CFO SINK: I WANT TO MAKE PIP WORK
Published in St.
Petersburg Times, Palm Beach Post, Daytona Beach News-Journal, Florida Times
Union, Miami Herald, Tallahassee Democrat
For 36 years, Floridians have taken for
granted that if they suffer from injuries in a car accident, the first
$10,000 in medical and related benefits are automatically covered by the
No-Fault law, commonly referred to by the medical benefits portion called
PIP, Personal Injury Protection. In six weeks when the law is set to expire
Florida will enter a new world.
I support the intent of the No-Fault
law, which is to ensure that Floridians receive medical treatment for
injuries they suffer in an auto accident without delay and without the need
to file a lawsuit to recover costs relating to these medical benefits.
However, the law, and especially the PIP provision of the law, has major
flaws. A culture of fraud and abuse has grown
around PIP, one that my fraud investigators fight every day. Medical costs
are not managed well in the PIP system.
Claims for PIP medical benefits should not be used to support unnecessary
and costly lawsuits.
But the idea behind the law – the
protection of Floridians and their assets – is the centerpiece of my role as
your Chief Financial Officer. Although I want to make the No-Fault law and
PIP work, there is no indication that the legislature will address this
issue in the upcoming special legislative session. Therefore, with the
impending sunset of the law, I have been working to increase Floridians’
awareness about life after No-Fault.
Several important aspects of auto
insurance will be different when the law goes away. I have established an
informative Web site as an educational resource at
www.myfloridacfo.com/nofault/. On the Web page, you will find answers to
questions about how drivers can protect themselves in a fault-based system
Much has been reported about changes in
auto insurance rates when No-Fault expires. However I encourage you to look
beyond the cost savings and consider what you and your family need. In
particular, you may decide to buy medical payments coverage or increase your
existing Uninsured Motorist or other coverage to better protect you, which
will add some cost to your auto insurance premium, even if PIP costs are
understand that the Legislature has been studying this issue for years, and
well-intentioned members in the Senate and House of Representatives have
proposed various No-Fault reform ideas. The issue is complicated and the
parties – hospitals, doctors, attorneys and insurance companies - rarely
agree on reforms that Floridians need. The reality is that all interested
parties will have to change the way they do business in order to fix PIP.
Whether or not we reform No-Fault or
PIP, I believe the following components should be included in any system of
medical benefits for Floridians:
Florida should require mandatory medical
benefits insurance for owners and operators of motor vehicles regardless of
who is at fault in the accident. This would particularly help the 20% of
Floridians that currently lack health insurance.
Medical benefits insurance should include
mandatory cost containment provisions. For example, fee schedules, which set
reimbursement rates for services and are common in Medicare, Medicaid and
workers’ compensation, and have proven successful for containing costs.
Florida must continue to combat all forms of
insurance fraud and any insurance program must include aggressive anti-fraud
measures. Critics of the No-Fault system point to fraud as a reason to allow
it to sunset. Experience in other states has shown us that fraud happens in
any system and we must remain vigilant against it.
One thing is clear - before No-Fault
sunsets on October 1, all Floridians should examine their automobile
insurance policies to ensure they have adequate coverage to protect
themselves and their assets. I encourage Floridians to contact their
insurance agents or companies in the next six weeks to discuss what changes
will best suit their needs.
I call on the Governor and Legislature
to expand the call for the upcoming Special Legislative Session to include
No-Fault and urge the parties to work together with the best interests of
Floridians in mind. PIP can work. Compromise is needed. A reformed No-Fault
law or a suitable replacement will benefit Floridians directly by protecting
families. Who can argue with that?