PIP'S CAP SET IN 1979 IS FAR BELOW 2011 REALITIES, INSURANCE INDUSTRY SAYS
An article by Christine Jordan Sexton in the September 26, 2011 edition of the CURRENT states that a second meeting was held for Insurance Consumer Advocate Robin Westcotts personal injury protection work group. The work group, that is comprised mostly of insurance executives as well as lobbyists for doctors and lawyers, is examining PIP fraud, abuse and potential recommendations on how to fix it. If PIP cannot be shaped up the work group will recommend a system to replace it.
Westcott told the group that at times it appears as though they are "insurance companies, doctors and lawyers fighting over money,'' noting that she had seen a replay of the committees initial meeting on television. "Really, thats what it looked like from a consumers perspective."
Florida law requires owners of automobiles to purchase $10,000 of personal injury protection insurance, which compensates people in auto accidents regardless of who is at fault.
Although much of the groups conversation has focused on staged accidents and unlicensed PIP clinics, the group heard testimony from Blue Cross and Blue Shield of Florida lobbyists and Florida Hospital Association lobbyist Ralph Glatfelter on what $10,000 in PIP coverage can buy in 2010.
The $10,000 PIP cap was passed in 1979 and hasnt been altered since. When health care dollars are adjusted using the consumer price index, PIP payment levels would have to be set at $61,673, Steven Smith from Blue Cross said. Westcott said, "Thats pretty telling."
Smith also shared with committee members a snapshot of payouts Blue Cross made in 2010 for automobile related accidents. Once the $10,000 is exhausted, if a person has health insurance, the health carrier is responsible for paying the costs. Smith told the group that nearly 89 percent of the payments made in 2010 were made to "facilities." Specifically the breakout shows that 68.7 percent was directed to hospital inpatient care, 5.1 percent to hospital outpatient care and 11 percent to emergency rooms. The other 11 percent primarily is made up of physicians and other health-care providers.
Glatfelter said that 40 percent of the patients hospitals see from automobile wrecks have no other form of insurance to pay their bills other than the mandatory $10,000 in PIP coverage. Glatfelter said given the large number of uninsured residents, the hospitals cannot support the elimination of PIP because it will increase the amount of uncompensated care hospitals already provide. "We believe its an important form of coverage and if it were to go away another form of similar first dollar coverage ... is absolutely essential," he said.
Glatfelter also noted that mandatory bodily injury wouldnt be a sufficient replacement for PIP from the hospitals perspective because, among other things, it doesnt cover the health care costs of the driver at fault. "Mandatory [bodily injury] BI is a nonstarter," Glatfelter said. "Mandatory med pay we are comfortable with and can live with."
William Large with the Florida Justice Reform Institute, who testified at the groups first meeting, made a second appearance on Monday. He was armed with information about attorneys fees, which he claims is the driving problem in the PIP system today. Large was challenged at the last meeting to find six examples of cases where judges awarded attorney fee multipliers in PIP cases.
Large returned citing nine cases -- mostly from Escambia County -- where fee multipliers were awarded. In a follow-up, Large couldn
t say whether the multipliers were under appeal or whether they were agreed to by the parties beforehand or awarded by a judge.
Meanwhile, a much-anticipated Senate interim study on personal injury protection (PIP) was released Monday but there were no recommendations on what, if anything, should be done to improve the system.
The document is an "issues brief" and includes information collected during an Office of Insurance Regulation "data call" that has been released and publicly commented on several times. It also contains a summary of the various proposed changes to PIP that were floated during the 2011 session, as well as the reasons why the move was being pushed as well as being opposed. Twelve proposals -- from limiting attorneys' fees to required examinations under oath -- are included in the interim study.
James Underwood, a South Florida lawyer who has done plaintiff's work as well as insurance defense work, wrapped up the work groups second meeting by telling members neither the plaintiffs bar nor insurers can claim to be doing "the Lords work."
The working group meets again from 9 a.m. to 4 p.m. on October 10, 2011 as it works toward producing recommendations to change PIP.
If you or someone that you care about has been hurt in an auto accident, you need a legal team that will fight for you and your rights every step of the way. To speak with members of the Charpentier Law Firm about your case and to find out how we can help, contact our Central Florida personal injury attorneys today.
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