Changes are brewing to the state’s personal injury protection (PIP) law that could have a damaging impact on Florida hospital finances. While anti-fraud laws that have been enacted by the Florida legislature and enforced by the Florida Department of Insurance should be commended, the PIP law changes now under consideration would have serious negative consequences.
Auto insurance companies frequently underpay or unlawfully decline PIP claims. However, the law now provides a path for hospitals and other medical providers and insured patients to recoup that loss. Currently, insurers are responsible for payment of legal fees incurred by hospitals, providers and patients when a claim is successfully resolved.
This session, the state Legislature will be considering PIP law changes, including dramatically capping legal fees. That step would make it impractical for law firms to represent hospitals, providers of health care services and patients in PIP claims, in effect denying access to the courts to resolve a claim regardless of its merits.
Under Florida’s “no fault” auto insurance law, PIP coverage is mandatory, with insurers paying up to $10,000 in medical expenses for injuries from motor vehicle accidents. Collectively, these individual PIP claims can account for significant hospital revenue. One recent five-year PIP audit at a South Palm Beach County hospital recovered more than $140,000 in revenue that insurers had underpaid or unlawfully declined.
That money can be put to good use in a hospital of any size and highlights why it’s important that there are no changes to PIP law that hinder hospitals’ ability to have legal counsel collect these payments.
Attorneys familiar with PIP claims say some insurance companies regularly deny claims or fail to pay the full amount – then challenge the provider to try to collect these payments in court. After fighting a claim and losing in court, the insurers often continue to contest the provider’s legal expenses.
While PIP insurers say that legal fees in these cases are too high, attorneys who represent hospitals say the real problem is that insurers will seize any opportunity to deny a claim, and litigate the case for months or even years. Here are a few examples attorneys point to as recent examples of how some insurers are treating providers’ PIP claims.
In one case, a man’s medical bills were denied because he was 10 minutes late to a hearing. He then had to stop treatment for his medical condition because none of his bills were being paid. A jury in the case ruled on behalf of the patient, but the insurer appealed that decision. To date, the providers have not received any payments.
Another patient’s claim was denied after the insurer insisted on a peer review of the case, but did not provide any of the applicable medical records to the reviewer.
In another PIP claim, which has involved numerous motions and hearings, but has yet to go to trial, the insurer set up an independent medical examination for the injured patient and suspended benefits after she did not appear. However, the patient did not receive the notice because she had been hospitalized for a severe medical condition.
Upon learning of the facts, the attorney attempted to settle the claim with the insurance company. However, the insurer is still denying the claim and it will take further legal action to attempt to collect the PIP payment.
For Florida hospitals, the stakes in the PIP debate are high. Hospitals are already missing out on significant dollars. Healthcare executives and PIP attorneys point out that a cap on legal fees would only put hospitals at further disadvantage. Without the accountability that comes from having to bear the full cost of unlawfully denying payment, there’s nothing to prevent an insurer from fighting and delaying these claims for years.
