Automobile fraud has increased in the past years costing insurance companies millions of dollars in fraudulent claims. Further, this cost is being passed to consumers through increased insurance premiums. Insurance fraud is committed through staged accidents, fake medical treatment, and billing for services not rendered. PIP (Personal Injury Protection) is the primary target of auto insurance fraud in Florida. PIP was implemented by the legislators to provide immediate care and treatment for those involved in automobile accidents.
The State of Florida requires that every motor vehicle driver carry PIP coverage, also known as no-fault coverage. This coverage requires insurance companies to pay up to $10,000. 00 in medical bills and loss wages, regardless of fault. Legislators have been attempting to fix the system by filing bills in regards to the issues surrounding PIP, but none seem to achieve positive results. A new bill has just cleared aimed at preventing fraud in Florida’s Personal Injury insurance.
The problem with insurance fraud is that the perpetrators seem to stay one step ahead of any legal actions or changes in the law and are able to find a loophole and get away with the crime; but the consumer should not have to pay for their illegal actions. Not enough has being done to correct the ramping (is ramping the right word here? Rampant? ) problems of fraud with PIP in Florida. It has been shown that PIP fraud will continue to increase premiums paid by consumers in Florida if not brought under control.
There are several methods to combat this fraud: Legislative changes, increased punishment for the perpetrators of fraud and increased consumer awareness; all are necessary to resolve the problem. Thus far, only legislative changes have been proposed. Among other things, this new bill stipulates that every crash victim is to be treated at a hospital or urgent care clinic within 72 hours of the accident in order to recover PIP benefits. This requirement does not impact people that are actually injured in an accident; instead, it is aimed at cutting down on the instances of fraud.
Currently, it is not uncommon for people to present injury claims for which they do not start treating for months after the accident. However; this change will prevent them from recovering benefits if no emergency care is sought within the time set within the bill. This small change in law might impact the way hospitals and urgent care facilities operate, resulting in increased need for emergency care, long waits and overcrowded emergency rooms, but in return, it will result in monetary gain, as recovery from PIP is much higher than that from Health care, Medicaid and Medicare.
This bill also attacks fraud by requiring that a long police report is filed on every automobile crash containing all passenger information. Currently, a driver’s exchange of information form is acceptable when presenting a claim for injuries and this form usually lacks a detailed description of the accident and passenger information. This small change could help avoid the many claims involving jump-ins (individuals not involved in the accident that claim to have been in the vehicle) and staged accidents.
Cases when no police report is filed or only a driver’s exchange of information report is filed, include minor fender benders, parking lot accidents, and hit and runs (collision with phantom vehicles). Meanwhile, ads and radio commercials promise crash victims money for their injuries motivating them to commit insurance fraud. Those that are not truly injured may seek treatment that they do not need in exchange for monetary gain. The bad economy is another reason many people turn to illegal activities to get money.
Many see PIP as a way of making money fast, as they are promised to recover up to $10,000. 00, but what they don’t know is that unscrupulous medical providers and lawyers controlling the fraud rings are the ones profiting from PIP. Usually, when there is PIP fraud involved, there is a connection between the medical provider and the lawyer. Another measure in the new bill is the requirement that medical facilities specializing in injury treatment obtain the appropriate licensing and certification in order to bill the insurance carriers for treatment provided.
Currently, many counties do not hold these providers to any form of strict licensing requirements. This enables questionable clinics to close down and reopen a few days later under a new name. These clinics bill excessive amount of claims under the chiropractors or attending physician’s license. Many times a thorough investigation will reveal that many of the services were never rendered, this being confirmed by the victims of fraud. Treatment, other than at the emergency rooms, will be subject to proper referral by the hospital’s licensed physicians.
PIP fraud has been occurring for many years. The proposed bill might address some of these issues but does not completely resolve the issue of fraud related to PIP. The individuals arrested for committing insurance fraud are usually required to pay the money back and are put on probation for a few years and nothing else. Without stricter reforms and punishment, the fraud perpetrators will continue to find ways of submitting fraudulent claims in order to profit from PIP. If something is not done, insurance rates are going to keep increasing every year.