TALLAHASSEE — For Gov. Rick Scott and state legislators, the problem is painfully obvious: Car insurance fraud costs drivers nearly $1 billion a year in increased premiums.
Now they must confront the problem and reduce fraud in a minefield of interests including insurers, doctors, chiropractors, hospitals and lawyers.
Scott says they can fix it. But many have tried before and failed and as a result, fraud in personal injury protection (PIP) is worse than ever, and insurance premiums are higher than ever.
The latest reform effort began in earnest this week as Senate and House committees tackled PIP fraud. A solution, if there is one, is months away.
"I believe we can and should save PIP," Chief Financial Officer Jeff Atwater said in testimony before the Senate Banking and Insurance Committee. "It's been hijacked."
Among the proposals lawmakers are considering are caps on attorneys' fees; limits on how many times patients can undergo procedures such as massage therapy or chiropractic care; stricter regulation of storefront pain clinics; the hiring of more fraud investigators to crack more cases; and allowing insurers more than the 30 days under current law to determine whether claims are legitimate.
In the PIP fraud centers of Tampa and Miami, as elsewhere, minor fender-benders have become major profit centers as paid runners recruit "victims" from accident reports and lure them to clinics, often for a fee, so they can exhaust the $10,000 PIP benefit.
Lawyer referral services, advertising on TV and Facebook, appeal to victims with promises of recouping lost wages and paying all medical expenses.
At the Senate hearing, Atwater faulted the insurance industry for not disclosing data on claims that could help lawmakers find a solution, and he said the state should insist that any reduction in fraud that lowers premiums be returned to consumers.
An industry representative said antitrust laws limit how much information the companies can make public.
Some lawmakers say the system is beyond repair and should be abolished, and that a mandatory $10,000 benefit creates an irresistible money pot for scam artists.
"You can't fix PIP," says Sen. David Simmons, R-Maitland. "There will always be rampant fraud."
Rep. Mike Horner, R-Kissimmee, said he will propose repealing PIP in 2014 and replacing it with a law requiring all drivers to carry bodily injury insurance and an "inexpensive" emergency medical payment.
Hospitals and insurers not only want to retain PIP, they want to increase the $10,000 benefit. They testified in favor of raising the benefit, in effect since 1979, to justify rising health care costs. Senators quickly dismissed the idea.
Rep. Jim Boyd, R-Bradenton, the point man for PIP reform in the House, says insurance companies can cite losses to justify higher premiums that they pass on to policyholders.
"The ones hurt the most are the working families, the single mothers, who can ill afford these prices," Boyd said. "I still believe there's a chance to fix this problem."
PIP fraud has been around in Florida for a long time.
In June 2000, then-Insurance Commissioner Bill Nelson's office broke up a fraud ring and arrested 51 people in Miami and Hialeah following a yearlong investigation.
Also that year, a statewide grand jury confirmed that PIP fraud was rampant throughout the state, and repeated legislative attempts to curb fraud have been dismissed as timid and ineffective.
The 2000 grand jury report noted that 20 years earlier, a Dade County grand jury "criticized this practice of 'ambulance chasing.' "
"Here we are again," said Sen. J.D. Alexander, R-Lake Wales.
Steve Bousquet can be reached at firstname.lastname@example.org or (850) 224-7263.