Ensure Florida's new PIP law cuts car policy premiums

When Gov. Rick Scott signed legislation designed to reduce vehicle insurance fraud into law on Friday, he achieved one of his highest priorities for the 2012 Legislature.

In a state rife with staged accidents, phony injuries and unscrupulous health care providers, that massive fraud costs consumers in higher premiums. The new law is expected to generate $1 billion in savings.

At the same time, Rep. Jim Boyd accomplished a remarkable goal with his sponsorship of House reforms to personal injury protection. First-term lawmakers rarely take center stage on such signature laws.

As co-owner of Boyd Insurance & Investment Services, the Bradenton Republican provided his expertise in crafting the bill. His company writes more than $25 million in insurance premiums annually on a wide range of policies, including auto. He also stands to benefit from this law.

In signing Boyd's bill, the governor stated: "By helping reduce fraudulent auto-accident claims, this legislation will benefit the pocketbooks of every Florida family who drives an automobile. I am glad to do my part in keeping the cost of living low in Florida, and I will continue to work to find ways to do so."

The law guarantees no such outcome. The Legislature refused to adopt such a strict provision forcing companies to cut rates.

Auto insurers are only asked to reduce PIP premiums by 10 percent as of October, or else provide a written explanation detailing the reasons for the lack of price reductions. Companies are also expected to trim rates by 25 percent by 2014, or again offer an explanation.

Consumer organizations are rightly appalled at the prospect of losing out. Auto policy-holders can only wait and see if insurers honor those rate reduction benchmarks -- or take advantage of the loophole and pocket more profits. Scott and Boyd must hold the auto insurance industry accountable as these deadlines arrive.

Overall, the law provides some tough, well intended provisions. Accident victims must seek treatment within 14 days, and only those with emergency medical injuries qualify for the entire PIP benefit of $10,000. Others, primarily with soft tissue injuries, are only eligible for $2,500 in care.

Medical clinics face tighter licensing requirements, and health care providers found guilty of fraud face stiffer penalties, including the loss of their medical licenses for five years.

Along with the weak guideline on premium payback to consumers, there's another flaw in the law. Only a medical doctor, osteopathic physician, dentist and several others are allowed to determine whether a crash victim suffered an "emergency medical condition," and thus be eligible for the $10,000.

In a shameless solicitation, one Tampa company offered to dispatch one of the qualified health care providers to chiropractors' officers to approve patients for the most expensive care. "Don't miss out on your $7,500," the pitch goes.

Licensed medical professionals who take part in such a scheme should be scrutinized for potential fraud.

As the House leader on PIP reform, Boyd endured last-minute negotiations with the Senate as stubborn senators rejected some compromises. Scott, sharply critical of the Senate's version of the bill, lobbied hard for Boyd's version. Senators approved the bill on a close 22-17 vote with only minutes left in the session.

We consider this law a work in progress. As an insurance industry insider, Rep. Boyd is in an ideal position to gauge how the measure stands up to expectations, especially for consumers. We expect transparency and accountability as the law's provisions go into effect over the coming months.

In the meantime, Boyd deserves credit for a strong assault on PIP fraud.