Gov. Rick Scott signed a bill designed to crack down on rampant fraud in Florida's no-fault automobile insurance system on Friday but said he's worried about a potential loophole in the new law that goes into effect July 1.
"They are already trying to scam the system," Scott said while flanked by about 50 law enforcement officers.
The governor signed the bill at the Northeast Florida Law Enforcement Training Criminal Justice Center on the north campus of Florida State College in Jacksonville.
Consumer advocates also say the law simply will pad insurance company profits because there's no guarantee they'll pass on anticipated savings of more than $1 billion annually to their customers by cutting premiums.
Existing law requires motorists to buy what's called personal injury protection, or PIP. The coverage pays for injuries and lost wages up to $10,000 regardless of who is at fault in a crash.
Fraudsters, though, have taken advantage of the system by submitting bogus injury claims and staging fake accidents, aided and abetted by certain health care providers eager to collect additional fees.
The new law puts a 14-day limit on seeking treatment following a crash. Benefits also will be capped at $2,500 unless a medical doctor, osteopathic physician, dentist or a supervised physician's assistant or advanced registered nurse practitioner determines the injured person has an "emergency medical condition." Chiropractors, though, cannot make that determination.
At least one company last month began offering to send doctors or osteopathic physicians to chiropractors' offices to clear patients for chiropractic care beyond the $2,500 limit. Its solicitation tells chiropractors: "Don't miss out on your $7,500."
Darrell Stollings, CEO of Medical on Demand Staffing, said the Tampa firm is trying to make sure patients get needed care rather than attempting to skirt the law.
Its sponsor, Rep. Jim Boyd, R-Bradenton, called the plan a brazen attempt to defeat the legislation's intent.
"Somebody comes up with a way to get around things all the time, but we'll keep focusing on it," Scott said after the signing ceremony.
Other provisions require referral by a physician, osteopath, chiropractor or dentist for follow-up services and care and eliminate coverage for message therapy and acupuncture.
It also denies benefits if claimants refuse to be questioned under oath, gives judges authority to limit lawyers' fees and requires clinics that care for PIP patients to pay license fees and sign fraud notices.
Health care practitioners could lose their licenses for five years if found guilty of PIP fraud.
"This was an issue that was costing our citizens a lot of money," Scott said. "This is an opportunity to reduce the cost of living if we've done this right. ... If not, we're going to keep focusing on it."
The Legislature, though, rejected a proposal that would have required a 25 percent reduction in no-fault premiums. Instead, the law calls for a 10 percent reduction unless insurance companies explain in detail why they cannot cut rates.
A 25 percent reduction is provided for through a second rate filing due Jan. 1, 2014, but insurance companies again can avoid it with an explanation.
"The consumers of our state are unlikely to see any relief, but they will lose benefits," Florida Consumer Action Network executive director Bill Newton said in a statement. "In fact, accident injury costs will shift to health insurance premiums and indigent care programs, while auto insurance companies pay less in claims. It is possible consumers will pay more, not less, because of this bill."
Florida's no-fault law was passed in 1972 in an effort to make sure people who are injured in automobile crashes receive care when they need it instead of having to endure delays while insurance companies review their claims or lawsuits work their way through the courts.
However, it has proven to be a juicy target for criminals, resulting in higher premiums for the mandatory coverage. The Tampa and Miami areas have been hotbeds for staged accidents and fraudulent claims.