PIP 'Reforms' Disguise Insurance Industry Profit Grab

Reprinted / reposted from: http://www.sunshinestatenews.com/story/pip-reforms-disguise-insurance-industry-profit-grab

 

 

Proposed legislation writes loopholes into the law to help insurers

Recently, I read a commentary on your site from yet another special-interest group funded by the powerful insurance industry, with a name that sounds as if they are looking out for the interests of Florida’s consumers.

Your readers need to understand, however, that these so-called “consumer groups” are part of the insurance industry’s public relations engine, which is using the seemingly admirable mantra of reducing PIP fraud to disguise their real intentions of making it easier to delay or deny payments on legitimate PIP claims.

The statistics that often are cited are misleading at best. Let’s be clear: PIP fraud is wrong and must be stopped; but Florida consumers are being blatantly misled by these various consumer groups proclaiming that PIP fraud is rampant and is costing all Floridians significantly in what they pay for PIP.
Insurance companies are continuing to earn record profits, and they are continuing to look for ways to reduce what they pay for legitimate PIP claims. And, contrary to representations made by the various consumer groups, PIP premiums have not gone up in years. Clearly, there is no shortage of insurers fighting for your business – just take notice of all the advertisements and solicitations consumers see every day.

To fuel the uproar, consumer groups keep telling us that PIP fraud is rampant because “questionable claims” in Florida are on the rise. But, has anyone ever stopped to ask what a questionable claim really is?

The term most frequently used is in conjunction with data from the National Insurance Crime Bureau (NICB). As the NICB would confirm, questionable claims are simply initial claims referred to them from their member insurance companies based on what those companies believe to be "questionable" or "suspicious." Such claims are not yet determined to be definitive acts of fraud.

In addition, it is significant to point out that when the number of PIP questionable claims in Florida, according to a March 22 NICB report, is compared to the total number of crashes in Florida (as compiled by the Florida Department of Highway Safety and Motor Vehicles), PIP questionable claims represent less than 1 percent of all crashes (2009: NICB – 2,347 PIP QCs/FLHSMV – 235,778 crashes). And, it is important to keep in mind that data from the Florida Division of Insurance Fraud show that only 4 percent of all reported possible PIP fraud claims it receives (about 5,500) result in prosecution.

So, is PIP fraud really as rampant as insurance companies want all of us to believe? No, it is not.

Some provisions in the proposed PIP legislation have nothing to do with fighting fraud and will instead create a potentially unreasonable burden for medical providers and policyholders to get legitimate bills paid and could lead to fewer medical providers willing to treat PIP patients.

One outrageous provision in the proposed legislation would require medical providers and policyholders to submit to deposition-like questioning, examinations under oath, before claims will be paid. Another provision would allow an insurance company to deny a claim if there is a simple typographical error on a bill or in the policyholder’s medical records. And, the law would limit the amount of legal fees the insurance company would have to pay if it is determined to have wrongly denied a claim. How do any of these provisions stop PIP fraud? They don’t.

If the proposed legislation becomes law, many insurance companies will take advantage of loopholes that will be created in order to make it expensive, time-consuming and frustrating for medical providers to treat PIP patients. That is not fair to consumers. Legitimately fighting fraud must be the real target. Please do not fall for the insurance industry rhetoric.
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Cris Boyar is president of Floridians for Fair Insurance. FFI seeks to reform policies in Florida known as “bad faith” insurance laws and to protect Florida’s small-business owners and consumers from the threat of lawsuit abuse.