to one of the two methods available under the Florida statute.” … The contract language at issue in All Family referred only to the reasonableness method of reimbursement, and not to the fee schedule method. … Quite significantly, the court rejected All Family Clinic’s argument that, by applying a fee schedule-based formula in paying reimbursement, State Farm waived the right to contest the reasonableness of each charge. The court concluded that “§627.736(4)(b) permits State Farm, barring a contractual provision stating otherwise, to consider the reasonableness of each charge at any time, including the present litigation.”
The full article is available here
General Counsel of Florida Justice Association, “No question PIP lawsuits will increase after January.”
Among other changes, the amended Florida PIP law will no longe provide coverage for treatment provided by massage therapist and acupuncturist, services the Florida Legislature identified as a major contributing factor to the rising costs of PIP insurance.
Addressed in other posts is the “emergency medical condition” requirement of the amended PIP law. The Tampa Bay Times notes:
Only people diagnosed with an “emergency medical condition” will be eligible for the full $10,000 PIP benefit. Medical doctors, osteopathic physicians, dentists, physician assistants or advanced registered nurse practitioners will be authorized to make the determination.
Those with less severe injuries will receive only $2,500. Soft-tissue injuries that are common in car accidents, such as soreness, swelling and bruising, are not expected to be considered emergencies.
Paul Jess, general counsel of the Florida Justice Association that represents trial lawyers, said there is no question PIP lawsuits will increase after January. Because the “emergency medical condition” definition will determine whether or not patients are eligible for $2,500 in benefits or $10,000, there will be disagreements.
“That’s a pretty big disparity, so you can bet that there will be litigation over what is and is not an EMC,” Jess said.
The full article is available here.
Yesterday the United States 11th Circuit Court affirmed the lower court’s denial of class certification in DWFII Corporation v. State Farm. The Plaintiff, by way of a class action, filed suit against State Farm challenging State Farm’s use of the National Correct Coding Initiative (NCCI) edits. The 11th Circuit federal appellate court affirmed the Southern District’s ruling and found:
DWFII is unable to satisfy the typicality prerequisite of Rule 23(a).
Even if the class is able to show that NCCI edits are impermissible under FLA.
STAT. § 627.736 et seq., each individual medical service provider in the class must
still demonstrate that it is entitled to reimbursement for the disputed charges—i.e.,
the bill was properly completed pursuant to FLA. STAT. § 627.736(5)(b)(1)(d), the
benefits of the insurance plan were not exhausted at the time of the procedure, the
recipient of the medical services had valid insurance coverage with State Farm,
and the medical provider actually performed the services for which it billed.
Furthermore, State Farm is entitled to present any unbundling or set off defenses
that would allow it to properly reduce the amount of reimbursement due. FLA.
STAT. § 627.736(5)(b)(1)(e). Because each claim would require the establishment
of different facts and would be subject to different defenses, we conclude that the
district court did not abuse its discretion in finding that this prerequisite was not
met and class certification was therefore improper.
The entire order is available here: DWFII v. State Farm (11th Cir).
On the final day of the 2012 Florida legislative Session, the Florida Senate passed (22-17) a modified PIP/No-Fault law with significant changes from the 2008 version of the statute.
According to Senator Mike Haridopolos, the 2012 legislative session was an effective one. ”[T]he legislature also made sweeping changes to the state’s personal injury protection (PIP) medical benefits under the No-Fault law and laws related to motor vehicle insurance fraud. Currently, PIP is wrought with fraud and abuse, and this legislation, sponsored by Senator Joe Negron (R-Stuart), reforms PIP from start to finish and will end the cycle of rising auto insurance premiums.”
A copy of the amended No-Fault Statute can be found below: