Personal Injury Protection (PIP)

The Florida Supreme Court recently issued an opinion against GEICO, one of the largest insurance companies in the country, after its failed attempt to limit the amount of money doctors and other healthcare providers could recover for providing medical care and treatment to GEICO’s own customers who have been injured in traffic accidents.  GEICO hoped to capitalize on the 2008 amendment to Florida’s Personal Injury Protection (PIP) statute that limited reimbursements for medical services rendered to an insured based upon the Medicare fee schedules.

When big insurance companies get sued.

When big insurance companies get sued.

PIP requires insurance companies like GEICO to pay “reasonable expenses” for “medically necessary services.”  The law in question went into effect in 2008, permitting insurance companies to use the Medicare fee schedules as one of the possible methods of calculating reimbursements—but not the only way.

 WHAT DOES PIP COVER IN FLORIDA?

In Florida, PIP—or no-fault insurance—is supposed to pay expenses relating to “bodily injury” caused by an accident arising out of the ownership, use, or maintenance of a motor vehicle to anyone who is insured, or a relative of the insured, or any other person who is in the car, truck, or van of the insured at the time of accident.  In other words,  if I own a car, regardless of whether or not the accident is my fault, all of the people in my car have my PIP coverage available to compensate them for their medical bills and lost wages in the following ways:

  1.  80% of the medical expenses; and
  2.  60% of lost wages or work loss; and
  3.  Replacement services expenses; and
  4.  Death Benefits.

 PIP COVERS INJURED PEDESTRIANS

PIP will also provide insurance benefits to pedestrians who are struck by an insured vehicle.  For example, as an insurance claim lawyer, should I or someone else driving my car accidentally hit someone walking across the street, my PIP insurance would cover that person, even if the accident were not my fault, in the same ways it would cover victims in the vehicles:

  1. 80% of all reasonable and necessary medical expenses; and
  2. 60% of lost wages or work loss; and
  3.  Replacement services expenses; and
  4.  Death Benefits

The case in question involved a car accident resulting in an injury where two MRIs were ordered.   GEICO’s policy defined medical expenses as “reasonable expenses medically necessary,” including medical, surgical, dental, ambulance, nursing, rehabilitation, as well as prosthetic devices.  The bill for the two MRIs in question was $3,600.  Upon receipt of the bill, GEICO paid the bill, but limited its payment to 80% of 200% of the Medicare fee schedule, pursuant to the statute. The problem was that neither GEICO’s insured, nor the MRI facility that performed the diagnostic tests had agreed to that arrangement. The insurance policy did not state clearly that GEICO was going to pay the medical bills based only upon Medicare rates, an omission that affected both the injured party and the MRI facility that performed the tests, relying on the expectation of full payment. As an insurance claim lawyer, I believe this issue worked its way through Florida’s trial and appellate courts, finally coming before our Supreme Court, which had to weigh the competing interests of an insurance industry that wants to pay as little as possible against those of the medical community, which wants and deserves to be reasonably paid for services provided to a private patient, in contrast to the pennies on the dollar that Medicare pays. In determining whether or not a given medical expense should be considered as reasonable, the courts look to what doctors and hospitals customarily charge for the same services as well as what other providers in the community charge.

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 SUPREME COURT RULES AGAINST GEICO

GEICO never contested the reasonableness or necessity of the MRIs. It sought only to take advantage of the change in the law through its PIP policies—essentially by osmosis, rather than by clearly notifying its customers or the doctors, hospitals, and MRI facilities that treat those patients for injuries after accidents.   The Supreme Court found that insurance policies in Florida should be required to state clearly what benefits will be paid and how those benefits will be paid.  Ironically GEICO’s policy did just that, and nowhere did it state that would limit medical bill payments to Medicare rates.  Read the Supreme Court’s opinion in GEICO General Insurance Company v. Virtual Imaging Services, Inc. In my opinion, as a car insurance claim lawyer in Florida, this case is a victory for not only GEICO’s customers, but also for all Florida car and truck owners who are unfairly forced to purchase PIP insurance simply because we own or drive cars in Florida.  But Florida’s healthcare providers are the real winners in this case because all PIP really does is protect the medical industry by making sure that doctors and hospitals get paid (at least 80% of their bills) if they decide to render care to someone injured in a traffic accident.  Moreover, what this ruling does is protect doctors, not victims, and as an insurance claim lawyer, I am sure other Florida insurance companies will be making it crystal clear in their newly issued policies if they intend to limit payment in line with Medicare rates or some other arbitrary amount. In the end, PIP continues to serve as little more than a tax imposed upon all of us who own or drive vehicles in Florida, and it provides absolutely no compensation for the injuries, pain, disability, disfigurement, and suffering that accident victims and their families experience.  Florida requires PIP, but allows us to drive without Bodily Injury insurance or, even more importantly, uninsured motorist coverage to protect us and our families if and when tragedy strikes.

Our lawyers in Miami are experienced and aggressive in the pursuit of justice on behalf of our clients who have been injured or killed in a car, truck, bicycle, motorcycle, or pedestrian traffic accident.  If you have a question about your insurance coverage or a potential claim, Email me,insurance claim lawyer Spencer Aronfeld, or call our office at 305-441-0440 or Toll Free at 866-597-4529.  We answer questions, and we help people. Call us now.

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