After weeks of speculation regarding the future of PIP in Florida, Governor Rick Scott has announced he will not nix PIP without giving more effort to the system many see as broken. This bodes well for many health care providers who service patients that have been involved in auto accidents. Currently, certain monies up to ten thousand dollars are allocated for treatment of injuries caused by auto accidents. If the injuries are deemed not to be emergent, the cap is $2,500.00. This is the last incarnation of the statute dealing with PIP. It was done in an effort to slow down and hopefully eliminate fraud in the system. Professionals from all sides who deal with PIP agree the current statute is cumbersome and may be unconstitutional. The legislature had been giving much thought to scrapping PIP in favor of mandatory bodily injury limits. That system has appealed to some, but the PIP system is a better fit for Floridians. Many drivers here are uninsured and PIP allows an injured party to get the treatment needed. Without PIP many great health specialists will stop treating accident victims and that benefits no one.
Floridians Pick Your Poison: Pay for Personal Injury Protection (PIP) Insurance or suffer a plethora of small lawsuits! The argument in Tallahassee today was whether we need to get rid of PIP Insurance. Unfortunately no one remembers why we have PIP in the first place! The reason was not to pay for medical bills. The real reason was to stop frivolous lawsuits. PIP suppresses lawyers from filing small lawsuits because all cases must meet the “PIP Threshold.” Cases that do not rise above the threshold have significantly limited value. Lawyers will argue that the threshold is so low that they don’t worry about it. But that is bologna because on top of the threshold, the lawyer must take $10,000 in PIP payments off the jury verdict! Some legislators want to replace PIP with $25,000 of Bodily Injury Insurance. Doing so will remove the “threshold” and guarantee trial lawyers a deep pocket to sue in every case with no deduction from the jury verdict. This will give personal injury attorneys motivation to sue on many more cases. The job of a personal injury attorney is to help people in car accidents. Love us or hate us, that is what we do. What balance is there in the PIP free system when insurance is available to pay every penny of every case?
The state of PIP in Florida is now taking an expected turn. The insurance companies are looking to raise rates. That’s right, raise rates. This is in the face of the insurance lobby’s big push to change the law to cut out fraud. The trade-off would be lower rates. At least that’s how they presented it to the public so the law change that hurts the insured’s rights would be more palatable. The change was to limit the abuse of PIP by providers by having a medical doctor declare the insured’s medical condition an emergency before certain benefits would kick in. The theory being that not many medical conditions could be declared an emergency. This would limit the carrier’s pay outs thereby allowing for lower policy premiums. Once again the people of our state have been defrauded by the insurance industry.
In any event, the new PIP law is so complex and convoluted that no one really knows how it will work or what it will cover. This will spawn more litigation than ever. This was what the insurance industry was trying to avoid. However, by backing a bad and poorly drafted law they have, in effect, caused an outcome that they had so sorely tried to avoid. Now realizing their mistake, they have to find a way to fund this new wave of predictable litigation. How will they do that? By raising premiums, that’s how.
Our legislation is on the verge of gutting our auto personal injury protection (PIP) statutes to make it nearly impossible for policy holders to force their insurance company to abide by the terms of the policy. You see, every driver in Florida must have PIP, and it goes to pay medical expenses for the injured insured. Carriers have historically avoided their obligations by cutting off benefits illegally and stiffing healthcare professionals. When that has happened, the insured could force the carrier to do the right thing and also pay the insured attorney's fees as a deterrent to this illegal activity. But the insurance lobby has a friend in Gov. Rick Scott, and they want attorney's fees capped. They say it's part of an overall plan to get rid of fraud; it's really a plan to allow the carriers to go back to the business of screwing their insureds and the health profession without fear of reprisals.
A colleague of mine from Broward County wrote the following to help you contact your state rep and let them know why these changes are bad. The credit goes to Cris Boyar and is as follows:
Introduction as to why Florida Provides Legal Fees to a prevailing insured
In order to understand why artificial caps on attorney's fees in PIP cases are a bad idea it is necessary to look back and see why fees are awarded to people who sue their insurance company when the insurer wrongfully denied the claim. Early on our legislature recognized that unless something was done to level the playing field between insurer and their policyholders, the insurers could deny claim after claim with impunity.
Recognizing the unfairness of the system and the financial disparity between the insurance industry and its policyholders, the legislature enacted a law that allows policyholders the right to have his or her attorney's fees paid by the insurer in the event they had to sue the insurer and prevailed in their suit. These legal fees are paid only after the case is over and there is a determination the insured prevailed by proving the insurance company wrongfully denied the claim. It often takes years for a case to resolve, and the lawyer incurs all the fees and costs until he or she wins the case.
Much to the dismay of the insurance industry, the very vast majority of suits filed against insurance companies result in favorable outcome for the policyholders, requiring the insurers to pay claims they should have paid in the first place as well as the insured's attorney's fee. This has not resulted in deterring insurers from wrongly denying claims. Now, in the guise of saving policyholders money in premiums, there is an attempt to place a cap or limit on the amount of money an insurance company would be required to pay a policyholder who was forced to sue an insurer.
It should be pointed out that this cap would apply only to the amount of money an insurance company would have to pay for the policyholder's attorney fee and would allow insurance companies to continue to pay their own attorneys any amount necessary to "wage the war." The defense lawyers get paid regularly and even if they lose the case.
Why Capping Attorney Fees is a bad idea
Caps of legal fees will prevent injured citizens and healthcare providers from suing to recover insurance benefits that have been wrongfully withheld by PIP insurers. There is no evidence judges are awarding unreasonable fees and costs to a PIP lawyer that ultimately wins a case. Insurers should avoid denying claims. The best way to keep insurers honest is by forcing them to face the risk of paying the legal fees to the patient/provider if the insurer wrongly denies the claim. We know the State of Florida has no track record of assisting Floridians in getting insurers to pay claims.
The prospect of having to pay reasonable attorney's fees if the insurer is found by a court to have wrongfully failed to pay benefits is what keeps them honest. Without the potential for this adverse consequence, we will undoubtedly see an increase in denied claims, resulting in increased profits for insurers and hardship for Florida's citizens and small businesses owners.
In reality, doctors cannot afford to pay lawyers to force insurers to pay the medical bills for Floridians that are buying insurance that is mandatory. Insurers get the benefit of selling a product every driver must purchase. If they deny a claim, and they were wrong, it is only fair they pay the patient/medical provider's reasonable fees and costs.
Why limiting hourly rates is a bad idea
If you lower the hourly rates to an unreasonably low amount, it will deter the most qualified lawyers from accepting PIP cases. Why would a lawyer that can bill $300 an hour take on a personal injury protection case for just $200 an hour, then face reductions by a judge and be subject to a maximum recovery? PIP cases can be complicated. It is in the best interest of Floridians to have the most qualified lawyers representing the small business owners and individuals that take these cases where they recover a fee only if they prevail.
Why limiting or capping the total amount of fees is a bad idea
PIP insurers are virtually always the driving force in the number of hours spent prosecuting the PIP suit. We know an insurer can avoid paying legal fees if they pay the claim or pay the claim once they receive a pre-suit demand letter. The insurer can pay virtually no legal fees if they pay the claim once they are served with the lawsuit.
Then the insurer can limit what it pays in legal fees without legislative help. They can avoid invoking the rules of civil procedure in cases that are in small claims court. They do not have to demand a jury trial, like they do in virtual every case. They can avoid filing unnecessary affirmative defenses that causes hours and hours of litigation. During the litigation process, it is not uncommon for an insurer to schedule numerous depositions, hire expert witnesses, file countless motions, take appeals in the middle of the case and then appeal once the case is over. There is nothing in the house bill that would deter this activity or limit the legal fees of the defense lawyer that gets paid even if the insurer loses. Insurance companies have no motive to require their lawyers to narrow the issues and avoid unnecessary litigation because if the insurer loses, and has to pay the legal fees, the insurer simply uses these costs to raise premiums.
If the legislature were to cap the amount of fees without preventing the insurer from forcing unnecessary litigation then you will be encouraging insurers to engage in unfair litigation practices because they know the lawyer for the plaintiff would never be able to prosecute the case and fend off the unnecessary litigation. The longer the insurer drags out the litigation the less per hour the lawyer earns. This would discourage competent lawyers from taking these cases which is not in the best interest of Floridians.
Plus, PIP cases are often appealed in the middle of the case and at the end of the case. No lawyer would be able to handle a PIP case if the insurer was allowed to appeal, and the fees were capped. PIP cases can reach the Fl Supreme Court.
Fees cannot be based on the amount of the recovery.
The proposed House attorney fee caps also apply to cases where an insurer has denied coverage. The way the House attorney fee caps are written, the attorney fees are limited to the lesser of $200 per hour or 15 times the monetary amount recovered by the attorney, if the amount in dispute is less than $500. When an insurance company denies insurance coverage and the lawsuit is only to obtain a finding that there is insurance coverage, there is no monetary amount that will be recovered by the attorney. Under the House proposed attorney fee caps, insurance companies can deny coverage, and if they lose they pay zero attorney fees.
Comparing doctors as equal to an insurance company is wrong.
The argument that is made by some that this is litigation between two corporations, akin to litigation between IBM and Microsoft, is a fallacy. The vast majority of PIP providers in Florida are small business owners. These "corporations" typically have only a handful of employees and, as such, it is a fallacy that they have resources to match the behemoth insurance companies in litigation.
The argument that the provider can simply pay its own attorney's fees if it wishes to litigate is also disingenuous. Doctors cannot afford this prospect. If an insurer simply refused to pay a few hundred dollars to each provider, the insurer would save millions. This is the very result that the insurance companies desire. If this passes, insurance companies will be able to deny, delay and defend claims denials with virtual impunity.
Insurers can recover their fees in two ways.
If the insurer makes a reasonable offer and the patient/healthcare provider does not beat the offer by 25%, the insurer gets its fees and costs paid for by the patient/provider. If the lawsuit is determined to be frivolous, the insurer will get its fees paid by the patient/provider and the lawyer representing the patient/provider.
Limiting attorney fees does not prevent fraud.
There is no correlation between fraud and legal fees. There are no examples of cases where the lawyer was arrested for filing a PIP for treatment related to a staged car accident. According to the latest statistics provided by The Office of Insurance Regulation/Robin Westcott, on February 29, 2012, Plaintiff's attorneys' fees represented 2.4% of auto carriers' expenses. There is no reasonable argument that can be made that attorneys are part of the fraud, contribute to the fraud or that capping their fees will reduce fraud.
The reasonable attorney's fee provision currently in place under PIP was established to level the playing field between the Goliath insurance companies, which have unlimited resources, and the individual citizen or small business person, who would have no prospect of obtaining counsel to pursue wrongfully-denied claims in the absence of such a provision.
Many insurance carriers are applying a deductible incorrectly to a medical bill involving personal injury protection (PIP) benefits. When applying for PIP insurance you have the option to have a deductible apply to either the named insured under the policy and/or dependent resident relatives. The deductible option chosen by the insured must be clearly stated on the declarations page. The application of the deductible can be something that is overlooked but can have a HUGE effect on the medical provider or insured that may wrongly become subject to one.
Insurance companies are required to apply the deductible to the full amount of the medical bill prior to any reductions that they later choose to apply. This means that if a medical provider, who accepted an assignment of benefits, bills the insurance carrier for a service to a patient at a cost of $1,200 and there is a $500 deductible that should be applied to the bill, the provider should be reimbursed at 80% of $700. Insurance carriers think that they can reduce the total bill by 80% and then apply the deductible to the reduced amount when this is clearly against current Florida law. If there is a deductible to be applied to a bill, the insurance carrier is to subtract from the total bill and then apply any necessary reductions.
The order in which the insurance carrier receives bills is very important to the application of the deductible. The insurer is not entitled to pick and choose which bills they would like to apply to the deductible but rather is required to apply the deductible to the bills in the order in which they were first received. An example would be, if a hospital’s bill of $2,500 is received by an insurance company on March 1, 2011 and a chiropractor’s bill is received on March 15, 2011, the $500 deductible is to be applied to the hospital’s bill of $2,500 since it was the first bill received. This may not seem like a big deal unless of course you are the party who is wrongly paying money out of pocket that is not owed by you.
Once again the insurance industry is working at convincing the legislature that major Personal Injury Protection (PIP) reforms are necessary in Florida in order to combat the mass amounts of existing fraud which would supposedly in turn reduce everyone’s insurance premiums. This is far from the first time the insurance industry has attempted to convince the law makers that the PIP statute needs to be substantially amended or even revoked completely.
Currently in Florida, every owner or registrant of a motor vehicle is required to carry PIP insurance for any vehicle operated on the roads and highways of Florida (subject to certain exceptions). This is the only type of insurance that is mandatory in Florida. Your PIP insurance will pay up to $10,000 in benefits for bodily injury, lost wages, or death resulting from a motor vehicle accident regardless of whether you were at fault.
The insurance companies are trying to convince you that there is so much fraud resulting from PIP and that is what is ultimately responsible for driving up the insurance rates in Florida. The National Association of Insurance Commissioners is suggesting that Florida should pass legislation involving 4 key elements which would be crucial in fixing PIP:
(1) Allowing a reasonable amount of time to investigate suspicious claims – i.e. give insurers the ability to deny claims unless doctors sit for examinations under oath
(2) Eliminate incentives for filing frivolous lawsuits by placing reasonable caps on attorney’s fees – i.e. having the cap on fees be based on the amount at issue in the Complaint without any bearing on the amount of time it may take to settle the case or the loops the insurers will put you through in the process
(3) Providing greater verification of clinics to ensure that services provided are legitimate- i.e. burdensome registration and inspection requirements for physicians and clinics
(4) Preventing fraudulent unnecessary treatment- i.e. capping the amount of treatment a person is able to receive in PIP coverage involving certain medical services
What would be the result of these reformations? Total control being placed in the hands of the insurance companies with no consumer protections available. These provisions would serve no purpose other than to add additional burdens on the physicians who are treating people with valid injuries, eliminate the ability to hold insurance companies accountable for wrongfully denying benefits, and eventually drive legitimate physicians out of business as well as attorney’s available to represent them. The government needs to focus on the real issues here and what the very unfortunate result would be to the people if total control gets placed in the hands of the insurance carriers!
Propaganda! There must be great success in using propaganda. The injustice of the world is fed to us through biased news and the use of propaganda. Walter Cronkite was trustworthy, but now news reporters have their mouths are filled with biased junk. Objective facts no longer exist. I grow numb to the existence of biased information and stop taking the news seriously. I don’t even trust Hurricane reports any longer. I believe they are meant to keep me tuned in worried about the weather and listening to more commercials (most of which are my competitor attorneys).
No Fault Insurance Company (PIP) "Ex-parte" Communication reprehensible
I understand that we each see one side of “the truth” better than the other. The justice system is filled with parties fighting for their “truth” to be heard. But the court and the judges must stay insulated from all the “propaganda.” The Justice System Works! But to remain fair we cannot allow insurance companies or large corporations to propagandize our judges. Communicating about a case outside the courtroom, or attempting to alter the view of a judge outside the courtroom is impermissible. This type of communication is called an “ex-parte communication” and every first year lawyer knows it is wrong.
The Insurance industry does not believe these or any rules apply to them. There are laws which say pay medical bills at a certain rate. The PIP Insurance carriers refuse to do so and then complain when they are sued. They cry out in a public propaganda campaign that trial lawyers are ruining their right to exist. But they refuse to follow the rules.
United Automobile Insurance Company uses shameless propaganda on a judge
Attached is a letter from Judge Lee. The letter shows United Automobile Insurance Company tried to prejudice the Broward County Judges behind the backs of several prominent Broward County lawyers. I don’t know if Broward was the only county to get the information. What United Insurance Company did was shameless! It is propaganda and manipulation upon a Judge.
Senator John Thrasher, must be the insurance industry's shill. He is certainly an enemy of the Florida consumer. Thrasher has introduced a new insurance bill that guts the muscle out of Florida’s bad faith statute. Presently when an insurance company is found to have acted in bad faith toward their own insured (by the way, that is YOU Mr. Florida Citizen) the Insurance Company is responsible for all the damages they cause, including the entire damages caused to their insured in the accident.
This type of law keeps Florida Insurance companies from intentionally hurting their own customers! Thrasher’s amendments will let the Automobile Insurance Company delay and/or deny their own customer’s claims without penalty.
This bill damages and compresses the rights of consumers in Florida. It empowers the insurance companies to abuse their own customers, and these customers happen to be Florida citizens.
The worst part of the problem is that when Insurance Companies fail to pay fairly with their customers more people get lawyers and it causes more litigation. More litigation puts more pressure on an already overburdened court system.
Governor Scott then believes he can help balance the budget by cutting back on judicial resources. How is that possible when the court system is being jury rigged to create more litigation?
Between Thrasher and Scott the credo of “Let’s get to work” sounds like “Let’s get to work undermining Florida’s citizens.”
Click on the following link to read excerpts from Senate Bill 0624: Motor Vehicle Insurance
In response to a Palm Beach Post article on LaBovick & LaBovick, P.A. filing lawsuits against several insurance companies in Broward County, Mark R. Hanson, Esq., made the following statement, which the Palm Beach Post published in its Op/Ed section on May 9.
Insurance Firms should Pay Providers as per Law
I feel compelled to comment on the article regarding the LaBovick law firm [published in the Palm Beach Post.
The article was critical of our firm for filing volumes of claims against various insurance companies for their failure to fully pay health care providers. The article failed to mention that before a suit can be filed, the insurance company is given two chances to pay the correct amount.
Only upon their failure to pay the doctors after being requested twice is a suit filed. If the insurance industry wants to stop these lawsuits, they simply have to pay the health care professionals what the law requires. Instead, they choose to nickel-and-dime the health care industry. When they get caught, they shift the blame by calling the lawyers greedy.
The insurance companies’ failure to follow the law is what is driving up insurance premiums, not the attorneys who enforce the law. What would an insurance company do if their customers underpaid their premiums by $3?
Florida, being a no-fault state, means that each person’s respective PIP (Personal Injury Protection) insurance will pay for that person’s medical bills up to $10,000. We received the following question from a reader of the LaBovick InjuryLaw Blog:
Injury Law Blog Question: If the accident was the other driver’s fault, and the injured driver in the other vehicle was uninsured, will the at-fault insured be responsible for personal and property damages even though Florida is a no-fault state?
The answer to our reader’s comment is YES. Under general law in Florida, a person who is found at-fault in an accident is responsible for the other person’s damages that are caused. So, if the at-fault driver caused both personal and property damage, then the at-fault driver is responsible for that.Continue Reading...