Florida’s No-Fault Reform Fraud Laws are Working
A new report released by the Florida Office of Insurance Regulation provides fresh evidence that anti-fraud laws are working to reduce the number and cost of Personal Injury Protection (PIP) insurance claims.
Long known as the nation’s top state for “questionable” PIP claims, Florida enacted legislation in May 2012 (House Bill 119) that established stronger penalties for medical providers who commit PIP fraud, including a five-year license suspension and 10-year restriction from PIP reimbursement. The law also established a 14-day, post-accident window for accident victims to seek medical treatment and reduced certain PIP benefits and treatments.
Since the law went into effect in January 2013, the Florida Department of Financial Services reports a “substantial decline” in PIP fraud with a projected 16 percent decrease during Fiscal Year 2013-2014 compared to Fiscal Year 2011-2012. The findings showed a general decrease in the per claim costs and the overall number of claims, especially in South Florida and the Tampa/St. Petersburg regions. The trends are expected to continue over the next year. The findings are similar to those reported by NICB in March of last year.
The results for auto insurance customers may be even more encouraging. In an analysis of rate filings by insurance companies both before and after the anti-fraud law went into effect, the Office of Insurance Regulation determined that statewide, PIP rates increased 43.3 percent in the two years prior and decreased 13.6 percent afterwards.
“It’s clear that this progressive move by the State of Florida to strengthen anti-fraud legislation was the right move for the state’s auto insurance customers,” said Joe Wehrle, president and CEO of the National Insurance Crime Bureau.
“Organized crime rings and unscrupulous lawyers and medical providers are finding it much riskier to rip-off insurance companies by filing fraudulent PIP claims” he added.
Wehrle cautioned that more data will be needed to know the full effect of House Bill 119, but stressed that continued enforcement efforts by regulators and law enforcement are vital to reducing PIP fraud.
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