Insurance reforms brought about using a two-pronged approach by lawmakers in Florida

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22Bringing about the insurance reform and tackling fraud seems to be the main concern for lawmakers in Florida, who are finally gearing up to bring about the necessary changes with a two-pronged approach.

The Banking Subcommittee and the House Insurance together have approved a bill that will rein-in litigation and medical costs, while the other bill that has been unveiled will help crack down the fraud.

According to the state laws motorists in Florida are required to carry $10,000 in PIP cover and the insurers are required to pay up 80% of the PIP claims, irrespective of who is at fault. This was done to ensure that the motorists have some coverage and to eliminate the litigation costs when it comes to smaller claims. However, things seem to have gone awry as the insurance cover that was meant to protect seems to have become a feeding trough for fraudsters who are part of an organized ring. This involves attorneys, unscrupulous medical providers, and organized crime rings.

Lawmakers have been trying hard to do away with the law since 2006 with little results. However, this year, insurers feel that there may be a ray of hope in bringing about some comprehensive reforms with the help of Jeff Atwater, Chief Financial Officer, and Governor Rick Scott.

The House Bill (CS\HB967) was approved by the House Subcommittee and it follows recommendations that were made last month by the Florida Chamber of Commerce, Property Casualty Insurers Association, and the Associated Industries of Florida. The main focus of the bill is to address the two main issues which are the litigation costs and the medical costs. The aim is to contain these costs with the restructuring of fees and through other methods.

Under the provisions of this bill the arbitration would be the key factor in resolving PIP claims and the unresolved arbitrations will be resolved only by the state’s circuit courts that would have the sole authority. The attorney’s fees would be capped at $10,000 or thrice the disputed amount in no-fault cases. According to the bill the attorney’s fees should be ‘reasonable’ and the so-called ‘contingency risk multiplier’ would be eliminated.

The lawmakers are also looking for ways and means to bring down medical costs by tying the services to fee schedules. Medical reimbursements rates would be those that are used by Medicare and insurers could use the maximum charges rendered by clinical labs as their benchmark.