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PIP insurance fraud explained

PIP Rally

Florida is one of the most expensive states for car insurance, according to the Insurance Information Institute. A fender bender can cost an insurance company tens of thousands of dollars.

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Walt Dartland was targeted in a staged accident years ago in Miami, but he knew immediately what was up. Dartland is a former Florida D deputy Attorney General and is now executive director of the Consumer Federation of the Southeast.  “All of a sudden they just plain stopped," said Dartland, "and because I was going so slow, I basically hardly touched them. They immediately got out of the car, and I tried to tell them we better call the police department and get a report on this. They said no. They pulled the car across the highway and walked right into a chiropractor’s office.”

The way this works is a clinic owner will recruit a group of people to stage a minor accident. No one is actually hurt, but the passengers go straight to the clinic. No treatment is given, and claims of $10,000 per person are filed under the driver’s PIP coverage. The money is split between the passengers, clinic operators, and lawyers.

Florida’s No-Fault Law was supposed to cover economic losses and medical treatment for crash victims without the need for a lawsuit to establish who’s to blame. But in the last five years, the state has seen a 275 percent increase in PIP related lawsuits.

Gov. Rick Scott calls PIP fraud a billion dollar tax on Florida’s citizens. He told a crowd gathered for a PIP rally at the Capitol, "You are sick and tired of a billion dollars a year in fraud. You’re tired of it. You’re tired of scammers taking advantage of you.”

Cydnee Knoth lives in Tampa and came to Tallahassee to complain about her premiums. “PIP is the biggest thing I pay for on my insurance, more than liability," said Knoth. "I carry $100,000 worth of liability and that is cheaper than carrying $10,000 of personal injury.”

Tampa and Miami are among the top 10 most expensive cities for car insurance because of staged accidents.  Chief Financial Officer Jeff Atwater says moving to one of those cities can increase your monthly insurance payment 50 to 100 dollars. He said, “The average family in Miami-Dade County with a teenage driver is now paying over $3200 a year for the value of coverage that is only worth $10,000.”

Atwater said Florida lawmakers mandated no-fault coverage and they are the ones who must fix it. But he doesn’t want PIP to go away. “I would say there is value in a no-fault system, that someone can get quick care and coverage when they have access to no other healthcare," said Atwater. "For us in Miami- Dade, there is well over 25% of our population that has no other healthcare other than what’s offered in PIP.”

The Florida House and Senate have two competing bills for PIP reform. Atwater likes the House version. So does the governor as welll as the business and insurance industries. The bill requires accident victims to seek treatment at a hospital, not a clinic, within 72 hours. It also puts a cap on attorneys’ fees. The bill has passed one committee so far.

The Senate version is supported by attorneys, chiropractors and some consumer groups. It requires police to use long form reports at accident scenes. It provides for more regulation of clinics and creates a fraud task force. It has not been taken up by any committees.

Both versions would force insurance companies to eventually lower their rates. Changes in the bills are expected, but Atwater thinks some kind of reform will pass. "I believe there’s one last good fight in us and I believe it’s this year,” he said.

Gina Jordan, WLRN-Miami Herald News

Comments

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Tea Tards

If the governor is backing this reform bill, then you can be sure it's WORSE than what's in place now and that a small handful of his cronies will make a fortune at your expense.

Jonathan Swift

Is this really true? Does anybody have a link to an objective news source? Frankly, it sounds like more propaganda from the insurance industry.

Irike Bribes

Wow this blog is quite a load of garbage. The fact is there isn't a Billion dollars a year in fraud, not even close. The House bill that passed sub potentially will flood ERs with people, god forbid your really having a emergency. The ER physician is too busy with minor fender benders. On top of that the insurance companies aren't even required to reduce premiums instantly, or even down the road. Consumers won't save money, and the public is now more at risk in the grand scheme of things.

Ehud Avni

I've been a victim of swoop & squat as it is known. The reason it's an issue is the lack of desire by the police or the insurance companies to make an effort of any kind to stop it. The police want to write a ticket & get on with it, the insurance company employees don't want to do their jobs, & the cities are afraid of lawsuits. I was purposely cut off in heavy traffic while the driver locked up the brakes causing me to hit him. The 3 passengers bail out & tell the police they just happened to be sitting there when it all happened & didn't know the driver. I explained that they were lying & their fingerprints would be found inside the car. The cop said don't tell me how to do my job, three witnesses, you lose, here's the ticket. This was even after a fire rescue worker who had been observing the whole thing told him he watched someone in the large crowd of Haitians, that came out of nowhere, tell the driver to lay on the ground & fake injury, & it was a scam. The cop wasn't interested in making any kind of effort, & the driver was grinning at the 3 of us as they loaded him in to the ambulance. I beat the ticket in court, not hard to do when the witnesses give false ID & addresses, & the insurance company still paid out $10,000 in PIP because they were "tired of the harassing calls demanding payment" from the scammers. They also paid for a total out on the car, the cop said there was $500 in damage, & somehow it jumps thousands of dollars? They weren't even interested in finding out if the driver was legally insured to drive that car. Then they dropped me because they handed over close to $20,000 to a scam. Oh, I couldn't get a signed statement from the fire rescue worker because his lieutenant was afraid the city would be sued by the scammers. I'm still pissed off about this to this day. This will continue to go on, we will all pay more, because it's just too easy for them to get away with it.

Michael Wind

these accidents are being staged daily with the supervision of organized crime and corrupt local police.

Vince Green

One of the "reform" provisions is to require people in accidents to go to the ER for treatment, or PIP won't apply. Sure, this will stop clinic frauds, but at the cost of requiring people to go (and insurers to pay for) the most expensive form of medical care possible. It's like, to prevent accidents caused by beaters, requiring everyone to purchase a Lexus.

Dan Melmed

The Senate bill wouldn't be as horrible as the House bill except as an underhanded favor to the insurance industry it tries to exclude ALL services provided my Licensed Massage Therapists, even though their services are essential for treating conditions like whiplash, muscle strains, etc. Very shady inserted language and extremely unfair for these 15,000+ licensed professionals.

Jim

Lower Premiums? Doubt it...

Mark Ferrara

Florida is the most PROFITABLE state for Auto Insurers. They take money from their insured on a continuing basis and either refuse to pay or significantly delay payment to providers. Ask your car insurance agent how much the cost of your claim gets shifted to or recovered from your regular health insurance policy vs what they (your Auto policy) actually pay out. Keep in mind that even though you pay for $10,000 in coverage, they will only pay out $8000 because of your 20% deductible. Why is it that even though you have to fully pay for that same $10K PIP coverage on each vehicle that you own, (in other words if you own 3 vehicles, you pay that PIP premium 3 times) but you still only get the one $10K worth of coverage? Where is the fraud more prevalent?

Saul Acosta

Here is the BEST most LOGICAL and SIMPLEST answer to the PIP issue in Florida. Please read on and do not discard. Afterwards, I will leave my email for anyone to contact me if you are genuinely serious and wishes to have an educated non confrontational argument over the matter. First and foremost, my opinion is for the benefit of the consumer,not for the FILTHY and CORRUPT POLITICIANS nor for the Folks out there that are involved in the health care industry and engage in defrauding the Insurance companies. This solution/recommendation as of today 01-30-2012 has been COMPLETELY IGNORED by all politicians we have contacted and surprisingly "NOBODY" from any of the "ANTI PIP" rallies or group meetings i have attended have not even mention anything about it. Here is the first step in arriving at the solution. Has anyone consider the possibility as remotely and absurd as it may seem that maybe the INSURANCE COMPANIES are lying and inflating these dollar figures resulting from PIP fraud so they can continue hiking their rates? Lets see lets do a simple math,.. Most Fraudulent clinics that are engage in staging accident do the following;
1. Buy an auto policy for the person who is to become their patient in 6 months.Lets says the policy costs the scum clinic owner $300 per month. A figure that is really,really low and the person with the new obtained policy must wait at least 6 months before staging the accident. So $300X6=$1800.This is money for the insurance pocket. Now after 6 months the accident is "staged" and the policy holder makes a claim. The Deductible on the policy $1000(minimum). The driver goes to a clinic and receives what amounts to $10K in the medical treatments. How much of the actual $10K does the insurance pay? lets do math again. $10K minus 80% and minus the Deductible will roughly equal to about $8K in monies that the clinic is expecting to get paid from the insurance. Is this the amount they pay? NOOOOOO.Most insurance offer a payment proposal of typically half the amount. So the $8K is now approx $5K after deducting the $1800 and $1000 from the previous payments the $5k-$2800=$2200. This figure of $2200 per "FRAUDULENT CLAIM" is likely the most realistic figure that I can come up with. Now lets multiply this by the number of fraudulent claims each year and i am sure that the figure would be allot less than the BILLION DOLLAR FIGURE claimed by the Insurance companies and Politicians. What I suggest as a Citizen and concerned consumer is that an independent party not affiliated with anyone other than the consumer perform a FORENSIC DETAIL ACCOUNTING of the figures claimed by the insurance companies as fraud claims. If the results are factual then we move to the SOLUTION and if the results are exaggerated by the insurance companies then we ought to CHARGE them CRIMINALLY for lying to the consumer and hence committing insurance fraud.

The Solution. Get every AHCA clinic in the State of Florida to have a THUMB PRINT SCANNER SOFTWARE at the facility. The patient most render a THUMB PRINT at the beginning of therapy and at the END OF THERAPY along with a digital photo. The same most be done by the THERAPIST who administers the therapies.He/She most render a thumb print at the beginning and END of each patient worked upon. The scanner and thumb print software must be paid by the clinic wishing to bill for such services. NOT BY THE STATE. This will not 100% put an end to PIP FRAUD but when a person willing to engage in staging accidents realizes that He/She needs to visit a particular Health Care Clinic a minimum of 28-30 times to justify billing for the maximum policy amount this would make it very unpleasant and for the "Fraudulent patient to account for the typical $2000 clinics pay their patients. Again this will not put a stop to the Insurance Fraud but it would make it less likely for folks to participate in such a crime. Conservatively this will diminish Insurance Fraud at least 50%. Next step is to make all those facilities in Florida categorized as EXEMPT CLINICS to either shut down or to get an AHCA certificate to operate. This is a solution that we presented in writing and verbally to all the involved agencies and to numerous politicians yet no one has even call us or written back to us. This is the simplest,least expensive and most convenient way to resolve this problem. We are a Medical Staffing company based in Miami we cater to hundreds of medical facilities in the state of Florida and we would love nothing more that to see a genuine solution to this problem. We have an attorney full time on staff every day ensuring that our Doctors and our clients are doing things ethically,morally and with full honesty. The problem with this issue is more political than in the interest of the consumer. I challenge anyone to have a genuine email dialog with me to find a more effective solution. Lastly, Please ensure that NO POLITICIAN profits from any legislation proposed in this matter.Email comments to kaizenmedical@gmail.com

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