A House compromise proposal to revamp Florida's personal injury protection (PIP) insurance squeaked through the Senate late Friday night just hours before the 2012 legislative session concluded. The measure (HB 119) reduces the types of medical treatments that PIP will pay for.

“No-fault insurers have been besieged with fake injury claims by crooked injury clinics. They have been bleeding insurers for years,” Coalition Against Insurance Fraud’s James Quiggle told Insurance Networking News. “PIP reform is good news for insurance companies because the bill has provisions that apply a great deal of heat on sham clinics that operate solely to make bogus injury claims against auto insurers.”

Among other things, the bill requires claimants to seek treatment within 14 days, that initial treatment be rendered at a hospital or by a claimant's physician, bans massage and acupuncture treatments and tightens licensure requirements for medical clinics.

Under PIP reform, a licensed health care practitioner who is found guilty of insurance fraud will lose their license for five years and may not receive reimbursement for PIP benefits for 10 years.

“We need a well-funded insurance fraud division and dedicated fraud prosecutors for enforcement because insurance fraud is a specialized area. There are lots of loopholes and it’s hard to convict someone of larceny,” said Dartland who is also a Coalition Against Insurance Fraud Boardmember. “More and more cases will be flooding in. Fraud prosecutors need to prepare these cases to put before a jury.”

The bill calls for insurers to submit a rate filing by October 1, requiring insurers to request a 10-percent reduction in rates or explain in detail its reasons for not achieving those savings. A second rate filing must be made by Jan. 1, 2014 and reflect a 25-percent rollback in rates from when the bill became law.

“More and more residents in Tampa, Orlando and Miami drive around without auto insurance because they can’t afford the premiums, which creates a whole other subset of problems,” Consumer Federation of the Southeast Executive Director Walt Dartland told INN. “But once these provisions take effect, I am confident that auto insurance rates will decrease.”

The average premium in Florida is $1,476 a year, according to Insure.com. The national average is $1,500.

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