Present Status and Florida’s Personal Injury Protection (PIP) Statute (Anniversary Issue Litigation Quarterly March 2008)

Over the past several months, Florida’s Personal Injury Protection (PIP) law has undergone some significant changes. First, effective October 1, 2007, the “old” version of the PIP law was allowed to sunset. During the sunset period, Florida’s Legislature passed and the Governor signed a new PIP law. This law took effect on January 1, 2008. As a result, some currently pending PIP claims may be subject to the old law, the new law, or the time period from October 1, 2007 through January 1, 2008 when Florida had no mandatory PIP. This article explores the changes in the PIP law ad how they may affect the handling and evaluation of claims.

As aforementioned, On October 11, 2007, Governor Charlie Crist signed the proposed No-fault bill into law effective January 1, 2008. PIP will continue to pay 80% of medical expenses up to $10,000.00, but the benefits are limited to services and care provided, lawfully supervised, ordered, or prescribed by: medical doctor, osteopath, physician, allopathic, physician, dentist or provided by hospital or ambulatory surgical center; emergency transportation and treatment by an ambulance or emergency medical technician; chiropractic physician; entities wholly owned M.D,  osteopathic physician, allopathic physician, chiropractors, dentists, or such practitioners and their spouse, parent, child or sibling; entities wholly owned by a hospital or hospitals; and, licensed health care clinics that are accredited by a specified accrediting organization or the health care clinic has a medical director that is a Florida licensed physician, osteopath or chiropractor, has either been continuously licensed for more than 3 years or is a publicly traded corporation and provides at least four of the following medical specialties: general medicine, radiography, orthopedic medicine, physical medicine, physical therapy, physical rehabilitation, prescribing or dispending medication and laboratory services.

Additionally, the new PIP law has medical fee schedules that allow insurers to limit reimbursement to 80% of the following schedule of maximum charges:

Ø  Emergency transport and treatment (ambulance, emergency medical technicians), 200% of Medicare;

Ø  Emergency services and care provided by a hospital, 75% of the hospital’s usual and customary charge;

Ø  Emergency services and care and related hospital inpatient services rendered by a physician, the usual and customary charges in the community;

Ø  Hospital inpatient and outpatient services, 200% of Medicare Part A;

Ø  All other medical services, 200% of Medicare Part B;

Ø  If medical care is not reimbursable under Medicare, the insurer may limit reimbursement to 80% of the workers’ compensation fee schedule; and,

Ø  If the medical care is not reimbursable under either Medicare or workers compensation, the insurer is not required to pay.

The following subparagraphs, (b)f.2 through (b)f.5, (commonly referred to as the Consumer Price Index section) has been eliminated from the new PIP statute:

2.??Charges for medically necessary cephalic thermo_grams,  peripheral thermograms, spinal ultrasounds, extremity ultrasounds, video fluoroscopy, and surface electromyography shall not exceed the maximum reimbursement allowance for such procedures as set forth in the applicable fee schedule or other payment methodology established pursuant to s. 440.13.

3.??Allowable amounts that may be charged to a personal injury protection insurance insurer and insured for medically necessary nerve conduction testing when done in conjunction with a needle electromyography procedure and both are performed and billed solely by a physician licensed under chapter 458, chapter 459, chapter 460, or chapter 461 who is also certified by the American Board of Electrodiagnostic Medicine or by a board recognized by the American Board of Medical Specialties or the American Osteopathic Association or who holds diplomate status with the American Chiropractic Neurology Board or its predecessors shall not exceed 200 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually on August 1 to reflect the prior calendar year’s changes in the annual Medical Care Item of the Consumer Price Index for All Urban Consumers in the South Region as determined by the Bureau of Labor Statistics of the United States Department of Labor.

4.??Allowable amounts that may be charged to a personal injury protection insurance insurer and insured for medically necessary nerve conduction testing that does not meet the requirements of subparagraph 3. shall not exceed the applicable fee schedule or other payment methodology established pursuant to s. 440.13.

5.??Allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services shall not exceed 175 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually on August 1 to reflect the prior calendar year’s changes in the annual Medical Care Item of the Consumer Price Index for All Urban Consumers in the South Region as determined by the Bureau of Labor Statistics of the United States Department of Labor for the 12-month period ending June 30 of that year, except that allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services provided in facilities accredited by the Accreditation Association for Ambulatory Health Care, the American College of Radiology, or the Joint Commission on Accreditation of Healthcare Organizations shall not exceed 200 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually on August 1 to reflect the prior calendar year’s changes in the annual Medical Care Item of the Consumer Price Index for All Urban Consumers in the South Region as determined by the Bureau of Labor Statistics of the United States Department of Labor for the 12-month period ending June 30 of that year. This paragraph does not apply to charges for magnetic resonance imaging services and nerve conduction testing for inpatients and emergency services and care as defined in chapter 395 rendered by facilities licensed under chapter 395.

The PIP fee schedule referenced above would apply instead.

If the PIP insurer receives notice of an accident, the insurer must reserve $5,000.00 of PIP benefits for payment to physicians or dentists rendering emergency care or inpatient care in the hospital for 30 days. After the 30 day period, the unclaimed amount of the reserve may be used to pay claims from other providers. The required time to pay claims to other providers is tolled for the time period the insurer is required to hold such claims due to this requirement.

The important remaining highlights are:

Ø  All PIP claims against an insurer related to the same health care provider for the same injured person must be brought together in a single lawsuit, unless good cause is shown why such claims should be brought separately;

Ø  Increases 15 day demand requirement to 30 days before a provider can file suit;

Ø  The Death benefit is modified to $5,000 or the remainder of the PIP benefits, whichever is less; and,

Ø  Makes it an unfair trade practice for an insurer to refuse to pay valid claims as a general business practice, and allows the Attorney General to investigate and initiate actions, in addition to the Office of Insurance Regulation.

With these changes, Florida has shifted from a No-Fault system to a fault- based or tort system, whereby the at fault driver is responsible for paying the claimant’s medical expenses and compensating for additional damages, such as loss of wages and “pain and suffering.” In addition, claimants are no longer required to have suffered a threshold “permanent” injury in order to recover non-economic damages, such as pain and suffering and mental anguish. Again, dependent upon individual contracts of insurance, No-Fault coverage may or may not be a “collateral source” and may be subrogable.

Naturally, Florida’s courts have not had the opportunity to interpret the changes in Florida’s PIP statute. Therefore, it is imperative that appellate decisions be closely monitored to see how the courts are treating these important issues. We will keep you informed of any new developments, legislative or otherwise, on Florida’s PIP law.