Florida Lawmakers Tackle Tort Reform

In the state of Florida, tort reform and insurance fraud are two targets that lawmakers are looking to change in an effort to tackle the state’s no fault law.  The House Insurance and Banking Subcommittee have approved a bill that seeks to rein-in medical and litigation costs.

Under the state’s no fault law, drivers must carry at least $10,000 in personal injury protection and insurers are required to pay 80 percent of PIP claims, regardless of which driver is at fault. The law was created to ensure that drivers have some coverage and eliminate the need to litigate small claims. Insurers, however, say the mandatory coverage has become a feeding trough for unscrupulous medical providers, fraudulent lawyers and organized crime rings.

Lawmakers have tried repeatedly to reform the system and no-fault insurance was nearly abolished in 2006 and 2007 but overall any type of reform has been met with mixed results.  Insurers are beginning to think that this year, with the support of Chief Financial Officer Jeff Atwater and a sympathetic governor, Rick Scott, might be their best chance at comprehensive reform in decades.

The House Subcommittee approved a bill (CSHB967) that follows the recommendations made last month by Property Casualty Insurers Association, the Florida Chamber of Commerce and the Associated Industries of Florida. The bill focuses on medical costs and litigation expenses, with the goal of containing those costs through the use of fee schedules and other means.

Arbitration would become the prime method of resolving PIP claims under the proposed measure.  Florida’s circuit courts would have sole jurisdiction over unresolved arbitrations. Attorneys’ fees in no-fault law cases would be capped at $10,000 or three times the disputed amount, whichever is the lesser.

The bill would also set PIP medical reimbursements to rates used by Medicare and allows insurers to use a schedule of maximum charges for medical equipment, care and services rendered by clinical laboratories. It would limit the services performed in ambulatory surgical centers to 80 percent of the state’s workers’ compensation fee schedule.  William Stander, assistant vice president for PCI, said the bill shows lawmakers are serious about implementing lasting reforms. “The committee’s action shows the legislature has recognized the urgent need for PIP reform in our state,” he said.