Source: http://www.florida-lawblog.com/2012/04/2000-statewide-grand-jury-report-on-pip-insurance-fraud-worth-reading.html
Timestamp: 2018-05-21 12:37:25
Document Index: 259897480

Matched Legal Cases: ['§817', '§119', '§817', '§817', '§817', '§817', '§119', '§119', '§6254', '§817', '§817', '§627', '§90']

A SERVICE OF S & F MEDIA LLC 2000 STATEWIDE GRAND JURY REPORT ON PIP INSURANCE FRAUD - WORTH READING - THE FLORIDA LAW BLOG
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2000 STATEWIDE GRAND JURY REPORT ON PIP INSURANCE FRAUD - WORTH READING
A. SCOPE OF PROBLEM
All drivers in Florida are required to carry a minimum of $10,000 in PIP insurance with a maximum deductible of $2,000. The object is to have all drivers and their passengers at least minimally covered for injuries suffered as a result of a motor vehicle accident. The $10,000 personal injury policy is intended to provide not only protection and peace of mind for the insured, it also relieves taxpayers from shouldering the burden of caring for injured drivers and passengers, who do not otherwise have health care insurance.
Where illegal accident victim solicitation occurs, the bulk of the people solicited are those whose names appear in traffic accident reports. As discussed below, the wholesale availability of these reports is a major contributing factor to this illegal activity. The other major contributing factor, it seems to us, is that the laws prohibiting this conduct have been ineffective in providing strong enough consequences to prohibit it. Despite the best efforts of many individuals in both the legal and health care professions, there appear to be few consequences for doctors and lawyers caught soliciting. Prosecutions have been difficult and disciplinary actions are rare. The punishment imposed provides little disincentive, and the behavior is unabated.
B. RELEVANT FLORIDA STATUTES
Florida has a variety of statutes in place to combat ambulance chasing" and the fraud to which it inevitably leads. Among the statutes are:
1. F. S. §817.234(8) (Solicitation) prohibits anyone from soliciting business for the purpose of filing a motor vehicle tort claim, or claims for PIP benefits. This statute was only recently amended to make it a third degree felony, punishable by up to five (5) years in prison.
2. F.S. §119.105 (Protection of Victims of Crimes or Accidents ) This statute is part of the public records law and while allowing access to anyone who wishes to view or to have a copy of police reports, it prohibits the use of such reports for a commercial purpose. Violation of this statute is punishable as a first degree misdemeanor, with up to one year in the county jail.
3. F. S. §817.505 (Patient Brokering Prohibited) makes it unlawful for anyone to pay anything, directly or indirectly to induce the referral of patients from a health care provider or facility, or to solicit any kind of payment directly or indirectly in return for referring a patient to a health care provider or facility. This statute is a third degree felony, punishable by up to five (5) years in prison.
C. PATIENT SOLICITATION
Investigations by the Florida Department of Insurance, Division of Insurance Fraud as well as the Special Investigative Units of various insurance companies have revealed a typical scenario for the solicitation of accident victims. The following paragraphs generally describe how patient solicitation occurs in Florida. [See also Exhibit 1]
Last year, the Fourth District Court of Appeal announced its decision in Bradford v. State, 740 So.2d 569 (Fla. 4th DCA 1999). In that case the court upheld the constitutionality of F.S. §817.234(8) prohibiting patient solicitation, but only when the solicitation was done with the intent of filing a fraudulent PIP or motor vehicle claim. DIF has informed us that patient solicitation investigations and prosecutions around the state have been stalled in order to uncover these additional facts. One filed case in Duval County was dismissed on the basis of Bradford, and several major cases have not been filed because of this decision. We heard testimony that some runners, aware of the Bradford decision, openly and brazenly plied their trade.
Recently, the Fourth District Court of Appeal ruled in yet another solicitation case, Hansbrough v. State, (757 So.2d 1282 (Fla. 4th DCA 2000), that it was receding from Bradford and that in fact fraudulent intent was never an element of F.S. §817.234(8). While this decision puts the law back where it was prior to Bradford, the Fourth District Court of Appeal has in its opinion, asked the Supreme Court of Florida to review the case and determine whether fraud is, after all, a necessary element of F.S. §817.234(8).
Pursuant to Florida Statute §119.105 all police reports, which includes auto accident reports, in the State of Florida are considered to be public records unless they are part of a continuing investigation. Once that investigation is complete, any citizen can request to inspect or copy any and all police reports within the possession of any law enforcement agency. Officials who fail to comply with the public records requests can be sued for costs and legal fees as well as be liable for a civil infraction. That statute, however, prohibits any individual from using the information contained within the report for a commercial purpose, including solicitation. Nevertheless, the law has been widely flouted by individuals engaged in the practice of solicitation, perhaps because a violation of the statute is only a first degree misdemeanor. We received as evidence a survey of law enforcement agencies in Southeast Florida, West Florida, and Central Florida which revealed that the majority of bulk accident reports are acquired by just a few categories of individuals, all tied to the solicitation trade. [See Exhibit 2]
Since December of 1998, the United States District Court for the Southern District of Florida has enjoined the enforcement of F.S. §119.105. In its order granting the preliminary injunction, the court held that Florida's law was an unconstitutional restriction on the First Amendment right of free speech. Sal Pellegrino, D.C. v. Michael J. Satz as State Attorney for Broward County, 98-7356-Civ. Since that time, runners have been able to acquire and use police reports for commercial purposes with impunity.
California has also sought to restrict the use of police reports for commercial purposes including solicitation. In 1996, California amended its statute to authorize the release of police reports to individuals only when those individuals sign an affidavit under penalty of perjury that they will only use the information for one of five prescribed purposes, and that the information will not be used directly or indirectly to sell a product or service. California Government Code §6254(f)(3). The amended statute was also challenged as unconstitutional by the publisher of yet another "accident journal". That challenge eventually made its way to the Supreme Court of the United States. In that case, decided in December of 1999, the Supreme Court upheld the validity of California's statute. Los Angeles Police Department v. United Reporting Publishing Corporation, 120 S.Ct. 483 (1999).
In addition to the ban on solicitation imposed by F.S. §817.234(8), doctors, lawyers, and chiropractors are prohibited by their respective ethical rules from contacting potential clients or patients in person or by telephone. As a result unethical practitioners will turn to runners to do the dirty work.
F. DIAGNOSTIC TESTING
Once individuals come in for treatment at a doctor's or chiropractic office they are generally given a variety of tests which vary little, regardless of the symptoms or injuries. Some tests are of marginal utility or validity, but all are extremely profitable. One popular test employed by medical professionals engaged in patient solicitation and brokering are nerve conduction studies. One chiropractor who testified before us explained how he paid a technician approximately $100 per patient to conduct these nerve conduction studies in his office. The chiropractor would then bill the insurance company $900 for these same studies. This enormous markup for diagnostic tests is not customary among legitimate medical professionals.
Other diagnostic tests come and go in popularity, but what they all have in common is that they are extremely expensive, highly profitable, and generally employed to drain the $10,000 coverage as quickly as possible. In fact one nationally syndicated diagnostic company boasts in its literature that it can teach professionals to reach "policy limits in 90 minutes." The question triggered by such a statement is why medical professionals, ostensibly dedicated to providing the best medical treatment possible to their patients, would ever be concerned about reaching policy limits quickly or otherwise. The enormous profit potential in ordering these tests can only have a corrosive influence on a doctor's independent medical judgment.
G. MRI BROKERING
At least one court has taken notice of this MRI brokering practice. In the case of Nuwave Diagnostics, Inc. vs. State Farm Mutual Automobile Insurance Company, Broward County Circuit Case No. 97-09174, the court disallowed two charges of $1,500 for MRI scans billed by the Plaintiff, an MRI broker. The facts in that case, as recited in the court's opinion, were that the broker contracted with an MRI facility to pay $400 per scan. The broker would then refer patients to the facility which would perform the MRI scans. Thereafter, the broker would bill the insured's PIP carrier $1,500 for each scan. The Court rejected, as a legal fiction, the broker's claim that it had provided the MRI services. The Court further found that the brokering activity outlined in that case constituted a clear violation of F.S. §817.505. The court concluded that the $1,100 markup charged by the broker was nothing more than a kickback.
H. PERSONAL INJURY LAWYERS
Florida's PIP Statute imposes a rigid 30 day rule on insurance companies. F.S. §627.736 mandates that PIP claims must be paid within 30 days or the claim is considered overdue and the insurance company will be liable in a suit to recover these PIP benefits. The company will also be responsible for paying plaintiff's legal fees, which can add thousands to the amount of the settlement. Insurance companies complain that 30 days is rarely enough time to investigate and demonstrate that the claim is fraudulent. For this reason, many insurance companies have resigned themselves to paying any sort of PIP claim no matter how outlandish. In the past, this has included paying inflated MRI claims that they knew, or believed to be, brokered.
Patient solicitation and brokering by doctors, lawyers or chiropractors is banned by the ethical rules of each profession. While we are certain that the great majority of these professionals practice ethically and honorably, we find the prevalence of solicitation and brokering significant enough to justify serious attention to the problems by each professions' disciplinary boards. It does not appear to us, however, that the discipline handed out to date, either in number or in punishment, is enough to dissuade unethical professionals from participating in patient solicitation.
1. Board of Chiropractic Medicine
All complaints against chiropractors are initially funneled to the Agency for Health Care Administration (AHCA) for review. If the complaint is legally sufficient, it is referred to an AHCA attorney under contract to the Department of Health to perform prosecutorial functions before the Board of Chiropractic Medicine. The attorney investigates the case and brings his/her findings before a probable cause panel. The panel consists of two members of the Board of Chiropractic Medicine and the Board's counsel, who is an Assistant Attorney General. If there is probable cause, the case moves forward. Ultimately the chiropractor can (1) enter into an agreement with the prosecutor, (2) request an informal hearing before the Board, or (3) request a formal hearing before the Hearing Officer. In all cases where the behavior has been proven or admitted, the chiropractor comes before the Board which ultimately imposes the discipline.
2. The Florida Bar
The numbers are not much different when we examine the situation with lawyers. Complaints against attorneys are made to the local Florida Bar office. If the complaint is found to be legally sufficient it is referred to the local Bar Grievance Committee, made up of six lawyers and three lay members. The committee may assign a bar investigator to assist in the investigation. If the investigation determines that an ethical violation has occurred a formal complaint is filed. Upon filing the complaint, the Chief Judge of the Supreme Court appoints a referee (a sitting judge) to hear the complaint. If the matter proceeds to a hearing the referee will recommend the discipline to be imposed. Either party may appeal that recommendation to the Supreme Court of Florida.
Complex problems require innovative solutions and constant attention. The Florida Legislature, the Department of Insurance, The Board of Chiropractic Medicine, The Florida Bar, the insurance industry, law enforcement, and prosecutors have provided both, in varying degrees. We are grateful that all representatives of the professional, commercial, and regulatory groups who appeared before us were forthright about the obstacles which have made even their best efforts ineffective in stemming the tide of this illegal and detrimental activity. By way of encouraging a fresh look at prevention and deterrence options, we urge consideration of the following recommendations, which we believe will close the gaps, tighten the reinforcements, and provide financial and professional disincentives to continued PIP fraud in Florida.
1. Amend Florida Statute 119.05, Protection of victims of crimes or accidents, to prohibit the release of accident reports to anyone other than the victim, their insurance company, a radio or TV station licensed by the FCC or a professional journalist as defined in F.S. §90.5015. This will close the door to access by solicitors with no legitimate need for the reports.
Amy L. Romero
Download PDF version of Exhibit 1 Download PDF version of Exhibit 2 You will need the Adobe Acrobat Reader to view the Adobe Acrobat (.pdf) file. The reader is available at no charge from Adobe at Adobe.com
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