• Important Changes to Florida's PIP Law
  • November 30, 2012 | Author: Michael S. Walsh
  • Law Firm: Kubicki Draper - Fort Lauderdale Office
  • The 2012 legislative session brought with it many significant changes to Florida’s personal injury protection (PIP) law, which will impact how claims are reviewed, analyzed and defended. The goal of this article will be to provide an overview of some of the key amendments from the defense perspective. If the history of Florida’s PIP law is any indication of what is to come, it will likely be a mix of good, bad, and "who knows." While the impact of the recent amendments cannot be predicted with certainty, this article will aim to provide some insight into the likely impacts of the changes. Of course, because the new session law amends, enacts, or otherwise impacts more than 10 different statutes, and because the changes have different effective dates, the session law itself should be consulted for further guidance and details. See Ch. 2012-197, §§ 1-18, Laws of Fla. (House Bill 119).1

    One note of importance at the outset is that most of the amendments to the No Fault statutes will apply regardless of whether they are expressly incorporated in the particular policy form and, thus, for the most part, insurers will not need to amend their policy form before the effective date of the statutory amendments. See Ch. 2012-197, §8 Laws of Fla. (creating §627.7311, Fla. Stat., effective 7/1/12, providing that §§627.730-627.7405, Fla. Stat., control regardless of their inclusion in an insurance policy form). A significant exception appears to be the portion of Ch. 2012-197, §10, Laws of Fla., amending §627.736(5)(a)5., Fla. Stat., discussed herein below.

    Fraud Prevention Measures

    Presently, five of the top ten cities for automobile fraud are in Florida. Statistics aside, those who handle PIP know fraud runs rampant. Not surprisingly, a number of the new statutory changes address this major issue directly. Some of the amendments designed to combat the problem of fraud include the following:

    1. The amendments broaden the circumstances in which long-form Florida Traffic Crash Reports ("FTCR") are required. For example, a long-form will be required any time an accident results in death, personal injury to, or any indication of complaints of pain or discomfort by, any of the parties or passengers involved in the crash. Additionally, both the long and short form crash reports must include detailed information, including a list of all passengers in the vehicles involved. See Ch. 2012-197, §1 Laws of Fla. (amending §316.066, Fla. Stat., effective 7/1/12). These changes will assist insurance companies in determining who truly complained of discomfort or pain following an accident and will help root out fraudulent PIP claims.

    2. A healthcare provider filing a PIP claim knowing the assignee intentionally submitted a fraudulent healthcare clinic application or document commits fraud. The amended statute further provides that a licensed healthcare provider found guilty of PIP fraud loses its license for five years and may not receive PIP reimbursement for ten years. See Ch. 2012-197, §13, Laws of Fla. (amending §817.234, Fla. Stat., effective 7/1/12). Although fraud will continue in Florida, this harsh sanction should assist in the reduction of fraud by physicians, although to what extent is unknown. These penalties will also help deter physicians from merely opening up a new clinic under a different name.

    3. If an insurer has reasonable belief a fraudulent insurance act has been committed, they must:

    • Notify the claimant in writting within 30 days after submission of the claim that the claim is being investigated for suspected fraud;
    • The insurer has 60-day period after the 30days to investigate;
    • The claim must then be denied within 90 days after submission of the claim;
    • All claims denied for suspected fraud must be reported to the Division of Insurance Fraud.

    See Ch. 2012-197, §10, Laws of Fla. (amending/creating §627.736(4)(I), Fla. Stat., effective 1/1/13). This amendment combats fraud by giving insurers significantly more time to investigate, which was previously only 30 days.

    In addition, although not a new change, it should be noted that when fraud is found by the court or admitted by the claimant, the insurer can recover benefits paid before discovery of the fraud in their entirety from the person who committed the fraud. In addition, the prevailing party is entitled to recover its costs and attorney’s fees in any action to enforce its right of recovery for benefits paid as a result of fraud. See §627.736(4)(h), Fla. Stat.

    Return of the Examination Under Oath

    The Florida Supreme Court’s decision in Custer v. United Automobile Insurance Company, 62 So. 3d 1086 (Fla. 2010), is infamously known as the case which practically eliminated an insurer’s right to conduct an examination under oath ("EUO"), or at least its right to deny a PIP claim for failure to attend an EUO. Resolving the issue, the Legislature expressly preserves the insurer’s right to conduct an EUO of an insured, including an omnibus insured. Most importantly, the insured or omnibus insured must comply with the terms of the policy and compliance with this portion of the statute is a condition precedent to receiving benefits. See Ch. 2012-197, §10, Laws of Fla. (amending/creating §627.736(6)(g), Fla. Stat., effective 1/1/13).

    The amended statute arms carriers with the ability to deny a claim for the failure to attend a duly scheduled and noticed EUO. However, the statute restricts the scope of the questioning during the EUO to "relevant information or information that could reasonably be expected to lead to relevant information." See id. As a result, the carrier must be careful as to the type of questions asked in the examination to avoid sanctions. Lastly, the amended statute expressly states the insured cannot make it a general business practice to request EUOs without a reasonable basis. Consequently, it is highly recommended that insurers have a legitimate reason for conducting the EUO, as deponents will certainly be asked such questions in deposition by the plaintiff’s counsel.

    Independent Medical Examinations

    There is one significant change to the provision governing independent medical examinations ("IME"). Whereas, previously, the insurer bore the burden to prove the unreasonableness of a claimant’s failure to appear at an IME, the amendments create a rebuttable presumption in favor of the insurer that an insured’s refusal to submit to, or failure to attend, two examinations is unreasonable. See Ch. 2012-197, §10, Laws of Fla. (amending §627.736(7)(b), Fla. Stat., effective 1/1/13).

    This change will be of great benefit to the defense. An insured’s failure to attend two properly scheduled and noticed IMEs, will create a rebuttable presumption that the insured’s refusal or failure to attend was unreasonable. Once this rebuttable presumption arises, it will be the claimant/plaintiff’s burden to prove the failure to attend was reasonable. Since many claimants are difficult to locate after treatment, this will place the obligation (after two no-shows) on plaintiff’s counsel to track down the claimant and prove reasonableness of the failure to attend.

    By way of caution, however, in order for the presumption of unreasonableness to arise, the insurer must properly schedule and give notice of the two IMEs, and the insured must fail to attend both. Insurers should also be certain they send notices of the examination to all known addresses of the insured/claimant and their counsel, if represented, to prevent plaintiffs from asserting the notices were sent to the wrong address.

    PIP Schedule of Maximum Charges

    Medical providers are required to charge only a reasonable amount for services rendered to an injured person. Much of the PIP litigation over the past few years has dealt with the reasonableness of the charge for the services and treatment billed to the insurer by the provider. Florida’s No-Fault Law sets forth schedules of maximum reimbursement, each of which applies to specified care and services. Medical services and care not included in a specific schedule are generally reimbursed at 80% of 200% of the physicians schedule of Medicare Part B.

    However, it appears that, effective July 1, 2012, insurers desiring to utilize the PIP schedule of maximum charges must amend their policy forms to include the schedule. Curiously, the amendments to the larger statute containing this subdivision are not effective until January 1, 2013, which raises substantial questions regarding the meaning, scope, and true effective date of this amended subdivision. See Ch. 2012-197, §10, Laws of Fla. (amending §627.736(5), Fla. Stat., effective 1/1/13, but amending §627.736(5)(a)5., effective 7/1/12); see also Fla. H.R. Economic Affairs Comm., HB 119 (2012), Staff Analysis at 4, 10-11 (final May 7, 2012) (available at http://www.flsenate.gov) ("Effective July 1, 2012, insurers that want to utilize the PIP schedule of maximum charges must amend their forms to include the schedule.").

    What Care and Treatment is Reimbursable

    One of the most significant changes to the new PIP statute is the limitation of what care and treatment is reimbursable and who can provide the care. Firstly, the insured/claimant must seek treatment within 14 days after the accident. Otherwise, no care or treatment is reimbursable. If the insured/claimant does seek treatment within 14 days after the accident, the initial services and care may only be provided, supervised or ordered by a licensed MD, dentist, chiropractor, a hospital or facility that is a wholly-owned hospital or a person or entity licensed under Chapter 401 providing emergency transportation and treatment. See Ch. 2012-197, §10, Laws of Fla. (amending §627.736(1), Fla. Stat., effective 1/1/13).

    The amended statute provides that, after the initial care, follow up care may be provided, supervised or ordered by an MD, chiropractor, dentist, physician’s assistant, advanced registered nurse practitioner, a hospital, ambulatory surgical center or an entity wholly owned by one or more physicians. It is worth noting that a physical therapist is allowed to provide such treatment if the referral is made by a provider under this paragraph. See id.

    If the insured treats within the 14 days, with the appropriate physicians providing the initial treatment, then there are two levels of entitlement to PIP medical benefits:

    1. Benefits will be limited to $2,500.00 for treatment if there is no finding of an emergency medical condition.

    2. Benefits will be extended to the full amount of $10,000.00 if there is a finding of an emergency medical condition.

    See id.

    These caps obviously raise the question, "What is an emergency medical condition?" Although there will doubtless be substantial litigation over this question, the Legislature has, in amending a different statute, provided a general definition as follows: "[A] medical condition manifesting itself by acute symptoms of sufficient severity, which may include severe pain, such that the absence of immediate medical attention could reasonably be expected to result in any of the following: (a) Serious jeopardy to patient health. (b) Serious impairment to bodily functions. (c) Serious dysfunction of any bodily organ or part." See Ch. 2012-197, §9, Laws of Fla. (creating §627.732(16), Fla. Stat., effective 1/1/13).

    A chiropractor cannot make the finding of an emergency medical condition. Such a finding must be made by a licensed MD, dentist, physician’s assistant or advanced registered nurse practitioner. See Ch. 2012-197, §10, Laws of Fla. (amending §627.736(1), Fla. Stat., effective 1/1/13). It seems likely that some chiropractic clinics may start retaining at least one of these types of professionals for sole the purpose of evaluating emergency medical conditions, in an effort to obtain the full $10,000.00 in PIP benefits. It also seems likely that most insureds will be declared to have suffered an emergency medical condition by the initial treatment provider within 14 days of the accident.

    Uncertainty looms as to how courts will interpret the vague definition of "emergency medical condition," such as what "serious jeopardy to a patient’s health" actually means or what constitutes a "serious impairment to bodily functions." It is also uncertain when the finding of an emergency medical condition must be made, as the amended statute appears to be silent on this issue. The statute does not appear implement any limitations of when such a finding can be made but seems to just say there needs to be a finding of same. This, too, is likely to occasion substantial controversy and litigation.


    As noted throughout this article, there is no way to predict exactly how the recent statutory amendments to Florida’s PIP law will impact insurers or the defense of PIP claims. If the history of prior PIP amendments is any indication, the one thing that is certain is that there will be substantial litigation over the meaning of the new changes. Only time will tell the full impact of the amendments, as insurers and plaintiffs alike challenge the scope and meaning of the amendments and courts rule on those challenges in particular cases.

    1The Florida Senate website is a great resource for accessing new bills, bill summaries, session laws, legislative history and other materials, both for the Senate and House. See http://www.flsenate.gov.