Florida Statute 627.736 Begins with ,"Required personal injury protection (PIP) benefits; exclusions; priority; claims.—" and goes on for several pages outlining rules, procedures and how traffic accident injury claims will be filed. It is not working as this law was first established to protect all licensed Florida drivers and its citizens. Now it is racked with fraud and costing insurance companies large sums of money which are being passed on to its policy holders. This law makes in mandatory to have PIP insurance and was enacted 40 years ago as a no-fault insurance coverage to expedite the reimbursement for medical costs resulting from an traffic accident. Generally, the insurance companies get blamed for the high cost of auto insurance in Florida.
This examiner recalls two incidents whenever auto insurance is mentioned. The first was a struggling barber working on a military installation who drove an old beat up VW who went into the auto insurance business and in a few years drove a new Mercedes and moved his family into a big new house. He was making a six figure salary selling auto insurance. The second incident occurred also on a military installation during a car pooling trip when the driver suddenly stopped to remove a tree branch from the road after a windy rain storm the night before. He was driving a convertible and shoved the branch through the top and put in an insurance claim which got him a nice new top no questions asked.
The first incident sort of illustrates that there is a lot of money in the insurance business and the second is how people view the insurance business as a place where you pay high rates and if you never have a claim, you are paying for other people’s claims so why not get a piece of the action.
Bad guys — organized ones — are behind much of the personal injury (PIP) fraud that forces up drivers’ insurance premiums, say two Hillsborough County undercover detectives, as reported in an Orlando newspaper recently.
"Myself and my partner, we’ve been investigating the PIP fraud for approximately two years now and in that time period we’ve arrested 123 people, closed down 11 clinics," Hillsborough County special investigator Ronnie Cooper said. "We’ve gained a lot of intel [intelligence] on how these organized crime groups work and how they perpetuate the fraud." The detectives testified before legislative committees in Tallahassee in early December 2011.
The clinics are the hub of PIP fraud, said Det. Cooper. It starts with an unscrupulous doctor who sells, or rents, the state-authorized exemption to open a clinic, so that it is not subject to state oversight by the Agency for Healthcare Administration.
Other people operate the clinic and the PIP fraud that involves faked injuries and treatments never given, the detectives say. When a real injured person comes in, that individual is turned away with an excuse, such as the doctor is unavailable.
The money comes in through phony billings and "it’s been documented through investigations of this money leaving the county, leaving the state of Florida, whether it be back to Cuba, Mexico, the Cayman Islands, Costa Rica," said Det. Cooper. "So it’s a lot bigger than what a lot of people understand, and the fact is that it’s not just a staged crash and it’s not just insurance fraud."
The issue of personal injury protection insurance fraud was back before legislative committees in the Florida Capitol in December 2011. Tom Flanigan reports lawmakers heard how organized crime is now responsible for much of the fraud.
Whether they support some tweaks to Florida's present no-fault auto insurance law, or want to ditch it completely and do something else, nearly everyone in Tallahassee seems to agree on one thing ..personal injury protection fraud is out of control in some parts of the state, specifically South Florida and the Tampa Bay area. The conventional wisdom is that most of this fraud is small-time stuff. Freelance scammers staging accidents to make a quick insurance buck. But then lawmakers heard from Ronnie Cooper. He's a special investigator with the Hillsborough County Sheriff's Office.
"Myself and my partner, we've been investigating the PIP fraud for approximately two years now and in that time period we've arrested 123 people, closed down eleven clinics and we've gained a lot of intel on how these organized crime groups work and how they perpetuate the fraud."
Cooper and his partner, Jose Morales, gave their real names because they use aliases when working undercover. We've altered their voices to protect that cover.
"In some instances, we've gone into the clinics. My partner has gone undercover in several clinics. That's one way. Another way is you use confidential sources to go into clinics and record information and what the crimes are that have taken place."
And it's the clinics, Detective Cooper says, that are the real key to how PIP insurance fraud works. That's because the clinics become the provider of medical services that actually bill and collect from the insurance companies. So Cooper says it starts with an unscrupulous doctor who sells, or rents, the state-authorized exemption to open a clinic which is not subject to state oversight by the Agency for Healthcare Administration "AHCA" for short.
"If you open up a clinic - the statute of a clinic - then you're regulated by AHCA. If you don't and you're a physician, then you can sit there and say you're 100 percent wholly owned, then you can use the exemption to open up that clinic and in our experience and through our investigations, every one that we've investigated has been with the exemption rule."
Cooper says the doctors in these cases have nothing to do with the clinics. In fact, Cooper's partner Detective Jose Morales has sometimes posed as a clinic patient.
"We go in. We get treated for the first time and the subsequent treatment forms are signed on a weekly basis without getting any treatment whatsoever."
And if there's any doubt a clinic is bogus, Morales says you need only watch to see what happens when a truly injured person happens to come in.
"They'll tell you that either they're full, the doctor's not seeing anybody today, come back some other time. They'll give you any kind of excuse not to see you because you're not part of the agenda that they're trying to follow in the clinic."
That agenda, the detectives say, is simply to bilk as much money as possible out of the insurance companies. Some of that money goes to those running the bogus clinic and the doctor renting them his clinic exemption. The guys who staged the accident and pose as patients get a cut, too. But Detective Cooper says the bulk of the cash is headed elsewhere.
The Florida grand jury concluded:
Fueled by the easy flow of insurance money, and enabled by greedy and disreputable lawyers, chiropractors and doctors, PIP fraud is taking a large bite out of every Floridian's insurance budget. The huge profits from this fraud allow runners to make a killing, as much as $20,000 a week to simply call names on police reports and have them come in to see a chiropractor or doctor. Inflated charges for worthless diagnostic tests line the pockets of unprincipled doctors. As a result all manner of shady characters are drawn to the sleazy trade of patient referrals, marginal medicine and worthless MRI brokering. Most of the time the accident victim is left with no coverage and little to show for time spent at the medical facility.
Complex problems require innovative solutions and constant attention. The Florida Legislature, the Department of Insurance, The Board of Chiropractic Medicine, The Florida Bar, the insurance industry, law enforcement, and prosecutors have provided both, in varying degrees. We are grateful that all representatives of the professional, commercial, and regulatory groups who appeared before us were forthright about the obstacles which have made even their best efforts ineffective in stemming the tide of this illegal and detrimental activity. By way of encouraging a fresh look at prevention and deterrence options, we urge consideration of the following recommendations, which we believe will close the gaps, tighten the reinforcements, and provide financial and professional disincentives to continued PIP fraud in Florida.
The entire Grand Jury report can be read at:
http://myfloridalegal.com/pages.nsf/Main/9ab243305303a0e085256cca005b8e2e
Florida has laws to prevent PIP fraud, but the professionals involved such as doctors and lawyers have found ways to circumvent these laws and line their own pockets with insurance money:
1. F. S. §817.234(8) (Solicitation) prohibits anyone from soliciting business for the purpose of filing a motor vehicle tort claim, or claims for PIP benefits. This statute was only recently amended to make it a third degree felony, punishable by up to five (5) years in prison.
2. F.S. §119.105 (Protection of Victims of Crimes or Accidents ) This statute is part of the public records law and while allowing access to anyone who wishes to view or to have a copy of police reports, it prohibits the use of such reports for a commercial purpose. Violation of this statute is punishable as a first degree misdemeanor, with up to one year in the county jail.
3. F. S. §817.505 (Patient Brokering Prohibited) makes it unlawful for anyone to pay anything, directly or indirectly to induce the referral of patients from a health care provider or facility, or to solicit any kind of payment directly or indirectly in return for referring a patient to a health care provider or facility. This statute is a third degree felony, punishable by up to five (5) years in prison.
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