Tag Archives: PIP insurance

Third DCA Rules for Insurer in GEICO v. Gables Insurance Recovery

In an opinion issued December 10, 2014 in the case of GEICO v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), the Third District Court of Appeal quashed a Circuit Court Appellate Division’s decision affirming final judgment in favor of Gables Insurance.

Lauzan, who was insured by GEICO, was injured in an automobile accident in 2008. After obtaining medical treatment, she assigned her GEICO policy benefits to All X-Ray Diagnostic Services, which subsequently assigned the benefits to Gables Insurance.

GEICO paid less than the amount it had been billed, and Gables Insurance filed a breach of contract action against GEICO. GEICO argued that Lauzan’s $10,000 PIP benefits had been exhausted and that it therefore had no further liability to Gables.

Deciding in GEICO’s favor, the Third District Court of Appeal held that the PIP statute does not require an insurer to pay more than the $10,000 limit in PIP coverage. Further, it does not require an insurer to “set aside” funds in anticipation of litigation. The Court noted that two other District Courts of Appeal have addressed the issue, holding that a showing of bad faith or impropriety on the part of the insurer is required before it can be held liable for benefits above the statutory limit.

Quoting a recent Fourth District Court of Appeal case, Northwoods v. State Farm, the Court concluded that once PIP benefits are exhausted, “an insurer has no further liability on unresolved, pending claims, absent bad faith in the handling of the claim by the insurance company.”

The case is GEICO Indemnity Co. v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), Case No. 3D13-2264 (Fla. 3rd DCA, December 10, 2014). Click on the link to read the court opinion.

The case cited is Northwoods Sports Medicine v. State Farm, 137 So. 3d 1049 (Fla. 4th DCA 2014).

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

Third DCA Upholds Ruling in PIP Case Millennium Radiology v. State Farm

On December 10, 2014, the Third District Court of Appeal affirmed a trial court ruling in Millennium Radiology (a/a/o Yesenia Arango) v. State Farm. In the case, Yesenia Arango’s $10,000 PIP policy limits were exhausted after a lawsuit was filed and served on State Farm by Millennium Radiology.

Roig Lawyers attorney Mark Rose had successfully argued in the lower court that paying out the entire $10,000 was a complete bar to additional claims against the policy of insurance, absent bad faith on the insurer’s part or the insurer’s payment of untimely submitted bills. Following the ruling, the case was certified as a question of great public importance to the Third District Court of Appeal.

The Third District Court of Appeal affirmed the ruling, finding that in an action brought by an assignor of PIP benefits that is founded upon a breach of contract, exhaustion of PIP benefits after a lawsuit is filed “absolves the insurer from any responsibility to pay an otherwise valid claim” where the exhaustion occurred (1) after the insurer paid an amount less than the provider feels was appropriate; (2) after a lawsuit has been served on the insurer; and (3) absent any bad faith by the insurer in the handling of the claims.

The case is Millennium Radiology v. State Farm, Case No. 3D12-3143 (Fla. 3rd DCA, December 10, 2014). Click on the link to view the court ruling.

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

Will Florida’s Reported Drop in PIP Fraud Continue?

Florida, one of 12 states with no-fault auto insurance, has reported its fair share of insurance fraud, mostly through scams involving Personal Injury Protection. PIP insurance provides personal injury protection up to $10,000 in immediate medical coverage without having to establish fault in the court system.

As industry insiders know, this monetary level is often seen as an easy target by fraudsters. Even though PIP premiums have represented only about 2 percent of all of Florida’s collected insurance premiums, they account for nearly half of all auto insurance fraud referrals, the Florida Office of Insurance Regulation (FOIR) has established.

But all of that may be changing, the National Insurance Crime Bureau believes, as auto insurance fraud has actually dropped in Florida since a 2012 law reformed PIP. As we posted on our FL PIP Guide this past March, tighter legislation, enhanced public awareness, and coordinated law enforcement efforts appear to be having a positive effect on PIP fraud in Florida.

These changes specifically include stronger penalties for medical providers who commit PIP fraud, a 14-day window for accident victims to seek medical treatment, and reduced benefits and treatments.

In line with projections made when HB119 was passed, FOIR expects PIP coverage rates to decrease by an average of 13.2 percent, reducing auto insurance rates 1.2 percent overall, according to figures based on a review of data from 20 insurers that provide auto insurance to more than 75 percent of the Florida market.

However, because PIP coverage savings will still be relatively small in comparison to the overall total cost of a typical auto insurance policy, and because fraud is at times difficult to detect, the next few years may be a better indication of whether these changes have produced a statistical blip in the numbers or a longer-term trend.

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

Two More Join Class Action Suit Alleging Excessive Billing in PIP Claims at Florida Hospitals

In September, we reported on our FL-PIP Guide about two women injured in unrelated car accidents filing suit against a holding company that operates several hospitals in Florida. Marisela Herrera and Luz Sanchez alleged that HCA Holdings grossly overcharged for their emergency room radiological services.

Now two more Florida residents have joined the lawsuit in an amended class action that alleges Memorial Hospital Jacksonville, North Florida Regional Medical Center of Gainesville, JFK Medical Center, and parent company HCA have violated Florida’s Deceptive and Unfair Practices Act, according to a GlobeNewswire story.

Nicholas Acosta and Penny Wollmen, the new plaintiffs, also claim they were excessively billed and charged unreasonable fees for emergency radiological services covered in part by the plaintiffs’ Florida Personal Injury Protection (PIP) insurance. Florida’s PIP statute mandates that insurers pay 80 percent of all reasonable expenses.

However, Acosta was charged $6,965 for a CT scan of his spine and $6,277 for a CT scan of his brain after he was treated in the ER of Memorial Hospital in October 2013 following a car accident. After Wollmen’s accident in February 2014, she was billed $6,853 for the CT scan of her cervical spine, $6,140 for the CT scan of her brain, and $1,454 for a thoracic spine X-ray by North Florida Regional Medical Center.

Because of the allegedly inflated expenses, the complaint claims that each of the plaintiff’s $10,000 PIP coverage was prematurely depleted and that they were billed thousands of dollars for radiological services not paid for by their PIP insurers.

As a result, plaintiff Wollmen, for example, has been paying out-of-pocket expenses for additional chiropractic treatment that normally would have been at least partially covered by her PIP insurance if it had not been used up by hospital bills.

The complaint also charges breach of contract. All four plaintiffs technically entered into a “Condition of Admission” contract that stipulates patients must pay their accounts at the rates stated in the hospital’s price list.  None of the plaintiffs were given a price list at the time of their medical treatment.

The amended class action lawsuit was filed October 15, 2014, in U.S. District Court Middle District of Florida, Tampa Division.

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Filed under Insurance Fraud

JFK Medical Center Target of Lawsuit Alleging Excessive Billing in PIP Claims

Two women injured in unrelated 2013 car accidents have filed suit in Hillsborough County Circuit Court against a holding company that operates several hospitals in Florida, according to an article in The Tampa Tribune. The women allege that HCA Holdings grossly overcharged for emergency room radiological services.

The plaintiffs claim that the alleged overcharging harmed them in two ways:

  • First, because PIP covers only 80% of emergency medical care, they were left to pay 20% of the inflated charge.
  • Second, the excessively high rates prematurely sapped their $10,000 PIP benefits, leaving them each to pay the remainder of the costs.

One of the women, Marisela Herrera of West Palm Beach, underwent CT scans and x-rays at JFK Medical Center in Atlantis following her traffic accident. (JFK Medical Center is owned by HCA; it is the only HCA medical facility specifically named in the suit). The images done at JFK allegedly cost Herrera nearly $18,000. Plaintiffs say Medicare would typically pay only $465 for the same number and type of images.

Florida’s PIP statute mandates that insurers pay 80% of all reasonable expenses. Such exorbitant charges, plaintiffs allege, are well in excess of this reasonable amount. These charges form the basis of the plaintiffs’ claim that they were victims of “unreasonable, unconscionable and unlawful pricing and billing practices.”

The lawsuit seeks reimbursement for the plaintiffs of the out-of-pocket expenses due to the “excessive and artificially inflated medical bills.” Plaintiffs also request that the court prohibit HCA from charging those fees and order it to stop efforts to collect outstanding emergency radiological bills. The lawsuit seeks class-action certification.

The case brought by Ms. Herrera is Herrera, Marisela v. JFK Medical Center Limited Partnership, Case No. 14-CA-008372, filed on 8/18/14 in Hillsborough County Circuit Court.

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Filed under Insurance Fraud

Court Rules for Progressive in Health Care Clinic Licensing Dispute

On July 29, 2014, the 13th Judicial Circuit Court for Hillsborough County granted final judgment in favor of Progressive Insurance in a case involving licensure violations by defendant health care clinic Best Medical. The defendant did not undertake a defense.

The following facts were undisputed:

  • Best Medical listed licensed massage therapist Jorge Romero as its 100% owner;
  • Romero did not actually own Best Medical, but was paid $2,000 a month for the right to use his credentials and claim that he was the owner;
  • Best Medical obtained a certificate from the State of Florida exempting it from licensure as a health care clinic by utilizing Romero’s credentials; and,
  • Progressive paid Best Medical PIP reimbursements in excess of $97,000 in response to bills submitted.

In his analysis of the case, Judge James Arnold noted that the Florida PIP statute requires that medical services be lawfully rendered and the corresponding bills be lawfully submitted to be valid. Additionally, the statute provides an insurer, such as Progressive, the right to challenge potential licensure violations, including the ownership of a clinic.

Florida’s Health Care Clinic Act requires that all medical clinics operating in Florida be licensed unless they are exempted. Relevant here is that a clinic “wholly owned by one or more licensed health care practitioners” is exempt from licensure.

The facts showed, however, that Romero was never the 100% owner of Best Medical. The clinic was therefore not entitled to the exemption for being wholly owned by a licensed health care practitioner.

Lacking a lawful exemption, Best Medical was required to possess valid licenses pursuant to the Health Care Clinic Act. Because it possessed no such licenses, Best Medical lacked the ability to lawfully render medical services and lawfully submit corresponding bills as required by Florida’s PIP statute.

Accordingly, Progressive was held not liable for payment of the bills rendered by Best Medical for reimbursement of purported medical services.

The case is Progressive v. Best Medical Healthcare Solution (f/k/a Tropical Healing Power), Case No. 14-CA-000327 Div. J (July 29, 2014). Click on the link to read the Final Judgment.

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Filed under Case Law

Uninsured Motorists Declining but Still a Concern in Florida, New Study Finds

A new study released by the Insurance Research Council (IRC) found that the estimated percentage of uninsured motorists has been in decline since 2010. According to the organization’s latest report, “Uninsured Motorists, 2014 Edition,” 14.9 percent of drivers were uninsured in 2003, but that figure dropped to 12.6 percent in 2012. That’s about one in eight drivers on the road who are uninsured, according to the study’s most recent data.

The study’s numbers were figured based on a ratio of insurance claims made by individuals who were injured by uninsured drivers to claims made by those who were injured by drivers who had insurance.

Although there is an overall downward trend nationwide, the IRC has broken the percentages down by numbers for each state and discovered great variation. Nationally, the number of uninsured drivers peaked at 29.9 million in 2009 and moderately declined to 29.7 million in 2012.

In terms of states, Florida ranked second in the highest total number of uninsured drivers with 3.2 million. California ranked highest with 4.1 million, while Texas followed Florida with 1.6 million, the report found.

The study also revealed that Florida ranked high in terms of the estimated percentage of uninsured motorists per state. That number is highest in Oklahoma at 26%, followed by Florida (24%) and then, Mississippi (23%).

The “Uninsured Motorists” study also analyzed the total number of uninsured motorist claim payments and found that amount has climbed drastically in spite of an overall drop in the number of uninsured drivers.

Not counting fatalities and total permanent disability claims, the IRC estimates that $2.6 billion was paid in the U.S. on 2012 uninsured motorists’ claims. This is a 75 percent increase over the past 10 years, translating to $14 per insured individual in 2012.

According to Elizabeth A. Sprinkel, CPCU, senior vice president of the IRC, these numbers show that “responsible drivers who pay for insurance end up also paying for injuries caused by uninsured drivers.”

“The declining trend in the percentage of uninsured motorists is a positive development for consumers; however, the heightened levels of uninsured motorists and the rising claim payments involved still remain a concern for insured drivers, insurers and policymakers,” she said.

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Filed under Insurance Fraud