Just a year ago Hillsborough County had the most incidents of personal injury protection (PIP) fraud in Florida and the second-most in the country behind New York City. We were ground zero for insurance fraud not only in Florida, but the nation. Today, we are on our way to lower car insurance premiums and safer roads.
Last year, the 775 staged auto accidents reported in Hillsborough County resulted in a cost of approximately $15.5 million. This fraud is directly linked to the rising car insurance premiums in our state. The National Insurance Crime Bureau (NICB) estimates that auto insurance fraud may cost an individual policyholder in Hillsborough County as much as $350 or more in increased insurance premiums.
With so many families struggling to make ends meet and after many failed attempts to fix this problem in Tallahassee, it was time to find a community-based solution. In July 2010 I put together a work group of detectives and attorneys from the Hillsborough County Sheriff's Office, members of the NICB, the Hillsborough Fraud Alert Team and the Hillsborough County Attorney's Office. After nearly 14 months of meetings with the medical, legal and insurance industry, we drafted the Hillsborough County PIP Medical Provider Ordinance.
Our ordinance targets a loophole in state statutes that allowed fraudulent clinics to operate without a license. By closing this loophole we require clinics that meet the fraudulent activity profile to register with the county and obtain a local license to do business.
The clinics we targeted get more than 90 percent, or $200,000 of their gross income, from PIP providers. In order to obtain a license, they are required to list the physician who is responsible for the clinic, identify all the employees of the clinic along with background information, and maintain regular business hours. These requirements ensure that the clinics being licensed are actual medical practices and not shell companies whose only business is filing fraudulent claims against insurance companies.
Our ordinance has had impressive results. Within a month of its passage, 79 suspected fraudulent clinics closed, with another 32 closing the next month. According to the NICB, staged auto accidents have dropped 62 percent from 2010 to 2011. Half of these closures have occurred since the ordinance passed.
The Hillsborough Consumer Protection Agency, responsible for enforcement of the ordinance, reports that nearly half of the disputed clinics have closed, 22 percent have applied for exemptions or licenses, leaving only one in four still outstanding.
The NICB also reports a dramatic decrease in questionable insurance claims. In 2010, there was an average of 40 questionable claims per month. In 2011, after the passage of the ordinance, that number dropped to nearly zero.
I hope the Hillsborough County PIP Medical Providers Ordinance will serve as a model ordinance for other counties and communities across the state and country to combat the financially devastating impacts of PIP fraud.
But just as important as the ordinance itself is the process that got us here. A bipartisan collaboration of individuals both from the public and private sector set aside their political ideology and self-interest to focus on achieving one goal — eradicating PIP insurance fraud Hillsborough County. Together we gave law enforcement the necessary tools to put more criminals behind bars while minimizing the impact on legitimate medical clinics and small business owners.
Our goal was to work to lower insurance rates for Hillsborough County families. By working together and listening to each other we passed meaningful legislation that will make life a little easier for our families.
Leaders in Washington and Tallahassee should take note and use this as a model, not just for tackling the issue of car insurance fraud, but also as a testament to the things that can be accomplished if elected officials put aside partisan politics and instead concentrate on making a difference.
Kevin Beckner is a Hillsborough County commissioner.