Florida is ranked No. 1 in reported questionable claims involving staged vehicle accidents, according to the National Insurance Crime Bureau (NICB). Within Florida, Tampa has now edged out Miami as the number one city for these claims. Florida's new ranking prompted the state's Office of the Insurance Consumer Advocate to host a roundtable discussion in July focusing on Personal Injury Protection (PIP) coverage under Florida's Motor Vehicle No-Fault Law. Participants included staff from the office and other regulatory agencies along with members of the insurance, health-care, legal and law enforcement communities. The office has now issued its report, defining the issues and offering recommendations in specific areas: staged accidents; licensure of health-care clinics; PIP claims handling process; fee schedule; examination under oath; and policies rescinded for alleged misrepresentation. Staged Accidents While a partnership between law enforcement and the insurance industry to create the Major Medical Fraud Task Force in South Florida has helped, participants see a need for additional legislation and further funding. Other recommendations include:

• Create a dedicated team of statewide prosecutors to pursue insurance fraud.

• Require all law enforcement officers to complete the long form of the crash report when there are passengers in the vehicle involved in an accident in order to document the name, address and contact information of each passenger.
• Increase minimum mandatory terms of imprisonment and fines for persons convicted of filing false claims for benefits.

• Provide immunity from criminal prosecution to members of an insurer's designated Anti-Fraud Investigation Unit who in good faith share information regarding suspected fraudulent activities involving health-care practitioners and/or health-care clinics with the various professional medical boards.

• Support legislation to adopt provisions of the Coalition Against Insurance Fraud's Insurance Fraud Model Act that are not currently in Florida law. The Act can be found on the Coalition's website at: http://www.insurancefraud.org/downloads/Model%20fraud%20act.pdf.

Licensure of Health-Care Clinics Roundtable participants expressed concern that health-care clinics that are exempt from licensure are at the "epicenter" of PIP claims fraud and staged accidents. According to the Department of Financial Services' Division of Insurance Fraud, in 90 percent of PIP fraud cases involving clinics, the clinics are exempt from licensure. To address this problem, roundtable participants recommend:

• Require health-care clinics to be licensed if medical services are offered outside of the scope of the owners' practitioner's license. However, there should be no restrictions on services provided within the scope of license by licensed health-care providers who provide services in the clinic.
• Require the Certificate of Exemption from licensure as a health-care clinic to be renewed every two years or whenever there is a change in ownership, and require continued disclosure and remedies for false or misleading applications.
• Require clinic application and exemption forms to include a statement that knowingly providing a false, misleading or fraudulent application or document relating to licensure or exemption or compliance with the clinic licensing law is a fraudulent insurance act that is subject to investigation by the Division of Insurance Fraud and may be grounds for discipline by Department of Health licensing boards.
• Provide that submitting false, misleading or fraudulent information on a clinic application or exemption form is a felony.
• Strengthen penalties for submitting a fraudulent application and conducting fraudulent activities at health-care clinics.
• Require a 12-month license suspension for any physician or other practitioner licensed in Florida who is found guilty of insurance fraud involving PIP benefit claims. (Alternately, decertify licensed practitioners who allow their names to be used to foster fraudulent activities at a health-care clinic.)
• Require health-care clinics to be licensed if their operations are more than 50 percent devoted to PIP claims. (Alternatively, require licensure if a clinic promotes its business and/or any of its practices as a PIP provider in advertising, on a marquee, on business cards, or in any directories.)

PIP Claims Handling Process The Florida Insurance Code outlines the PIP claims handling process for medical providers. In order to prove compliance with time-sensitive activities, the code states that billing statements must be sent certified mail. With advancements in electronic filing processes, roundtable participants recommend a study to determine the feasibility of requiring insurers to file claims electronically. Other recommendations include:

• Study the feasibility of requiring insurers to provide an Explanation of Benefits (EOB) in a standardized format for each health-care provider bill received by the insurer.
• Allow insurers to suspend the payment of a claim for 60 days from the date of receipt when fraud is suspected. This change will allow the insurer an additional 30 days to properly investigate the claim, reduce the need for a demand letter, expedite payment for valid claims, and deter fraudulent activity.

Fee Schedule The current fee schedule was enacted in 2008. In the intervening years it has been subject to many interpretations and much litigation. The roundtable participants recommend action to:

• Clarify the utilization of the 2007 Medicare Part B fee schedule.There are differences between the 2007 Medicare Part B fee schedule found on the Centers for Medicare and Medicaid Services website at www.CMS.gov, and the 2007 Medicare Part B fee schedule found on the First Coast Services Options (FCSO) website at www.medicare.fcso.com. FCSO is Medicare's administrator in Florida.
• Clarify that the fee schedule is the maximum amount of reimbursement payable by insurers to medical providers for medical procedures and treatment covered by PIP.

Examination Under Oath (EUO) While conceding that examination under oath is a valuable tool to combat fraud, roundtable participants think the process may at times be abusive, and therefore recommend:

• Establish standards or thresholds so that an EUO may be required only when the person who will be examined is the only source of information that is reasonably necessary for the insurer to obtain in order to properly adjust a claim.
• Restrict the request for documents to be provided by the insured at an EUO to documents that are pertinent to the claim.
• Allow insureds to have counsel present at all EUOs.

Policies Rescinded for Alleged Misrepresentation The Florida Insurance Code allows an insurer to rescind the insurance contract after a loss if there is evidence that the applicant/policyholder provided fraudulent information when obtaining coverage. Expressing concern about "post-claims underwriting," roundtable participants made two recommendations:

• Require all applications for automobile insurance to have a YES or NO question pertaining to roommates and other family members residing in the same household. If the response is YES, the applicants would be required to write (in his /her own handwriting) the name(s) of their roommates and/or other family members residing in the same household. If the response is NO, the applicants would be required to write (in his / her own handwriting): There are no roommates or other family members residing in the household. This requirement will ensure that applicants fully understand the question and provide the insurer with indisputable confirmation as to whether the applicants/policyholders intentionally withheld or omitted information when the application for coverage was completed.

• Provide that insurers who fail to notify the insured within 21 days of the date of a motor vehicle insurance application that the application contains a misstatement or material misrepresentation that should have been discovered within 21 days by a reasonable investigation by the insurer waives the right to later cancel the policy based on the information unless the insured fails to provide the correct information to the insurer.