Anti-Fraud Measures Advance Through Florida Legislature

Pieces of house legislation that would beef up anti-fraud efforts and make some changes to the ways no-fault insurance claims are handled received initial OKs in their first rounds of votes this week. They still need to gain approval from other committees before being voted on by the full house.

National Insurance Crime Bureau Staged Accident Data

HB 967 has advanced slightly farther of the two.

Main effects of the bill would be to cap attorney fees at $10,000 or less, to permit insurers to use stricter fee schedules for billing for medical services, to require examinations under oath from claimants who are reasonably suspected to have been involved in fraudulent claims and to allow for insurers to establish arbitration as the sole method of settling disputes.

So how would these measures help combat fraud?

According to the Property Casualty Insurers Association of America (PCI), Florida auto insurance companies often decide to simply pay questionable personal injury protection (PIP) claims rather than take them to court. This is because insurers who lose in court contesting claims have to pay for the cost of their own attorneys as well as those of the other party’s attorneys, which together often exceeds the $10,000 minimum pay-out limit that comes with PIP policies. Capping fees could make an environment more conducive to challenging questionable claims.

Making fee schedules more extensive would make claims sizes tied more closely to reasonable costs of services, keeping billing more justified and discouraging the price inflation that is reported to be driving up costs for insurers and consumers.

The bill would establish submission to an insurer-requested examination under oath as a condition for collecting reimbursement from a claim. Insurers requesting these examinations must have a reasonable basis for doing so. Providers could also require medical providers to submit documents verifying the services provided and the medical necessity of those services.

Allowing for arbitration to be the main means of resolving disputes is intended to help lessen the burden on the state’s courts.

HB 1411 overlaps with some of the provision of HB 967, but on the whole targets fraud more broadly.

This bill would require police to fill out more extensive crash reports for more types of accidents, extend the payment period for questionable PIP claims, demand more documentation from health care providers, establish greater fines for filing fraudulent claims and create an organization dedicated “to support he prosecution, investigation and prevention of motor vehicle insurance fraud.”

According to the National insurance Crime Bureau, Florida is the state with the highest volume of questionable claims involving staged accidents.

Both bills received overwhelmingly favorable votes from the Insurance and Banking Subcommittee. HB 967 was approved on a 9-6 vote from the Civil Justice Subcommittee, where HB 1411 now sits awaiting a vote.

 

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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