Consumer eViews

Volume 2, Number 49, December 5, 2005 

The Florida Legislature is meeting this week in a special session called by the governor to address two specific issues, one of which is Medicaid reform.  Our state’s Medicaid program serves as a healthcare safety net for more than 2.2  million low-income, elderly and disabled Floridians.   

In response to ballooning program costs and patient dissatisfaction with care, the governor and several state lawmakers have promoted reforms to better target services to program participants and increase efficiencies by utilizing a managed-care approach.  Approximately one-third of Medicaid patients are already enrolled in managed-care plans.

Without a complete overhaul of the program, the state’s Medicaid program is expected to consume more than 60 percent of the states’ annual budget by 2015. Costs have already spiraled to nearly $15 billion this year.

In October, the federal government endorsed pilot projects in Broward and Duval counties.  There are more than 300,000 Medicaid participants in these two counties alone.

The next step is anticipated this week with final approval from the Legislature.   

Without a fix, escalating Medicaid costs will threaten our state’s ability to fund other critical services and the quality of care could be compromised.

Recommended reforms deserve consideration.

-- Tom Gallagher


Tom Gallagher, Florida’s Chief Financial Officer, announced a new mediation program to help condominium associations resolve disputes with their insurance companies over their hurricane claims.  Gallagher said the mediation program, set up for homeowners after the 2004 storms, has successfully helped more than 11,000 storm victims reach satisfactory settlements on their hurricane claims. 

“Many condominium communities in our state have not yet started to rebuild because they are struggling with their insurance companies to get their claims paid,” said Gallagher, who oversees the Department of Financial Services. “My goal is to offer them a no-cost alternative to resolving their claims and help them successfully recover from catastrophic losses.”

The mediation program offers a dispute resolution process for condominium associations and other commercial residential properties to resolve hurricane claims prior to pursuing other options such as going to court.  The mediations are free of charge and using the program does not preclude an association’s right to take the dispute to court or to invoke the policy appraisal clause.

When the department receives a request for mediation the insurance company is informed it has 21 days to settle the claim, or it will have to appear at mediation with the policyholder or its legal representative.  Mediation meetings will be facilitated by Supreme Court-certified mediators provided through the Collins Center for Public Policy.
Storm victims can learn more about mediation services by calling the hurricane hotline at 1-800-22-STORM.  Visit our website at and click on the Condo Mediation button on the right for more information.


 Florida doctors who had medical malpractice coverage with the former Caduceus Self Insurance Fund Inc. could potentially see reimbursements for assessments they paid to bail out the financially impaired company after a jury found the defunct company is owed nearly $18 million from a company that assumed some of the business.

Caduceus, a Florida-domiciled medical malpractice insurer, was ordered into state receivership in January 2000.  Prior to being placed into receivership, Caduceus entered a contract with The Doctor’s Company (TDC) to be paid for policyholders who switched to TDC.  A jury found TDC owes Caduceus $17.9 million under that contract. TDC has appealed the decision.

“We take our job very seriously to recover every asset that can go toward making affected Floridians whole,” said Tom Gallagher, Florida’s chief financial officer.  Gallagher oversees the Department of Financial Services, which includes the Division of Rehabilitation and Liquidation.  The judgment is one of the largest ever for a company in rehabilitation or liquidation with the department.|

The department determined about two-thirds of the doctors formerly with Caduceus – which operated only in Florida – elected to obtain coverage through Napa, California-based TDC.  When department accountants looked at the contract language and what had been paid by TDC, they concluded Caduceus had been shortchanged, and as receiver the department brought a lawsuit to recover what TDC was believed to owe Caduceus.

Caduceus’ policyholders were assessed fees to make up Caduceus’ shortfall.  The judgment would first be used to pay any claims against physicians who were former members and pay off creditors.  Gallagher said any remaining funds will be used to reimburse physicians’ assessments.

The Division of Rehabilitation and Liquidation plans, coordinates and directs the conservation, rehabilitation and liquidation of insolvent insurance companies, unlicensed insurance companies and unlicensed insurance entities and rehabilitates financially troubled insurance companies.


Tom Gallagher, state fire marshal, said that more than $32 million in federal Homeland Security funds have been funneled through the State Fire Marshal’s Office to fire departments throughout Florida, helping communities prepare to respond to natural disasters as well as chemical, biological, radiological or nuclear threats.

“Florida has one of the most advanced response systems in the country thanks to hundreds of firefighters and other first responders who have trained and prepared for potential threats,” said State Fire Marshal Tom Gallagher.  “I applaud those on the front lines who have stepped up efforts to protect our communities, and who now have additional resources in place to ensure a rapid response after a catastrophic event.”

The funds have helped establish, train and equip 50 technical rescue teams, seven urban search and rescue (US&R) teams and to better equip and train 28 existing regional hazardous materials teams.  The money has also provided almost 300,000 hours of training to nearly 1,700 first responders serving on these teams.

The technical rescue teams and regional hazardous material teams are under the State Fire Marshal’s Office. The US&R teams use local personnel and are a part of the new Florida Urban Search and Rescue System.

The value of these teams has already been proven: Florida-based US&R teams completed nearly 4,900 technical searches of structures within hours of Hurricane Ivan’s landfall in the Panhandle last year.  This year, state technical rescue teams from Tampa Bay, Central Florida, Jacksonville, North Central Florida, and Miami-Dade and Volusia counties were among the first search teams to arrive in Mississippi after Hurricane Katrina hammered the Gulf Coast region. 

Funds also are helping to build a permanent US&R training center at the Florida State Fire College that will provide specialized training on trench, confined space, rubble pile rescue and structural collapse simulation props along with a live-fire training building.  This will be the only “post-blast” collapse simulator providing fire and smoke conditions in the United States.

Homeland security funds are also funding enhanced mutual aid radio caches located throughout the state.  Bought originally by the Division of State Fire Marshal after the wildfires of 1998, they allow for mutual-aid responders to work with common communication systems, often without tying up local radio frequencies.  The 100-foot radio masts have been used extensively to support local fire departments, law enforcement agencies and EMS after hurricanes destroyed local infrastructure.  During last year’s hurricanes, two such units were set up with a microwave link for 911 calls in a county where the telephone lines were destroyed.

Future plans include adding a unit to South Florida to be located in Tamarac, establishing greater interoperable communications allowing responders to use their normal radios, and providing funding to the fire departments that now operate the radio caches in order to purchase vehicles to tow the trailers used to carry the radio equipment.

Homeland security funds also provided $3 million for 11,400 radiological monitors for emergency responders and expanded Explosive Ordinance Disposal (EOD) response by the State Fire Marshal’s Office.


An insurance agent whose license was suspended last year and has already been arrested twice this year by state insurance fraud detectives for stealing premiums has been arrested yet again.

The most recent charges accuse Scott Wiggins, 42, who operated SRW Insurance Services out of his home, of pocketing approximately $100,000 in premiums from at least 10 victims, said detectives with the Department of Financial Services, Division of Insurance Fraud.  Wiggins allegedly never placed the coverage and issued forged certificates of coverage to cover his tracks.  Detectives suspect there are more victims.

“We are continuing to investigate the scope of this individual’s operations,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the department.  “We are asking anyone who may have been a victim or knows anything about this operation to please come forward.” 

Detectives said Wiggins used various insurance company names on the forged certificates, including Lexington and Burlington for general liability policies, Rockwood Casualty for workers’ compensation policies, and Windsor for auto insurance policies. 

Wiggins had his license suspended last year by the department’s Division of Agent and Agency Services, and was placed on probation in July for a March arrest for grand theft.  In July he was arrested again for misappropriating premiums and selling insurance without a license.  And then last week, a warrant was obtained for violation of probation because of new charges -- two counts of selling insurance without a license and two counts of grand theft.  If convicted on the charges, he faces up to 40 years in prison and revocation of his license.  The cases are filed with the Orange County State Attorney's Office in the Ninth Judicial Circuit of Florida.  

Anyone who purchased insurance from Wiggins in 2004 or 2005 should contact the insurance company to verify coverage or call the Department’s Consumer Services Hotline at 1-800-342-2762.

The Department of Financial Services, Division of Insurance Fraud, investigates fraud in all types of insurance, including health, life, auto, property and workers’ compensation.  To report information about this case or any other possible insurance fraud case, call the department’s fraud hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to an arrest and conviction.

Consumer Services HelpLine
(800) 342-2762