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Fla.'s No-Fault Insurance Law May Not Expire: After Nearly Two Weeks of Negotiations, There's a Good Chance the State's No-Fault Auto Insurance Law Could Be Extended

Sep 21, 2007

By Beatrice E. Garcia, The Miami Herald

Sep. 22--Florida's no-fault auto insurance law, set to expire Oct. 1, is likely to get another life, legislators said Friday.

A plan that calls for extending the controversial law through the end of the year and makes significant changes in January has been hashed out in Tallahassee.

The deal adds a fee schedule on medical payments for care to accident victims and pumps in more money to fight insurance fraud. Reached after nearly two weeks of intense negotiations, the deal must be reviewed by Gov. Charlie Crist as well as House and Senate leaders.

"It looks like we saved PIP," said Rep. Julio Robaina, R-Miami, who said he is optimistic a bill will be passed.

The key element is preserved: the requirement for Florida drivers to buy at least $10,000 of personal injury protection, or PIP. PIP covers medical bills after an auto accident regardless of who caused the accident.

The new deal also would continue the state's tough enforcement mechanism, which lets authorities know within days when auto insurance is canceled or lapses.

Some consumers had been looking forward to saving some money on their auto insurance premiums if the PIP requirement went away when the no-fault law expired. Some drivers who have health insurance from an employer or buy it themselves see the coverage as redundant.

There's still work to be done in Tallahassee. Gov. Charlie Crist's legislative staff, which has corralled the various stakeholders in the fight to reform the auto insurance law since early this month, must still brief the governor over the weekend.

Then it will be up to Sen. Bill Posey, R-Rockledge, and Rep. Ellyn Bogdanoff, R-Fort Lauderdale, to draft a bill. They have been the key legislators negotiating the no-fault reforms.

If that happens, lawmakers could be called to Tallahassee to debate and vote through such a bill late next week, perhaps on Friday, or they could take it up during the special session that's already planned to deal with budget cuts.

"A decision on whether PIP will be included in the special session will not be made until next week," said Kathy Mears, spokeswoman for Senate President Ken Pruitt.

Posey said he and Bogdanoff signed off on the reforms, which are drawn from bills drafted by these two lawmakers in recent weeks.

"The public has made it quite clear that they want to keep PIP and don't want to pay excessive rates for it," Posey said.

"The speaker got the reforms he was looking for -- significant fraud reform," said Bogdanoff, referring to a proposal to provide an additional $2 million to beef up fraud investigations that has been heavily favored by House Speaker Marco Rubio, R-Miami.

A representative for Rubio was optimistic about the outcome because it was "pro-consumer and anti-fraud."

The proposal also eliminates expensive deductibles, limits PIP claims to doctors and licensed clinics, ensures consolidating suits so that one claim doesn't produce multiple court actions and includes a schedule listing what medical procedures can be billed.

Not included are limits on treatments such as visits to doctors, clinics, chiropractors and therapists, which many insurers say are needed to control excessive billing.

The plan calls for extending the current no-fault law through the end of the year, with the changes taking place in January.

Reforming the no-fault law has been a bumpy ride as a large contingent of special-interests groups planted their often-conflicting demands.

Hospitals and many doctors in South Florida and throughout the state wanted to keep the law because the medical benefits provided by PIP are the only form of health insurance many drivers have. Nearly 21 percent of Floridians lack health insurance.

Hospitals fear they could would be left with some $140 million a year in unpaid bills for care they would be required to provide to auto accident victims without health insurance coverage.

Yet many insurers say the PIP requirement, which many special interest groups wanted to preserve, is a major flaw in the no-fault law.

Major companies such as State Farm and Allstate have lobbied aggressively to convince lawmakers and consumers that they are better off without PIP. These insurers contend drivers will be able to save on insurance costs because the coverage won't be required.

"It is a sad, sad day when special interest groups win out over Florida consumers and the rampant fraud that everyone knows is out there is allowed to continue unchecked," said Charles Grimsley, general counsel for United Automobile Insurance Group.

Grimsley also heads the Florida Property and Casualty Association, a trade group of mostly Florida-based auto insurers that cater to drivers with blemished records or poor credit ratings. This group would prefer to see the no-fault law disappear because it sees the mandatory PIP requirement breeding fraud and excessive billing by healthcare providers.

Grimsley and others said having a fee schedule isn't sufficient to curb the medical costs.

"Doctors and chiropractors engaged in fraud will simply over-treat to make up for any lost revenue created by the fee schedule," he said.

Still, many consumers could be confused in the coming weeks and months about their auto insurance and what's required. Drivers with renewals coming up in early October have received policies without PIP -- and perhaps some savings -- because the law was expected to expire.

Miami Herald staff writers Gary Fineout and Marc Caputo contributed to this story from Tallahassee.


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