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March 21, 2012

This Law Alert is to advise you of changes to the Florida Motor Vehicle No-Fault Law and other statutory changes established through House Bill 119. The Florida Senate approved a Final Amended version of House Bill 119 on March 9, 2012 that will become effective upon the signature of the Governor. This Law Alert summarizes amendments to 627.736(1) and (4) - (11) and the effect of §627.7311 on PIP Policies. We hope this Law Alert is informative and useful to your claims handling.

Amendments to 627.736(1) and (4) - (11)

  • Initial Services: The new PIP statute requires coverage for 80% of all reasonable expenses for treatment related to a motor vehicle accident if and only if the individual receives initial services and care within 14 days of the crash. Initial services may be provided by doctors licensed under chapter 458 or 459, as well as chiropractors licensed under 460. Follow up services are only compensable upon referral by a provider and must be consistent with the underlying medical diagnosis. Physical therapists may provide the follow up services upon proper referral, but massage or acupuncture (compensable under the current statutory scheme) are not reimbursable.

  • Emergency Care Coverage: Beginning January 1, 2013, “Emergency Medical Condition” shall be defined as a medical condition manifesting itself by acute symptoms severe enough that, without immediate medical attention, it could result in jeopardy to the patient’s health, impairment to bodily functions, or dysfunction of any bodily organ or part. If a physician licensed under 458 or 459, dentist, physician assistant, ARNP determines that the injured person had an emergency medical condition, then care for such services is capped at $10,000.00 However, reimbursement is limited to $2,500.00 if any authorized provider determines that the injured person did not have an emergency medical condition.

  • Failure to Appear at Examination: Perhaps the second most important amendment to the PIP statute is in subsection (7), which now applies if a person unreasonably refuses "or fails to appear at an examination". Even more importantly, "an insured's refusal to submit to or failure to appear at two examinations raises a rebuttable presumption that the insured's refusal or failure was unreasonable". Thus, it will be imperative to make sure your IME requests are sent properly to all possible addresses for the claimant to document receipt of the notices meticulously.

  • Participating Physicians Fee Schedule: The legislature did not change the "permissive" language set forth in (5), but it did attempt to clarify what constitutes the "participating physicians fee schedule". The applicable fee schedule is that which is in effect on March 1 of the year in which the treatment/services are provided, and it remains in effect for the rest of that year even if the schedule is subsequently changed by Medicare/Workers' Compensation. Notably, effective 7/1/12, an insurer may limit payment pursuant to the applicable fee schedule if and only if the insurance policy includes a notice at the time of issuance (or renewal) that the insurer "may limit payment pursuant to the schedule of charges" specified in the amendment.

  • Itemized Explanation Of Benefits Identifying Alleged Error: With regard to the amended subsection (4), the new statute provides that if the insurer pays only a portion of a claim or rejects a claim due to an alleged error in the claim, the insurer must provide an itemized explanation of benefits identifying the error. The person making the claim - without waiving any other legal remedy for payment - then has 15 days to submit a revised claim which will be considered a timely submitted claim.

  • Notice of Suspected Fraud: Furthermore, if the insurer has a reasonable belief that a fraudulent insurance act has been committed, it has to notify the claimant in writing within 30 days after submission of the claim that same is being investigated for suspected fraud. The claim also has to be reported to the Division of Insurance Fraud. If the insurer provides the required notice, it then gets an additional 60 days to conduct its fraud investigation. However, no later than 90 days after the claim is submitted, the insurer must deny or pay the claim.

  • New subsection (5)(h) discusses entities which must be licensed clinics and exceptions thereto. We encourage you to carefully review this section (see page 45 of the new statutory scheme). Subsection (6) was also amended significantly and now in any dispute between the insured/their assignee and the insurer, upon request the insurer must notify the insured/assignee that the policy limits have been reached within 15 days after the limits have been reached. We anticipate that all Assignments of Benefits will now contain such a request, so the best practice is to notify the insured and all assignees once the policy limits are reached.

  • EUO: 627.736(6)(g) as amended now requires insureds and omnibus claimants to submit to an examination under oath if the policy includes such terms. Most significantly, compliance with this new subsection is a condition precedent to receiving benefits. However, in order to limit the frequency of such EUO's, if an insurer has a general business practice without a reasonable basis it becomes subject to §626.9541 (unfair methods of competition and unfair or deceptive acts or practices).

  • Unfair Claim Settlement Practices: The Florida Legislature also amended §626.9541 to include as an unfair claim settlement practice instances in which an insurer who fails to pay PIP benefits within the time period prescribed by §627,.736(4)(b) with such frequency that it is perceived as a general business practice. This unfair claim settlement practice could result in the insurer’s paying of restitution, including interest, for the time period within which the insurer failed to pay claims as required by law, as well as any other penalties allowed by law. Most importantly, this unfair claim settlement practice could result in the suspension of the insurer’s certificate of authority.

§627.7311 – Effect of Law on Personal Injury Protection Policies

  • In exchange for the many pro-insurer changes established in House Bill 119, the Legislature is requiring that the insurance carriers pass on the savings to the insureds. Specifically, by September 15, 2012, the Office of Insurance Regulation ("OIR") shall submit a report regarding the savings expected from the enactment of House Bill 119.

  • By October 1, 2012, each PIP insurer shall make a rate filing with the OIR reflecting a 10% reduction from the current base rate for PIP insurance. If the rate filing does not reflect the 10% reduction, then the insurer must provide a detailed explanation as to why it failed to achieve a 10% reduction.

  • Thereafter, by January 1, 2014, each PIP insurer shall make a rate filing with the OIR reflecting a 25% reduction from the base rate for PIP insurance as of July 1, 2012. If the January 1, 2014 rate filing does not reflect a 25% reduction, then the insurer must submit a detailed explanation as to why it failed to achieve said 25% reduction.

  • If an insurer fails to provide its detailed explanation regarding its failure to achieve the specific reduction along with either the October 1, 2012 or January 1, 2014 rate filing, the insurer shall be required to stop writing new PIP policies in Florida until such explanation is provided.

New subsection (8) 627.736 was supposed to contain the cap on attorney's fees, but there are merely guidelines contained within the amended scheme that fall far short of a hard line limit. A more detailed update on the Legislative changes to Florida Motor Vehicle No-Fault Law, as well as the other statutory changes established through House Bill 119 will appear in the Luks, Santaniello April 2012 Issue of Legal Update. For further information or questions regarding the Florida Motor Vehicle No-Fault Law, please contact the members listed below, or your Luks & Santaniello contact.

Andrew Chiera – PIP Attorney
Boca Raton Office
T: 561.226.2527
E-mail: AChiera@LS-Law.com

Daniel Fox – PIP Attorney
Miami Office
T: 305.377.8900 Ext. 304
E-mail: DFox@LS-Law.com

About Luks, Santaniello, Petrillo & Jones

Luks, Santaniello is a Florida AV® Preeminent ™ Rated, Corporate & Insurance Defense Litigation firm handling Liability (most lines- A/GL, A&E, BAP, CGL, D&O, E&O, E&S, P&C, PL, PLL, JUA, XS and EC) and Workers’ Compensation matters. We also offer Medicare Set-Aside Services, Medicare Condition-al Lien Resolution Services and Medicare Reporting. The firm has a diversified team of approximately 40 Insurance Defense Litigation attorneys across seven offices in Miami, Boca Raton, Fort Lauderdale, Orlando, Tampa, Jacksonville and Tallahassee. Since inception in 1995, members have tried at least 100 cases in State and Federal Courts. Partner Shareholders average 22 years of trial litigation experience. Luks, Santaniello has been named a 2012 Go-To Law Firm at F500 Companies for its handling of Florida Commercial Litigation matters. The firm was also recently featured in the “Member Spotlight” of the BestConnect March 2012 issue. Luks, Santaniello was selected by A.M. Best for its notable and timely contributions to the Insurance Industry.

Disclaimer - Please Read.

Luks & Santaniello LLC. is providing this Law Alert to clients and others to provide current awareness of changes to the Florida Motor Vehicle No-Fault Law and other statutory changes established through House Bill 119. This alert is a brief summary of the laws or regulations highlighted. The communication is for informational purposes only and does not constitute legal or professional advice. Reviewing this information does not create an attorney-client relationship. Sending an e-mail to Luks, Santaniello et al does not establish an attorney-client relationship unless the firm has in fact acknowledged and agreed to the same.