When a person is injured in a car accident in Florida, no matter who is at fault, that person’s own auto insurance pays 80% of his or her medical expenses and 60% of lost wages up to a combined total of $10,000.00. This coverage is called “personal injury protection” or “PIP,” for short. This amount of insurance can be expended quickly for a person suffering serious car accident injuries.
Currently, most medical providers are only allowed to charge set rates when billing under PIP insurance. Those rates are set at twice the rates paid by Medicare for the same services as identified by billing codes. This means that a medical provider gets paid twice as much for treating a person injured in auto accident as compared to treating a person with Medicare coverage.
This limitation on the rates that can be charged has proven to be fair. The rates are high enough that skilled medical providers are willing to see people injured in auto accidents, but low enough that the patient can receive several months of care before PIP is exhausted.
However, hospitals and emergency care providers are not subject to these rate limits. Rather, hospital rates are set at a very vague standard of 75% of “usual and customary” charges. “Usual” hospital billing, before adjustments are made, are typically inflated by much more than 100% over what the hospital would accept from a private insurer. Essentially, the hospital never gets paid anywhere near the amount of its original billed amounts. Seventy-five percent of such amounts still comes to about twice of what is a fair charge for the services at issue.
Florida’s House of Representatives has proposed changing this. Florida’ House Health and Human Services Committee proposes to include hospital and emergency care providers in the manner as post-acute medical providers by limiting the charges to 200% of Medicare rates.
A few other changes are proposed. Currently, a person injured in a car accident in Florida has 14 days to see a medical provider in order to be entitled to benefits under a PIP auto policy. The House proposal includes extending that period to 30 days; however, a provider will be required to submit treatment plans to the auto insurance company. If a treatment plan is not submitted, then the PIP insurer will not be obligated to pay that provider.
Since originally enacted in 1972, PIP coverage has proven to have benefits and costs. It ensures that people hurt in car accidents have some access to coverage for their medical bills and lost wages. However, it also requires that a person suffer a permanent injury in order to recover anything more than the portion of medical expenses and lost wages that remain unpaid after PIP has paid its majority share.
This “permanency” requirement may sound fair; however, it can be misused by auto insurers. In nearly every auto accident injury case we handle, once suit is filed, the insurer requires our client be seen by a doctor chosen the the insurance company. There are four or five doctors here in the Jacksonville area that we see time and time again. These doctors make hundreds of thousands of dollars per year doing these reviews and uniformly minimize clients injuries and often claim the client was never injured at all.
Sometimes, jurors agree with the insurance company’s doctor – meaning that a person injured in an accident may not only be denied compensation for pain and suffering, but might actually end up owing the insurance company for its expenses, and sometimes attorney fees, simply because a hired gun doctor claimed the person was not really injured.