Will The New PIP Law Drive Car Insurance Rates Down?
In one word: maybe...According to the Tampa Bay Times, HB119 (as the measure was known while it made its way from the legislature to the Governor's office) may initially have the opposite effect...
What Is The Purpose Of Personal Injury Protection (PIP)?
A bit of history first: Florida's legislature created PIP to make sure that people in this state at least had a $10,000.00 cushion to pay for the emergency treatment they may need after a motor vehicle accident. Because the majority of people in car accidents sustain minor injuries, PIP would theoretically help drivers involved in these accidents get back on their feet.
However, some unscrupulous chiropractors and providers of other medical services have made it a habit to plunder the $10,000.00 from PIP policies by frequently administering to accident victims treatments that are usually found to be unnecessary over the course of several visits. In essence, after an accident victim is "seen" at these providers' offices, there is no money left for the treatment they really need: MRIs, therapy, hospitalization, orthopedics, even surgery.
Given this situation, the legislature decided to revise the law and came up with the new rules contained in HB119.
Limitation on Benefits
The most important change intended by HB119 is to bar some providers of medical services (i.e., massage therapists and acupuncturists) from charging accident victims under PIP. Similarly, the new rules limit the access that other providers (i.e., chiropractors and physical therapists) have to PIP funds. Under the HB119, chiropractors and physical therapists will only be able to charge for $2,500.00 of the $10,000.00 available under each PIP policy. However, this limitation is removed if a doctor, a dentist, a physician's assistant or a nurse practitioner determines that the patient has a medical emergency. This provision is prompting a Tampa based company to offer the services of doctors and even osteopathic physicians to chiropractors' offices. These medical professionals can be "hired" just to prepare the paperwork required for declaring the emergency medical conditions necessary to gain access to the rest of the funds...
No Definition Of Medical Emergency
Moreover, both proponents and opponents have already identified another legal "loophole" that may tie up the courts for some time: HB119 fails to define what constitutes a medical emergency. Some fear that this omission may prompt insurance companies to simply deny coverage by naming most injuries non-medical emergencies. If that happens, it will likely prompt much more litigation and end up clogging the courts.
So, Will It Drive Insurance Rates Down?
Under HB119, insurance companies are required to reduce personal injury protection premiums at least 10 percent by October 1st of this year and 25 percent by the year 2014. Theoretically, the less money insurance companies have to pay out under PIP policies (by not allowing chiropractors to exhaust the $10,000.00), the fewer premiums they should charge for these policies. However, as mentioned before, it remains to be seen whether any money will be saved under the new rules. In fact, if more litigation ensues as a result of the omissions discussed above, premiums may go up, not down...
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