Tag Archives: PIP insurance

Questionable PIP Claims Decline in Florida, Reports NICB

Tighter legislation, enhanced public awareness, and coordinated law enforcement efforts appear to be having a positive effect on PIP fraud in Florida, according to a recent report by the National Insurance Crime Bureau (NICB).

The new study published by the organization showed Florida’s personal injury protection (PIP) questionable claims (QCs) have dropped 7.6 percent from 2012 to 2013. More striking, however, was the extraordinary decline from 2010 through 2013, when Florida’s staged accident QCs decreased 61.82 percent during that time period.

Compare those statistics to 2009, when Florida not only topped the nation in PIP QCs reported to the NICB, but also had twice as many as the second-highest state, New York. From 2008 through 2010, the total number of QCs in Florida increased by 34 percent.

When NICB delved further into these results, it found that about 62 percent of total PIP costs and about 43 percent of PIP treatment costs came from soft tissue treatments. Massage treatments accounted for 22 percent of those treatments, and massage therapists had the largest increase in charges per patient at 51 percent from 2005 through 2010, after factoring in for medical inflation.

“We are encouraged by the decline in questionable claims that we’ve seen recently, but by no means are we declaring victory in Florida,” said NICB President and CEO Joe Wehrle.  “Florida remains a hotbed for fraudulent activity and we can’t afford to ease up for a moment in our fight against those who would abuse the system and burden Florida consumers.”

In September 2011, the Hillsborough County Commission was one of the first legislative bodies to enact a county ordinance to license PIP clinics and deter suspicious vehicle collisions in the county. Although an injunction against the law remains in effect, it hasn’t stopped other legislation. In February 2012, Miami-Dade County passed a similar ordinance requiring registration of PIP clinics, and the Florida legislature passed House Bill 119 in May 2012.

This two-part legislation institutes stronger penalties for medical providers who commit PIP fraud, including a five-year license suspension and a ten-year restriction from PIP reimbursement. It also imposes a 14-day post-accident window for accident victims to seek medical treatment and reduces specified PIP benefits and treatments. A lawsuit and injunction ensued, but eventually, the law was put into effect in late October 2013.

Although NICB does not receive all QC data in Florida, the data used to produce this report came from the same sources used in previous Florida QC reports. “Combining these legislative and regulatory efforts with a robust public awareness campaign and aggressive law enforcement response, the modest improvement in 2013 PIP QC data does suggest the initial stages of a positive downward trend,” NICB confirmed.

Click on the link to read the NICB Data Analytics ForeCAST Report regarding Florida Personal Injury Protection (PIP).

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

Medical Costs Associated with Auto Accidents Rise Despite Reduced Injury Severity

Medical expenses tied to auto injury insurance claims have outpaced inflation, even though there has been a downturn in the seriousness of those reported injuries, according to a study recently released by the Insurance Research Council (IRC).

According to the report—Auto Injury Insurance Claims: Countrywide Patterns in Treatment, Cost and Compensation—the average claimed economic losses reached $14,207 per personal injury protection (PIP) claimant in 2012, growing at an annualized rate of 8 percent from 2007.  Economic losses include expenses for medical care, lost wages and other out-of-pocket expenditures. Among bodily injury (BI) claimants, the rate of average claimed losses grew 4 percent to $10,541 in 2012 from 2007.

However, the study found that over the same period, measures such as the “percentage of claimants who had no visible injuries at the accident scene” or who had “fewer than 10 days in which they were unable to perform their usual daily activities” provided evidence of a continuing decline in the severity of injuries.

The study also looked at a variety of factors in the upswing of medical care expenses, including the shift toward more costly treatments and diagnostic alternatives as well as dramatic increases in billed charges for visits to numerous types of medical providers. The use of pain clinics, attorney involvement, and claim abuse were found to exacerbate the increases in medical care expenses, the study found.

“Medical care costs continue to escalate, especially among first-party claimants,” Elizabeth Sprinkel, senior vice president of the IRC, announced. “Looking forward, the industry will need to continue its vigilance in contending with these expanding costs, particularly as it monitors the possible spillover effects from general healthcare reform.”

The 2014 edition of the study is the seventh of its kind conducted by the IRC.  The council collected data on more than 35,000 auto injury claims closed with payment under the five principal private passenger coverages. Twelve insurers, representing 52 percent of the private passenger auto insurance market in the United States, participated in the study. For more information, visit IRC’s website at http://www.insurance-research.org.

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Filed under Fla. Stat. 627.736 (2008)

Florida Ranks #6 in Worst Drivers Nationally

Drivers in the sunshine state are the most careless in the country, according to survey results compiled by CarInsuranceComparison.com from multiple sources, including the National Highway Traffic Safety Administration, the National Motorists Association, and Mothers Against Drunk Driving.

Florida ranked as one of the Top 10 states in the country for bad driving, with an overall rank of #6, a slight improvement from its #4 ranking in prior years.

Each state was evaluated on the basis of five data points, with high scores reflecting poor performance in the lineup of all 50 states plus the District of Columbia. Individual category rankings for Florida are as follows:

  • Careless Driving = 51
  • Tickets = 48
  • Failure to Obey (Traffic Signals + Seat Belts) = 38
  • Fatalities Rate per 100 Million Vehicle Miles Traveled = 33
  • Drunk Driving = 18

States that ranked the worst for bad drivers, according to the survey, are Louisiana (#1), South Carolina (#2), Mississippi (#3), Texas (#4), and Alabama (#5).

Careless driving can be caused by distractions like cell phones and texting. Florida’s low ranking in tickets written, at 48 out of 51, indicates that drivers may feel less at risk of punishment for their poor driving behavior.

The worse the drivers rank in a given state, the higher the auto insurance premiums. Florida ranks among the top 10 most expensive states for car insurance, at #10, according to a 2012 article in the Palm Beach Post. The average Florida driver pays $1,784 in auto insurance premiums a year, or 3.36 percent of household income, based on national statistics.

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Filed under Insurance Fraud

Court Grants State Farm Motion in Terlep Chiropractic Case

Defendant State Farm’s insured, Mark Kundrat, was allegedly involved in a car accident on July 9, 2009.  Kundrat sought treatment for injuries sustained in the accident from Plaintiff Terlep Chiropractic. On November 22, 2010, Terlep filed a cause of action against State Farm, alleging failure to pay PIP benefits.  As an affirmative defense, State Farm argued that Terlep Chiropractic lacked standing to bring the cause of action.  Terlep argued that a “Financial Policy & Consent Form” signed by Kundrat as a condition of receiving treatment conveyed to Terlep the right to bring any and all causes of action against State Farm.

The document signed by Kundrat, and upon which Terlep relies, contains a paragraph entitled “Assignment of Benefits.”  In that paragraph, Kundrat assigned payment directly to Terlep Chiropractic and agreed that he is financially responsible for charges not covered by the assignment or which the insurer declines to pay.  The court found that this language unambiguously serves only to direct payment by the insurance company to the medical provider and that there is no language conveying any and all rights, including the right to bring any and all causes of action.  Because the language in the instant case does not convey a full assignment of any and all benefits and rights under the policy, the Plaintiff does not have standing to bring this cause of action against Defendant.

Terlep, in turn, argues that State Farm lacks standing to challenge the assignment of benefits because it lacks privity of contract.  The court points out, however, that State Farm is not challenging the contract between Terlep and Kundrat.  Rather, State Farm is raising the issue of the interpretation of the “assignment of benefits” part of the agreement.

Terlep further argues that it has standing to bring the cause of action based on equitable assignment.   The court concludes that the cases upon which Terlep relies for this argument should be distinguished because they involved situations in which the documents contained ambiguities and inconsistencies.  In this case, the document at issue is “clear and unambiguous,” and therefore equitable principles do not apply.

Plaintiff’s final argument is that it is the real party in interest and that entry of final judgment against it would deny it a remedy at law.  The document provides, however, that the insured is financially responsible for any payments not made to Plaintiff, and any cause of action is therefore between Kundrat and State Farm.

The court granted Defendant State Farm’s motion for full and final summary judgment.

The case is Terlep Chiropractic v. State Farm, Circuit Court, 6th Judicial Circuit in and for Pinellas County. Case No. 10-006194-SC. December 5, 2013.

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Filed under Case Law, Fla. Stat. 627.736 (2012)

11th Circuit Court Grants State Farm’s Request to Depose Imaging Center Owner

Petitioner State Farm sought to depose Respondent YH Imaging’s owner, Yamir Hernandez, as well as other individuals who allegedly performed portable x-rays in this case.  Respondent YH sought to have State Farm’s motion for discovery dismissed.

State Farm made their Motion for Discovery pursuant to Florida’s PIP Statute.  That statute provides, in  relevant part, that in “the event of a dispute regarding an insurer’s right to discovery of facts under this section, the insurer may petition a court of competent jurisdiction to enter an order permitting such discovery. The order may be made only on motion for good cause shown  . . . .”  §627.736(6)(c) Fla. Stat. (2013) (emphasis added).

In this case, the Court concluded that State Farm had established, through its motion and supporting affidavit, the necessary good cause to bring the discovery action.  The Court cited favorably two cases  holding that PIP insurers should be able to obtain informal discovery upon simple request and that court-ordered discovery is available upon a showing of good cause.  See Kaminester v. State Farm, 775 So. 2d 981 (Fla. 4th DCA 2000); State Farm v. Goldstein, 798 So. 2d 807 (Fla. 4th DCA 2001).  The Court also found persuasive orders granting similar actions for discovery entered by other judges in the 11th Judicial Circuit.

The Court granted petitioner’s Motion for Discovery and denied Respondent’s Motion to Dismiss.  State Farm was thereby granted leave to conduct the depositions at issue.

The case is State Farm Mutual Automobile Insurance Company, et al. v. YH Imaging, Inc., In Re OM, MM, et al., Circuit Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 11 28263 CA 05 (24).  December, 3, 2013. Click on the link to read the court order.

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Filed under Case Law, Fla. Stat. 627.736 (2012)

Motion for Rehearing of Florida PIP Injunction is Denied

On November 26, 2013, the First District Court of Appeals dismissed a motion for rehearing on its October ruling to reverse an injunction placed on reforms to Florida’s PIP system. The reforms, contained within HB 119 and signed into law by Gov. Rick Scott in 2012, ban PIP payments to acupuncturists and massage therapists. The reforms also require that claimants seek treatment from a physician or hospital within 14 days of an accident.

A group of acupuncturists, massage therapists, and chiropractors filed for an injunction, which was ultimately granted. The Court of Appeals ruled in October that the injunction should be reversed. It upheld this decision by denying a motion for rehearing on its ruling.

We wrote in September about reservations expressed by a three-judge panel from the 1st District Court of Appeals regarding the challenge made by acupuncturists, massage therapists and chiropractors to key parts of Florida’s 2012 landmark reform of the personal-injury protection (PIP) auto insurance law, in a blog post titled “Judges Question Challenges Brought to Florida’s No Fault Insurance Law.”

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Filed under Case Law, Fla. Stat. 627.736 (2012)

UAIC v. Atlantic Medical Specialty

Atlantic Medical Specialty (Atlantic) provided treatment to Manuel Floyd, an individual insured by United Auto, following a November 19, 2007 automobile accident. Atlantic subsequently filed a PIP claim with United Auto, demanding payment for medical treatment or services provided to the insured. United Auto failed to pay, and Atlantic filed suit.

In its answer to Atlantic’s complaint, United Auto asserted the affirmative defense that the medical treatment was not lawfully rendered as Atlantic failed to comply with chiropractic record-keeping statutory requirements.  In response, Atlantic filed a motion for summary judgment, asserting that United Auto’s defense had no legal basis. The trial court granted Atlantic’s motion for summary judgment.

The appellate court found that the affirmative defense that the medical treatment was unlawfully rendered was a valid affirmative defense as it was asserted under section 627.736(5)(b)(1)(b) of Florida Statutes.  The court further found that failure to comply with chiropractic record-keeping requirements is a valid legal ground to support such a defense. As such, the striking of the defense by the trial court was erroneous.

The appellate court also found that summary judgment in Atlantic’s favor on the issue of reasonableness, relatedness, and medical necessity, was improperly entered because Atlantic had not met its initial burden of proof to conclusively show the absence of genuine issues of material fact.

The appellate reversed and remanded the case for further proceedings in the trial court.

Click on the link to read the appellate court ruling in United Automobile Insurance Company, Appellant, v. Atlantic Medical Specialty, Inc., A/A/O Manuel F. Floyd, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 12-010 AP. L.T. Case No. 09-01233 CC 05. August 29, 2013.

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

Mobile X-Rays Lead to Summary Judgment in Milo v. State Farm

Plaintiff Milo Diagnostic Center filed suit against Defendant State Farm to recover PIP benefits for mobile x-rays provided to Pedro Barreto, a State Farm insured. According to Florida PIP Statute Section 627.732(2) (2006), only medically necessary services are covered.  “Medical necessity” is defined as those services that a prudent physician would provide in a manner that is in accordance with generally accepted standards, clinically appropriate, and not primarily for the convenience of the patient or medical provider.

In a motion for summary judgment, State Farm argued against the medical necessity of such mobile x-rays in this case. State Farm presented evidence in the form of a deposition of a Department of Health expert that, pursuant to the Florida Administrative Code, mobile x-ray equipment is only to be used where it is impractical to transfer the patient to a stationary radiographic location. The reason for this caution is that the use of mobile machines results in increased radiation to the patient and inferior quality films. State Farm also relied upon an affidavit of a chiropractic doctor attesting that the use of mobile x-rays on Barreto was not medically necessary.

On November 12, 2013, Judge Jason E. Dimitris granted Defendant State Farm’s Motion for Summary Judgment regarding Medical Necessity. Judge Dimitris expressed the Court’s concern about the increased radiation exposure and poor quality films. Milo did not file a written response, but did appear at oral argument. Judge Dimitris held that since Milo did not produce counter-evidence sufficient to create a genuine issue of fact concerning the medical necessity for the use of mobile x-rays in this case, State Farm’s motion for summary judgment was granted and final judgment in the case was entered.

Click on the link to read the Judge’s order in Milo Diagnostic Center, Inc. vs. State Farm Fire & Casualty Co., No. 07-30146 SP 23 (4) (Fla. Miami-Dade Cty. Ct. 2013).

Contact partner Jessica Z. Martin via email or at 954-462-0330 to discuss any questions about the case.

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Filed under Case Law

Miami Court Rules on Reasonable and Unreasonable Charges

In an October 8, 2013 ruling in the matter New Medical Group, Inc. vs. United Automobile Insurance Company by Judge King in the County Court of Miami-Dade County, the court held that an insurer is not required to expressly elect to pay only a reasonable charge. Furthermore, the Court held that the insurer cannot be required to pay 80% of “unreasonable” charges simply because it did not initially elect to use the fact-dependent reasonableness standard.

Pursuant to the Florida PIP statute, two alternative methodologies exist to determine whether a medical provider’s charges are reasonable. In the first, reasonableness is a fact-dependent inquiry determined by consideration of various factors, including state and federal fee schedules. Section 627.736(5)(a)1. Alternatively, the insurer may limit reimbursement to the provided fee schedules, thereby avoiding submission of the reasonableness issue to the trier of fact.  (5)(a)2.

In Geico Gen. Ins. Co. v. Virtual Imaging Servs, Inc., the Supreme Court held that the insurer cannot limit reimbursement to the fee schedules pursuant to (5)(a)2 unless it makes an express election in its policy to do so.  This methodology is considered “permissive.”  To the contrary, the reasonableness determination in (5)(a)1 is mandatory, not permissive, and is considered the “default methodology.” A PIP insurer is not required to expressly elect to pay only a reasonable charge.

Concerning the determination of the reasonableness of charges, the PIP statute expressly prohibits medical providers from submitting unreasonable charges. (5)(a)1. The burden lies with the plaintiff to prove the reasonableness of the charges. The burden of proof does not shift to the insurer to prove that the charges are unreasonable simply because they did not expressly elect (5)(a)1, which is the mandatory, default method of determining reasonableness. Thus, absent a valid election under (5)(a)2, the issue of reasonableness is a question for the trier of fact under the methodology described in (5)(a)1.

The case is New Medical Group, Inc. v. United Automobile Insurance Co., Civil Division Case No. 11-01870 SP 26 (Fla. Miami-Dade Cty. 2013). Click on the link to read the Judge’s Order.

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Filed under Case Law, The Statutory "Fee Schedules"

Insurance Adjuster Notes Protected as Work Product in PIP Case

In an October 15, 2013 decision, the Florida 11th Circuit Court of Appeals held that notes from appellant State Farm’s insurance adjuster were protected under the work product privilege.

On July 29, 2008, State Farm was notified of a claim for PIP benefits by South Miami Health Center.  The documents at issue were those notes made by the adjuster from that date until September 17, 2008. The trial court had compelled production of these documents from the adjuster; the Appellate Court here quashed this order, determining that an improper legal standard was applied and that production would cause irreparable harm to appellant.  The Appellate Court indicated that the correct standard to apply in Florida is that discovery of claims file documents is prohibited absent a bad faith issue.

Here, the underlying case involved breach of contract and/or coverage—not bad faith—and the Court determined that there should therefore normally be “automatic work product protection.” Reviewing the issue of the documents’ discoverability de novo, the Court concluded that the documents at issue were entitled to work product protection, and the motion to compel was quashed.

Furthermore, in discussing that the work product privilege only applies to materials obtained or developed in anticipation of litigation, the court was persuaded that, in today’s litigious society, the term “anticipation of litigation” should be broadly construed.

The case was remanded to the trial court.

Click on the link to read the ruling in State Farm Mutual Automobile Insurance Co. vs. South Miami Health Center, No. 12-031 AP (Fla. 11th Cir. Ct. 2013).

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