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The Downside of PIP: Fraud


In a recent blog post, we discussed what personal injury protection was in regard to automobile insurance in the state of Florida. Today, we will divulge into a disappointing aspect of personal injury protection: fraudulent activity. While the number of drivers and auto accidents has remained fairly consistent in recent years, the number of PIP claims has grown rapidly. In the past few years, Florida has led the nation in PIP Questionable Claim referrals, and has had nearly twice as many as the next highest state.

Recent Legislation was Passed In an Attempt to Curtail the Rapidly Growing Problem of Fraud

Once described as a “billion dollar tax” on Florida’s citizens, fraudulent activity within the PIP system was seen as a problem that needed to be solved. In 2012, legislation was passed in order to reform the system, immediately resulting in a 10 percent decrease in the rate of PIP fraud. The legislation enforced stronger penalties for medical providers who commit PIP fraud; this included a five-year license suspension and a ten-year restriction from PIP reimbursement. Additionally, the law limited injured parties to within 14 days after the accident to seek medical treatment, decreased PIP benefits of those classified as “non-emergency” to $2,500, and disallowed massage therapists and acupuncturists the right to perform PIP treatment.

Staged Accidents Were a Widely Used Fraudulent Scheme

The biggest problem was that of staged accidents. Essentially, individuals are recruited to stage a minor accident where no one is actually injured. However, a full claim of $10,000 is filed, and the money is then divided among those involved – typically the passengers, and the operator of the clinic where they were “treated.” Additionally, a study showed that 62% of total PIP costs and approximately 43% of PIP treatment costs came from soft tissue treatments. Of this, 22% were massage treatments. Fortunately, the aforementioned legislation recognized this problem and sought to eliminate the ongoing fraudulent activity.

Crackdowns Have Occurred on Those Engaging in Fraudulent Activity

As a result of staged accidents, Tampa and Miami are among the top 10 most expensive cities for car insurance. Recently, a Miami attorney was arrested for his involvement in a $1.5 million PIP fraud scheme and now faces up to 85 years in prison. In this case, the attorney allegedly filed multiple lawsuits seeking payment for treatment of patients at Care Resources Group, LLC. Care Resources was a PIP clinic in Miami that operated under straw ownership. Straw ownership is ownership done so on behalf of another person, often times used to illegally circumvent clinic licensing requirements. The clinic’s attorney filed lawsuits against more than a dozen separate insurance providers, and was fully aware of the clinic’s illegal operations when doing so.

Fraudulent Activity Appears To Have Decreased – But Have Costs?

It appears that the legislation has helped to curtail fraudulent activity. Questionable claims as a result of staged accidents decreased 53.93% after the legislation was passed. However, there are still questions on whether or not the legislation has really helped with the rising insurance costs that had been occurring. For example, the 14 –Day Rule was instituted so that if an individual does not seek medical treatment within the 14 days, their right to PIP coverage has been forfeited. This drastically cuts down on the amount of people insurance companies must cover, thus increasing the profits of the insurance companies. However, there is no evidence that indicates that premiums have gone down as a result, which was one of the ultimate goals in passing the legislation. Insurance companies have also appeared to be skirting around the $2,500 non-emergency portion of the legislation, grading legitimate emergency situations down to non-emergency situations in order to reduce the claim amount.

If You Or A Loved One Is Involved in a PIP Case, Don’t Wait Until It’s Too Late

As mentioned before when discussing PIP cases, an experienced attorney can be incredibly helpful. While the basis of the PIP law seems simple and as a means to reduce fault and reduce the need for legal interference, it is clearly evident that PIP cases are no small task. Due to fraudulent activity and actions by insurance groups, it is indeed very difficult to comprehend and properly manage a PIP case. Allow our experienced attorneys at Get Me Justice to work for you, ensuring you get every penny you are entitled to.

During his time as a public attorney for the State of Florida, Bernard Walsh developed a passion for defending the legal rights of Florida's citizens. Having seen many people being taken advantage of after being injured and the financial harm that can cause for families he committed himself fully to helping injured clients get justice, by fighting to make greedy insurance companies pay what they owe.

The Downside of PIP: Fraud

Goldman Babboni Fernandez
Murphy & Walsh




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