PIP Reform, Workers’ Comp on Table as Fla. Session Nears End

As the 2003 Florida legislative session winds down, insurers are reportedly keeping a close eye on key bills concerning PIP reform, flex rating, workers’ compensation, and credit scoring.

Budget concerns reportedly continue to dominate the state’s political environment. However, insurers are actively lobbying several bills of significant importance to Florida consumers and businesses, according to James Taylor, southeastern regional manager of the National Association of Independent Insurers (NAII).

Of special concern are:

PIP reform – The Senate Appropriations Committee approved S.B. 1202, which was developed by the Senate Banking and Insurance Committee using language taken from meetings with the insurance industry, trial lawyers and medical providers. The most recent version includes new alternative dispute resolution language, a new medical peer review provision to establish expedited resolution of medical disputes in PIP cases, and a new alternative dispute resolution process for non-medical issues as well. The bill retains the medical fee schedule at 200 percent of the Medicare fee schedule. S.B. 1202 also addresses criminal insurance fraud, requires registration of PIP clinics, increases funding to the Division of Insurance Fraud and the statewide prosecutor, requires medical providers to explain services being rendered, and requires the insurer or insured to acknowledge which services were rendered to them. The bill is expected to go to the full Senate soon.

The House version of PIP reform, H.B. 1819, passed out of the House Insurance Committee with a number of onerous provisions that weakened or eliminated most industry-supported items. After passage by the Judiciary Committee, the House leadership assigned it to the House State Administration Committee for further review. However, key House leaders later decided that the industry-developed package should not be included, so a proposed amendment to reinstate the provisions was not offered. The only change to the bill from the Judiciary Committee version was the reinstatement of a provision that sunsets Florida’s no-fault law on Oct. 1, 2005.

Flex rating – FCB IN-31-03 would allow a flex-rating option for property/casualty insurers depending on the size of the average rate increase being requested. For motor vehicle insurance a flex-rating option would also be allowed depending on the statewide average rate increase being sought by the insurer. This language was expected to be addressed in committee this week. However, due to the lengthy discussions on workers’ compensation and PIP, as of this date the bill has not been placed on the final agenda of any committee. NAII is still monitoring this issue but as the session goes by it appears that this bill faces a difficult chance of passage. The Department of Insurance is supporting this legislation.

Workers’ compensation – The House State Administration Committee has approved H.B. 1837, which is scheduled for a full House hearing later this week. The bill reduces attorney fees and raises some physician fees and claimant benefits. It includes many of the recommendations from the business and insurance coalition, which includes the NAII, the House Select Committee and the Governor’s Commission on Workers’ Compensation. NAII is lobbying in favor of this legislation and it is expected to pass the House.

However, S.B. 1132, the Senate version, is almost diametrically opposite to the House version. It raises permanent total disability benefits, increases an employee’s potential eligibility for temporary partial and temporary total benefits significantly, retains hourly attorney fees and increases current contingency fees to 20 percent of the first $10,000 and 15 percent thereafter. Although Senate leaders continue to work on this package, it is not expected to change significantly before it goes to the full Senate floor.

“There has been a lot of pressure from key legislators, the business community and the Governor’s office for workers’ compensation reform,” Taylor noted. “This is a strong indication that there will be compromise on the issue and a major workers’ comp reform package is expected to pass this session.”

Credit scoring – S.B. 204, which has been approved by two Senate committees, passed the full Senate by a vote of 39-0. The bill is identical to H.B. 987, which has been approved by the House Insurance Committee. Both bills contain language which closely mirrors the NCOIL model on the use of credit scoring in rating and underwriting. “NAII and the Florida Insurance Council have been instrumental in lobbying this language and having significant positive changes included in this legislation,” Taylor said. The House is expected to pass the Senate bill since it mirrors H.B. 987.