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New PIP law could have big loophole, St. Petersburg lawmaker says

TALLAHASSEE — A glitch in a new state law reforming no-fault car insurance could allow companies to deny claims, a lawmaker is alleging.

Rep. Rick Kriseman, D-St. Petersburg, penned a letter to Gov. Rick Scott spelling out what he described as "numerous errors" in the recently approved law. The most glaring, according to Kriseman, is an oversight that could prohibit medical providers from performing personal injury protection, or PIP, treatments during a six-month window.

The way the law is written, new licensing rules for clinics take effect July 1, but another section of the law outlining facilities that are exempt from licensing requirements doesn't go into effect until Jan. 1. As a result, insurers could deny claims filed by these "exempt" providers during the gap, Kriseman said.

He said Monday that something should be done to fix the law before the implementation date and Scott, currently starring in television ads touting the benefits of PIP reform, needs to do it.

"I'm putting the ball in his court," Kriseman said about the governor. "He is the guy who pushed for this legislation."

Kriseman said he has yet to hear from Scott's office. The governor is currently traveling with state business leaders in Spain.

Others say there is nothing for the governor to clarify.

The Agency for Health Care Administration issued a memo on May 8 that was intended to reassure medical providers that the law doesn't create any lapses in coverage that could affect payment.

Insurers say that even if there is a technical glitch in the way the law was written, they know better than to exploit it.

"For insurance companies to use the gap to deny claims, I think, would be an embarrassment," said Michael Carlson, executive director of Personal Insurance Federation of Florida, an organization that represents State Farm, Progressive and Allstate. "I don't think anybody is going to try to game it because you are just going to get yourself in court a whole lot of times."

But Kriseman, a personal injury attorney, said he doesn't want to leave the decision up to insurance companies to act in good faith.

"As we typically say to children, 'If you want our trust, you have to earn it through your actions,' and they haven't earned my trust thus far," he said.

Kriseman takes issue with other aspects of the law, including the definition of an "emergency medical condition." Only patients diagnosed with an emergency condition will be eligible for the full $10,000 benefit, but the law doesn't explicitly say how that will be determined.

That and other new provisions are untested and seemingly headed to the courts to clear up gray areas. But that won't happen until after the new year, when most of the policy changes take effect.

Kriseman said he is also concerned by complaints he has received from constituents that the PIP reform measure is being blamed for auto rate hikes. He doesn't have any hard evidence to back that up, but he said he has received several calls.

The PIP reform lawmakers passed on the final day of the 2012 legislative session is intended to reduce litigation and fraud and, as a result, car insurance premiums. Insurance companies pushed for many of the changes found in the law but resisted efforts by the Senate to require rate reductions.

Instead, insurance companies must either reduce PIP premiums by 10 percent by Oct. 1 or provide the state justification for why costs didn't go down. By 2014, insurers are supposed to reduce rates by 25 percent.

Carlson said none of the companies he represents have said that they will raise rates because of the new law and most are hopeful it will lead to savings that can be passed along. The status quo, which continues to cause PIP costs to skyrocket, is much more troubling, he said.

"Everybody needs to understand," he said, "that today's market conditions are not good."

Tia Mitchell can be reached at or (850) 224-7263.

New PIP law could have big loophole, St. Petersburg lawmaker says 05/21/12 [Last modified: Monday, May 21, 2012 10:51pm]
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