FPCA Legislative Update: Senate Banking and Insurance Committee Report–April 5

 

The Senate Banking and Insurance Committee met today, April 5, and was scheduled to consider SB 1930, sponsored by Senator Bogdanoff (the “Fraud” bill), and SB 1694, sponsored by Senator Richter (the “Legal Fixes” bill).

 

Summary

After some confusion regarding which amendment to SB 1930 was being considered, the Committee took up Senator Bogdanoff’s “Strike-All” amendment, number 328022.  Senator Bogdanoff explained that the amendment continues to address major issues consistent with the original bill, but it “dials back” on some controversial issues.  Numerous public appearance cards were presented and it became clear during public testimony on the amendment that the Committee would run out of time.  Senator Bogdanoff extended invitations to interested parties to present their issues with the amendment to her prior to the next Committee meeting, noting that they should first reach consensus within their groups if possible.  At that point the meeting was adjourned prior to any vote on SB 1930 or its amendments, and prior to any consideration of SB 1694.  It seemed apparent that the Trial Bar’s strategy was to take up the entire meeting time so that a vote could not be taken.

 

Senator Bogdanoff’s Strike All Amendment

During the Committee meeting, Senator Bogdanoff highlighted some of the differences between the original bill and the Strike All amendment:

• The insurer must pay or deny the claim within 90 days (rather than 120 days in the original bill);
• Includes acupuncturists in § 627.736(1)(a);
• Provides claimants with two opportunities to appear for an examination under oath before triggering the rebuttable presumption that failure to appear is unreasonable;
• Provides that Chief Financial Officer and Attorney General will each appoint one state attorney to the Board of Directors of the Automobile Insurance Fraud Strike Force, rather than the Attorney General making both appointments;
• Bifurcation of legitimate and fraudulent claims such that fraudulent claims are not due payment, but legitimate claims are;
• With respect to the fee schedule, changes “may” to “shall.”

 

Public Testimony

Public testimony was heard from representatives of the Florida Justice Association, the Florida Chiropractic Association, the Department of Financial Services, and the Division of Insurance Fraud.  The issues raised and discussed include the following:  concerns that doctors will be inconvenienced by having to submit to examinations under oath; medical record production requirement as a condition precedent to payment of claims is not limited in scope; patient countersignature requirement will be difficult to implement since most doctors use outside billing services; examinations under oath of doctors are not limited in scope; the preferred provider network will consist of insurer-friendly doctors that will be a disadvantage to consumers.

Ashley Mayer, Director of Legislative Affairs for the Department of Financial Services, spoke in support of the amendment.  She informed the Committee that there is a sixty (60) percent increase in the number of PIP fraud cases reported to the Division of Insurance Fraud.  She warned members of the Committee that failure to act to address the fraud problem will result in private carriers leaving the market and the Florida Automobile Joint Underwriting Association becoming the only available option.  Interestingly, Senator Fasano noted that he is asked by his senior constituents why they have to purchase PIP coverage since they have Medicare, suggesting that it may be time to abandon the No Fault Law.  Ms. Mayer responded that the goal of the CFO’s office is to fix PIP to meet its original intent, and she “hopes” they “won’t have to go there.”

Colonel John Askins of the Division of Insurance Fraud impressed upon Committee members that the fraud problem is pervasive.  He explained that clinics are set up just for the purpose of committing fraud.  While he believes the penalties for committing fraud are appropriate, the dockets are “jammed” and it is hard to get prison sentences imposed.  According to Colonel Askins, the amount of fraud is so voluminous, meaningful legislative reform must be passed.  In response to a question by Senator Hays, Colonel Askins stated that his top three priorities for addressing PIP fraud include: 1. Capping attorney fees; 2. Tighter regulation of clinics; and 3. Sending more fraud perpetrators to prison through tougher laws and more prosecutors.

 

 

Should you have any questions or comments, please contact Katie Webb (kwebb@cftlaw.com) at Colodny Fass.

 

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