Florida Looks to Fix Loophole in PIP Reform Law

Florida regulators are scrambling to fix a loophole in the state’s new auto no-fault insurance law that could affect medical payments to health care providers and trigger a spate of lawsuits against the law.

Florida Gov. Rick Scott last week signed into law a rewrite of the state’s automobile personal injury protection law.

Sponsored by Rep. Jim Boyd (R-Manatee), the new law requires accident victims to report an auto-related injury and seek treatment within 14 days. Policyholders could receive up to $10,000 in benefits for emergency medical care and $2,500 for other less serious injuries.

Since the new law was approved by lawmakers, however, concern has grown over reimbursements to medical providers.

Under the new law, medical providers may charge insurers and injured parties a reasonable amount for services, which could include the use of the federal Medicare payment rates. That portion of the bill is effective July 1.

However, the new list of approved medical providers eligible to treat PIP patients does not take effect until January 1, 2013. That list includes physicians, hospitals, and chiropractors.

Provider groups are worried that insurers will ignore the July 1 effective date and not make medical payments until the January 1 provider list becomes law, resulting in a six-month gap where providers are not paid for treating PIP patients.

The state’s Agency for Health Care Administration released a three-page memo that it hopes will eliminate the six-month gap. AHCA is the state agency in charge of licensing PIP medical providers.

AHCA’s General Counsel Stuart Williams acknowledged that the gap places the agency in a difficult position because if the agency cannot issue licenses until January 1, technically it cannot enforce laws requiring insurers to make payments.

Williams, however, said the agency would treat the June 1 effective date and January 1 effective date as essentially the same and require insurers to reimburse providers.

“The agency believes that the law applies the same effective date of January 1,” Williams wrote.

That raises a legal question of whether a state agency has the legal authority to fix a conflict within a law and attorneys are already pushing forward to take the issue to court.

Even Williams acknowledged the law “places the agency in a conundrum.” But for now the memo is the agency’s best move to do something before June 1.

The state’s other option is to go forward with drafting a rule, but that could take months and likely would be challenged.

Florida Office of Insurance Regulation Jack McDermott said that at this point the matter stands with AHCA. “The purpose of the bill was not to create a six month gap and we’ve encouraged insurers privately that PIP providers should be paid,” McDermott said.