By: Lyle Koenig, associate at Abramowitz, Pomerantz & Morehead, P.A.
Over the course of many years, there has been much criticism leveled at attorneys and doctors over the perceived abuse of the Personal Injury Protection (PIP) coverage. In short the way PIP works is if you get into an accident, regardless of fault, your own auto insurance, under the PIP coverage, will cover your medical bills at the rate of 80 percent up to $10,000. This coverage is important because as stated, it is one’s own insurance, not the at fault driver’s insurance, that must cover these bills. The criticism, leveled mostly by the insurance industry lobby, has been that injury victims, the doctors that treat such victims and the lawyers seek to abuse the system by inflating bills and injuries to enrich their own pockets (of course, the executives of the insurance companies tend not to live like paupers). According to the insurance lobby, PIP premiums must be inflated to cover such actions and the insurance companies still barely break even.
Based upon the lobbying efforts of the insurance industry, there have been many changes to the PIP laws over the last few years. Most recently, Florida has enacted new laws soon to be put into action. To be sure, there is some abuse of the system. Stories of individuals staging accidents or doctors fraudulently billing for patients never treated make for disturbing headlines. Such acts are fraudulent and are illegal. Unfortunately, the new law seems to do little to stop any of this.
As the law was only recently passed, there are many uncertainties revolving around the changes. However, a cursory review shows the following:
1) A person must seek medical services within 14 days of the accident, otherwise, PIP coverage is waived;
2) PIP will only provide $2500 in benefits unless the injured person has an emergency medical condition.
As to point number one, often times I am contacted by an individual who had an accident over 2 weeks ago, tried over the counter medication but comes to the realization that the pain is just too severe and not going away. This person will now not get PIP benefits. As to point number two, the definition of emergency medical condition is vaguely defined and will open up the floodgates to more litigation and uncertainty. Even though a policy holder will be paying premiums for $10,000, it would not be suprising to see the insurance company try and get away with only providing $2500 in coverage. There is little that is consumer friendly. It is unclear how this will stop fraud. It is unclear how this will stop the growth of the referral companies who flood the airwaves with commercials. Moreover, the insurance companies have already indicated that it is unlikely the changes, which the insurance companies pushed, will lead to a reduction in premiums. Combined with prior changes to the PIP laws, it would seem to me that the convoluted system emerging is becoming far removed from the initial justification of PIP, a system designed to ensure appropriate care by providing adequate coverage and the prompt and speedy payment of medical bills. Although lip service is given to stamping out fraud, the changes do not appear to seriously address it.
I had the privilege of being in Tallahassee during the 60 day legislative session and saw both the good and the bad in the process. I was able to observe firsthand the entrenched partisanship and lobbying, as well as the genuine concern for the citizens of Florida. Unfortunately, the changes to the PIP laws do nothing to help the citizens of this state. The legislature never considered making PIP optional if one has health insurance. Also, once again, the legislature summarily dismissed the possibility of making bodily injury liability coverage mandatory.
I would urge the consumer to closely examine their legislators and candidates, determine where they stand on the issues and if that they truly care for the wellbeing of their constituents or just care about funding their next campaign.