Saying it will save Floridians money, Gov. Rick Scott on Friday signed into law a measure backers say will help the state combat fraud and lower costs in the no-fault automobile insurance market.
Scott met with law enforcement officials in Jacksonville and signed HB 119, which supporters say will help cut nearly $1 billion in higher costs by cracking down on fraud and more tightly regulating which providers can treat patients seeking care under the $10,000 medical benefit. The issue was one of Scott’s top legislative priorities.
“By helping reduce fraudulent auto accident claims, this legislation will benefit the pocketbooks of every Florida family who drives an automobile,” Scott said in a statement. “I am glad to do my part in keeping the cost of living low in Florida, and I will continue to work to find ways to do so.”
Scott’s action, which was expected, brought kudos from the business and insurance communities that have long called for reforms in automobile personal injury protection coverage, or PIP. The mandatory insurance was established in the 1970s to provide a level of care to injured motorist regardless of who is at fault.
David Hart, executive vice president of the Florida Chamber of Commerce, said the measure was vital “to combat this fraud that is costing business and drivers millions of dollars every year.”
By Oct.1, PIP insurers must submit a rate filing to the Office of Insurance Regulation with at least a 10 percent rate reduction, or document why they can’t. But insurance representatives say consumers may not see immediate premium benefits because many of the bill’s major changes won’t kick in until after carriers are required to file for new rates.
Chief Financial Officer Jeff Atwater, who set up a working group to explore changes to existing statutes, said the new law will help curb rising costs in a program that insurance regulators say has seen claims rise 66 percent between 2005 and 2010. The rise comes despite the fact that the number of drivers in Florida has remained relatively constant.
“With the signing of this bill today, Florida will release the chokehold that fraud has on Florida’s insurance consumers,” Atwater said.
Most of the law’s provisions kick in Jan. 1.
Among its major provisions, the law requires clinics treating PIP patients to be licensed, limits payment to chiropractors and prohibits massage therapists and acupuncturists from being reimbursed under the program. PIP claims must also be reported within 14 days of an accident.
“Meaningful PIP reform has eluded the Legislature for years, and plagued consumers and Florida businesses with millions in fraudulent claims,” said Tom Feeney, CEO of Associated Industries of Florida.
Following the 2012 session, some observers raised concerns over the language in HB 119, which apparently leaves an unintentional, six-month lapse in provider reimbursement authorization. Officials with the , however, said they have spoken to insurance companies and have no doubts that claims will be paid.