|Date:||March 02, 2017|
Will this finally be the year the Florida Legislature breaks the stalemate between insurers and trial lawyers over so-called abusive water claims?
“I feel like Bill Murray, waking up to the same issue every year,” said Gary Farmer, a Fort Lauderdale Democrat and first-year senator.
When their alarm clocks ring on Tuesday signalling the start of the Legislature’s 2017 spring session, Farmer, fellow lawmakers, and lobbyists on both sides of the assignment-of-benefits debate will nonetheless head to the Capitol ready to reiterate their positions.
Who knows? Maybe each side will give a bit, a law will be enacted, costs will go down, and the issue can be put to rest for awhile.
Michael Carlson, president of the Personal Insurance Federation of Florida, is reprising his role as proponent of bills intended to reduce the volume and cost of lawsuits filed against insurers.
“We are hopeful that this is finally the year the Legislature takes steps to curb abusive AOB practices,” Carlson said in a prepared statement.
Farmer has been involved in the fight over assignment of benefits for five years. Previously, he was president of the trial lawyers’ organization Florida Justice Association, as the attorneys pushed back against proposals to restrict property owners’ ability to sign over benefits of their insurance policies to contractors.
This year, Farmer is sponsor of the attorneys’ proposed fix countering insurers’ latest proposal that would deny legal fees to prevailing attorneys representing contractors working under assignments.
While the assignment of benefits issue might be considered the most important insurance-related issue up for debate this spring, it isn’t the only one.
Lawmakers are also expected to look at proposals to jettison personal injury protection [PIP] auto insurance, allow health insurance customers to sue their HMOs, prevent health insurers from dropping drugs from coverage lists in the middle of policy terms, revamp the workers’ compensation system, and protect a fledgling membership-based primary care system from insurance regulators.
Here are some of the major insurance issues facing lawmakers this session:
Assignment of benefits/One-way attorneys fees — Lawmakers loyal to the insurance and legal industries will once again square off over proposals to reduce claims costs that insurers say are driving rate increases for everyone, but particularly policyholders in South Florida.
This year, a bill that would cut off legal fees to attorneys who represent water damage contractors working under post-loss assignments of insurance benefits was crafted with input from officials of Citizens Property Insurance Corp., the state Division of Financial Services, the state Office of Insurance Regulation, and insurance industry trade groups.
Failure to enact reforms could result in average Citizens premiums in the tricounty region increasing from $3,200 in 2016 to more than $4,000 by 2020, Citizens president Barry Gilway warns. Other insurers warn of rate increases as well.
State law bars Citizens, still South Florida’s largest insurer, from raising rates by more than 10 percent a year, but Citizens says policyholders can expect 10-percent annual increases in perpetuity without legislative action.
Attorneys have countered with their own bill, introduced by Farmer, that omits the attorney fee restriction but requires notification of assignments to insurers within 10 days and state licensing of water damage contractors.
This is the fifth year the Legislature has looked at the assignment-of-benefits issue. All previous attempts have died as compromise eluded the powerful and deep-pocketed factions.
While the insurance industry likes its chances to get reforms enacted this year, its Senate bill would first have to clear the Banking and Insurance Committee, where four of nine members were backed in their last elections by the trial attorneys’ advocacy group, Florida Justice Association.
Chairwoman Anitere Flores, R-Miami, who is not one of the four FJA-backed committee members, voiced skepticism in January over insurers’ statements blaming water claims for increased losses. She has said she would need to see data proving their claims before she would support their bill, and Farmer said he’s confident Flores will support the attorneys’ bill.
Bills: SB 1038, introduced by Sen. Dorothy Hukill, R-Ormond Beach; SB 1218 by Sen. Gary Farmer, D-Fort Lauderdale.
Personal Injury Protection insurance — Average motorists would save $81 per policy if the Legislature repeals the state’s requirement that everyone carry a $10,000 no-fault personal injury protection insurance policy.
Adopted in 1971 to provide immediate payments for people injured in minor accident, the policies became the target of widespread fraud prior to 2012 reforms that few regard as having fixed the problems.
Trial attorneys want to replace PIP with a requirement to purchase bodily injury insurance, an “at-fault” form of coverage that would likely create more case opportunities for lawyers.
But the Florida Hospital Association is urging the state to keep the PIP requirement in place, saying it provides a basic level of coverage for more than 2.6 million otherwise uninsured motorists and guarantees payment to hospitals that treat them.
Bills: SB 156 introduced by Sen. Jeff Brandes, R-St. Petersburg; HB 461 by Rep. Bill Hager, R-Boca Raton; HB 1063 by Rep. Erin Grall, R-Vero Beach.
Prescription drugs — House and Senate bills would bar health insurance plans from removing coverage of any listed drug in the middle of a plan term. Patients say insurance companies commonly remove drugs needed for chronic conditions, such as asthma, from their drug formularies, forcing them to make multiple trips to physicians and specialists for prescriptions to covered versions.
But insurance plans say they need the flexibility to respond to sudden changes, such as when the Epi-Pen sharply increased in price and forced insurers to find lower cost alternatives in the middle of most patients’ policy terms.
Bills: SB 182 introduced by Sen. Debbie Mayfield, R-Melbourne; HB 95 by Rep. Ralph Massullo, R-Beverly Hills
Workers’ compensation — A 14.5 percent increase in premiums businesses pay for workers compensation insurance, approved last year by the state Office of Insurance Regulation, has touched off calls for reforms.
Proposals include opening the rate-making process by the National Council on Compensation Insurance and state Office of Insurance Regulation to public scrutiny. The internal deliberations have been excluded from public oversight, but a Leon County judge last December ruled the exclusion violated Florida’s Sunshine Law.
The 14.5-percent rate increase was blamed in part on two state Supreme Court rulings last year — one that struck down caps on fees paid to attorneys who represent injured workers and another that invalidated a two-year limit on temporary benefits for workers who are totally disabled but have not yet reached maximum medical improvement.
Business groups want to reduce insurance rates and limit attorney fees, while trial lawyers and unions want to reduce barriers to benefits and allow workers more choices over medical providers.
Bills: SB 1582 introduced by Sen. Rob Bradley, R-Orange Park.
HMO suits — Members of commercial and Medicaid Health Maintenance Organization plans would be allowed to sue their HMOs over failure to provide covered services under a proposed bill.
The bill would enable anyone to sue an HMO if the organization violates certain provisions of state law or fails to provide a covered service when medically reasonable and necessary in the judgment of the patient’s physician.
It would also repeal a 2003 ban against suing HMOs over actions caused by contracted providers, such as physicians, who don’t work directly for the HMO.
Supporters say the proposal would allow physicians to again decide what’s best for their patients. Opponents say it would spark a sharp increase in malpractice claims against HMOs, driving up costs and resulting in insurers further narrowing networks.
Bills: SB 262 by Sen. Greg Steube, R-Sarasota; HB 675 by Rep. Cord Byrd, R-Jacksonville Beach.
Direct primary care — Insurance companies are cut out of the relationship between primary care physicians and patients under a monthly-payment concept that could be formalized this year.
Only a handful of direct primary care physicians operate in the tricounty region right now, and most metro areas in Florida have access to just four or five.
Proponents like Dr. Oscar Hernandez, founder of a small practice in Miami-Dade County called MetroMed, believes more people would ditch their insurers for all but catastrophic health issues if they knew about the concept.
Costs for direct primary care memberships range from $50 to $100 a month and work best for patients with chronic conditions who require regular maintenance care for such conditions as diabetes, coronary artery disease, asthma, and migraines, supporters say.
The bills would require membership agreements to spell out what’s provided and not provided, allow terminations with 30-days’ notice from physicians or consumers, bar physicians from filing claims against patients’ insurance, and prohibit oversight by state insurance regulators.
Bills: SB 240 by Sen. Tom Lee, R-Brandon; HB 161 by Daniel Burgess Jr., R-Zephyrhills, and Rep. Mike Miller, R-Orlando.