Changes to fraud-ridden PIP insurance system inch forward in legislative committees

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A plan to make changes to personal injury protection insurance inched forward Wednesday as committees in both the House and Senate took testimony but no votes on bills backers say are needed to lower costs in a fraud-riddled system, reports Michael Peltier of the News Service of Florida.

The Senate Banking and Insurance Committee and the House Subcommittee on Insurance and Banking both heard from affected parties in the fight over the no-fault coverage set up in the 1970s to pay medical claims for injured motorists.

Most of the testimony in both committees centered around attorneys’ fees and licensing of medical clinics that derive a substantial percentage of their business from PIP claims.

Backers want to cap attorney fees they say now encourage litigation in a system originally set up to avoid legal action.

“There must be some rational relationship between the amount in controversy and the amount of attorney fees awarded,” said William Large, president of the Florida Justice Reform Institute, which favors capping attorneys fees. Large pointed to cases in which attorneys fees dwarfed relatively small payouts.

Plaintiffs’ attorneys, however, argued the insurance companies have ample opportunity to avoid going to court. Further, they said the relationship between claims paid and attorney fees was largely irrelevant because insurance companies will take on a particular court battle instead of settling for a small amount to set precedent for thousands of additional claims.

“To an insurer, it’s not about fighting over a $100 bill,” said Mark Cornelius, an Orlando attorney who handles PIP cases. “It is about the million other cases that have similar charges.”

Physicians groups urged lawmakers to avoid requiring tougher licensing recommendations for physician-run clinics that handle a high percentage of PIP claims. Doctors already face hefty licensure requirements and lawmakers should focus their attention on fraudulent activities.

“To have physicians have to go and be licensed again is expensive and burdensome,” said Jeff Scott, general counsel for the Florida Medical Association.

The Senate bill is expected to be sponsored by Sen. Joe Negron, R-Stuart. The Senate committee concluded its public workshop on the matter, but chairman Sen. Garrett Richter, R-Naples, said that discussion and debate will continue after a bill is filed. The Hou

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.