Florida’s No-Fault Reform Leads to Downward Trend in Suspicious Claims

A new report by the National Insurance Crime Bureau reveals a decline in Florida’s personal injury protection (PIP) questionable claims (QCs). In 2013, Florida PIP QCs declined by 7.6 percent from 2012. Meanwhile, for the period 2010 through 2013, Florida staged accident QCs decreased by 61.82 percent.

Tighter legislation, enhanced public awareness and a coordinated law enforcement response appear to be having the intended effect on PIP fraud in Florida. “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.”

A Brief History of Florida PIP Fraud

In 2009, Florida not only led the nation in PIP QCs reported to NICB, but had twice as many as the next highest state, New York. From 2008 through 2010, the total number of QCs in the state increased by 34 percent.

According to the Florida Department of Financial Services, Division of Insurance Fraud, for fiscal year 2010-2011, 49 percent of the referrals it received were related to PIP fraud.

When these statistics were brought to light, further research was conducted to determine potential abuses and fraudulent activity within Florida PIP. These findings showed that about 62 percent of total PIP costs and about 43 percent of PIP treatment costs came from soft tissue treatments. Twenty-two percent of soft tissue treatments were massage treatments. From 2005 through 2010, massage therapists showed the largest increase in charges per patient—51 percent—accounting for medical inflation.

In the face of this trend, legislative changes to Florida’s PIP system were enacted. First, the Hillsborough County Commission passed a county ordinance in September 2011, intended to license PIP clinics and decrease the number of suspicious vehicle collisions—staged accidents—in Hillsborough County. A similar ordinance requiring the registration of PIP clinics was passed the following February in Miami-Dade County. However, an injunction against the Hillsborough County law remains in effect.

At the state level, the Florida legislature passed House Bill 119 in May, 2012. The enactment of this law was a two-part process. The first part established stronger penalties for medical providers who commit PIP fraud, including a five-year license suspension and a ten-year restriction from PIP reimbursement. The second part of the law established a 14-day, post-accident window for accident victims to seek medical treatment and reduced specified PIP benefits and treatments. A lawsuit followed and an injunction stopped the law from being put into effect until it was lifted in late October 2013.

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.

Source: NICB