South Florida Hospital News
Tuesday September 29, 2020

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January 2016 - Volume 12 - Issue 7

Why Our Hospitals Are Bleeding PIP Auto Revenue

As a hospital collection attorney, I’ll just say it – our hospitals are often stuck with you – whether you can pay the bill or not; and even sometimes whether you intend to pay or not.

It’s the law and we follow it. Which means that in these tough economic times where expenses swell, reimbursements shrivel, regulations mount, claim processing delays relent, and duplicate record requests pile up on the old insurance company stonewall - emergency providers have to fight for every dollar on the proverbial table.
So Where Have Our Hospitals Been Bleeding Money?
For that one, sadly, the answer is - pretty much everywhere – but the most prominent (and avoidable loss) has been P.I.P. The numbers are measurable and the collection formula can be boiled down to one fairly neat sentence: since January 1, 2008, nearly all hospital bills processed by P.I.P./Auto Medical Payments Coverage have been cut by a flat 25% and many of these reductions were wrongly applied and can be collected by P.I.P. attorneys at no fee to the hospital. Under Florida law the insurer must pay penalties covering the hospital attorney’s expenses if the denial/reduction was wrong.
What Happened? How Did We Miss This Revenue?
The short answer is: hospitals believed the P.I.P. insurers who told them that the law allows them to process claims at 75% of the hospital’s usual and customary charge (instead of 100%) without checking what the policies actually said they’d cover. While the law gives insurers an option to cut 25%, very often their actual insurance contract promised full coverage (without the 25% reduction). This “slash and gash” continued for over 5 years until finally in July 2013 the Florida Supreme Court sided with the healthcare providers and now hospitals are dusting off old unpaid AR to the tune of tens (if not hundreds) of millions of dollars. Add to the mix that specialized PIP collection attorneys can do the hefty work of auditing this massive claims pool at no fee to the hospitals and we can see why some PIP insurers are pumping millions of dollars into making yet another “PIP fix” a high legislative priority.
What Does This Means for Hospitals
Consider the astonishing dollars. For a typical 800 bed Florida hospital the 25% reduction figure translates to an average of $1.5 to $2.5 million dollars at issue! Multiply that by the nearly 200 hospitals in Florida and the dollars at stake from this colossal insurance industry blunder start to look astounding. And so does the insurance industry’s unrelenting appetite to once again “fix” P.I.P. at your expense.
What to Expect Next?
Insurance industry lobbyists have already filed a bill for the coming legislative session proposing to “fix the fixes” they did to P.I.P. by adding even more “provider-unfriendly” provisions – namely eliminating or gutting the hospital’s ability to accept an assignment of a patient’s insurance benefits (meaning payments will go directly to your patient instead of you leaving you to pursue the patient directly for reimbursement) and wiping out penalties for insurers who fail to timely pay claims (even ones who do it as a business practice).
So How Can Hospitals Close the Wound?
One word: fight! Last time insurance lobbyists said “trust us on P.I.P. It’s not about the hospitals – the hospitals saw 5 years of 25% cuts to the tune of hundreds of millions of dollars.
Insurers are back again saying, “Let’s fix P.I.P. again. Don’t worry, hospitals – it won’t affect you. Trust us.”
I for one, as an attorney collecting your wrongful P.I.P. denials, have found millions of reasons not to trust them.

Russel Lazega is an attorney and author of several of Florida’s most widely distributed legal textbooks on Florida P.I.P. Insurance Law. Lazega represents hospitals, emergency physicians, and consumers at war with their insurance companies. He has offices in North Miami, Dania Beach, Tampa, Orlando and Tallahassee. He can be reached at

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