NU Online News Service, April 6, 3:22 p.m. EDT

Legislation in Florida aimed at curbing personal injury protection (PIP) insurance fraud stalled in state Senate Banking and Insurance Committee yesterday.

The discussion related to SB 1930, a bill to tackle alleged fraud by medical clinics and staged auto crash rings, took too long and a vote on the measure was put off.

“This can happen when a lot of people have their hands in the cookie jar,” says Katherine Webb of Colodny, Fass, Talenfeld, Karlinsky and Abate in Tallahassee. The firm is the lobbyist for the Florida Property and Casualty Association (FPCA). “They basically ran out of time because everyone wanted to be heard.”

A lot of money rides on SB 1930 and SB 1694, another PIP-related bill that the committee didn’t even get to. The insurance industry, medical professionals and attorneys each want time at the microphone, Webb says.

SB 1694, like its House companion bill HB 967, looks to cap attorneys’ fees to a percentage of benefits obtained and does away with contingency fee multipliers to calculate attorneys’ fees. The practice of using this multiplier in Florida basically doubles the amount of money a PIP attorney can make in litigation, the industry says.

The PIP litigation reform bill also creates an arbitration process as a alternate dispute resolution.

The House version has cleared two committees.

The measures are supported by the industry, most recently the newly formed Personal Insurance Federation of Florida (PIFF), whose charter members include State Farm, Allstate and Progressive companies operating in the Sunshine State.

The bill that was hung up yesterday, SB 1930, increases penalties for those who seek medical licenses illegally, provides insurers more time to investigate, and gives insurers the right to conduct examination under oath and independent medical exams.

Insurers say the current system is infected with fraud. Allegations out of Florida include fake doctors, fake patients, paid patients and attorneys financially connected to medical facilities—with each standing to make a profit.

“It’s a big, incestuous circle of an exchange of money,” says Webb. “These bills would take away some of the incentives.”