Florida Agency Clarifies Stance on Insurance Reform Loophole

Florida health care officials hoping to close an unintended six-month gap created by the recent overhaul of the state’s personal injury protection (PIP) system said Tuesday they believe that the recently finalized auto insurance reform law doesn’t take full effect until next year.

Under PIP, insurers compensate policyholders for crash-related medical expenses regardless of who was at fault, but the form of coverage has been criticized as overly broad and susceptible to crime. Floridians asking how much is car insurance have been seeing rising premiums for years now. And, according to the Insurance Information Institute (III), that’s at least partly because of no-fault crimes that cost the state’s residents almost $1.3 billion in higher premiums since 2009.

A revamp of no-fault coverage, titled HB 119, was signed into law last week by Gov. Rick Scott, who prioritized reform because of the rising number of PIP-related crimes and premium costs.

However, language in the new law created a discrepancy between when licenses would be granted to eligible service providers and when listings of exempt providers would take effect.

Under the law’s language, the Agency for Health Care Administration (AHCA) licenses PIP-eligible entities on July 1, 2012, allowing them to receive payment from insurers for treating no-fault patients. But language in another part of HB 119 doesn’t finalize the list of exempt providers until Jan. 1, 2013, putting the AHCA “in a conundrum,” according to a three-page legal memo published Tuesday.

Licensing providers in July, before finalizing a list of exempt providers, “would lead to uncertain and absurd results,” stated AHCA General Counsel Stuart Williams, who added that “without applying the exemptions at the time it begins licensing, the agency cannot determine which entities require licensure.”

Hoping to head off the six-month gap in which insurers could refuse payments to providers meant to be PIP-eligible, Williams stated in the memo that the AHCA believes that the entire law was meant to take effect on Jan. 1, 2013.

The AHCA is the first state agency to publicly comment on the law’s discrepancy. Florida insurance regulators have privately pushed insurers to pay eligible PIP providers, according to media reports.

Aiming to cut into no-fault crimes and excessive medical billings, HB 119 shortened the time patients seeking PIP payouts would have to get post-crash initial treatment to 14 days and limited rewards to $2,500 for less serious injuries.

To obtain the full $10,000 in benefits previously rewarded for PIP-related medical treatment, current policyholders must now prove that they have an “emergency medical condition” that warrants the payout. The new law also eliminates previously popular massage therapy and acupuncture services from eligibility for full PIP compensation.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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