Prepared By: Chris Longino, Field Information Analyst, Central Florida Major Medical Fraud Task Force. Background. Personal Injury Protection (PIP)

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1 Date: Regarding: Florida Personal Injury Protection (PIP) (External Dissemination) Prepared By: Chris Longino, Field Information Analyst, Central Florida Major Medical Fraud Task Force Background Personal Injury Protection (PIP) The state of Florida enacted no-fault, or personal injury protection (PIP), automobile insurance policies in Florida is one of 12 states with this type of coverage. The other states with similar coverage types are Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah. The intent of PIP insurance is to expeditiously settle claims involving minor injuries without the costs of litigation in determining fault. Initially, a $5,000 limit on PIP benefits was set for the state of Florida; this threshold was raised to $10,000 in An injured party in a PIP claim was entitled up to the $10,000 threshold in coverage of medical expenses regardless of his or her role in the accident. Over the last two decades, many legislative changes were made to Florida PIP, including recent changes implemented in 2013 in order to create anti-fraud provisions. PIP Fraud In 2009, Florida not only led the nation in PIP Questionable Claim (QC) referrals, but had twice as many as the next highest state, New York. 1 From 2008 through 2010, the total number of QCs in the state increased by 34 percent. According to the Florida Department of Financial Services, Division of Insurance Fraud (DIF), for fiscal year 2010/2011, 49 percent of the referrals they received were related to PIP fraud. When these statistics were brought before a PIP Working Group formed under the advisement of Florida Chief Financial Officer Jeff Atwater, further research was conducted to determine potential abuses and fraudulent activity with Florida PIP. These findings showed that about 62% of total PIP costs and about 43% of PIP treatment costs came from soft tissue treatments. Twenty-two percent of soft tissue treatments were massage treatments. From 2005 through 2010, massage therapists showed the largest increase in charges per patient, 51%, accounting for medical inflation. 2 These analyses, along with those above, led to legislative changes in the PIP system. Local Legislation Hillsborough County led the state in suspicious vehicle collisions by county in 2009 and 2010 but dropped to third by PIP claims accounted for a substantial amount of the total suspicious vehicle collisions. When law enforcement was asked about these decreases in Hillsborough County, they suggested that an increase in anti-pip fraud resources led to dispersion of fraud throughout the state. This was corroborated by the statistics 1 NICB ForeCAST Report regarding PIP, posted October 27, Florida Motor Vehicle No-fault Insurance, Office of Insurance Consumer Advocate, December NICB ForeCAST Report regarding FL Suspicious Vehicle Collisions, posted December 19, 2012

2 Page 2 of 9 as suspicious vehicle collisions increased in counties, which included Dade, Palm Beach, and Duval. 4 However, in addition to added resources, local law enforcement worked with the local government in Hillsborough County in order to pass legislation to assist in combating PIP fraud. On September 21, 2011, the Hillsborough County Commission passed a county ordinance with regulations for medical providers who treat patients through PIP. The intention of the ordinance was to decrease the number of suspicious vehicle collisions, or more precisely staged automobile crashes in Hillsborough County. A similar ordinance was enacted in Miami-Dade County in February the following year. However, on October 31, 2012, an injunction was filed against the Hillsborough Ordinance, which still stands as this report is written. State Legislation PIP reform continues to be a usual topic at the state level as well. The Florida legislature signed into law House Bill (HB) 119 on May 4, The enactment of this law was a two-part process. The first part, which took place on July 1, 2012, entailed stronger penalties for medical providers who commit PIP fraud, including a five-year license suspension and a ten-year restriction from PIP reimbursement. On January 1, 2013, the rest of the law was implemented, which limited injured parties to within 14 days after the accident to seek medical treatment, decreased PIP benefits of non-emergency PIP treatments to $2,500 (if a proper licensed medical provider determines the injuries to be an emergency medical condition the injured party is still entitled the original $10,000 in treatments), and disallowed massage therapists and acupuncturists to perform PIP treatment. 5 A lawsuit was filed by attorneys representing massage therapists and acupuncturists alleging the statute unconstitutional and asking for an injunction. This injunction was denied in district court. However, through a ruling based on an appeal to the Florida circuit court, the stay of injunction was lifted in March This was immediately followed by an appeal from the Florida Office of Insurance Regulation in April. On October 23, 2013, the injunction was lifted. Although future legal actions are probable, HB 119 is enacted as a law at the time of this report. Introduction The purpose of this ForeCAST Report is to analyze PIP QC referrals in the state of Florida. The QCs were referred to the NICB by member companies. The analysis in this report is aggregated QCs as they were referred to the NICB. Although this report illustrates changes over time, no actual causal analysis was performed. The data analyzed for this report includes all Florida PIP QCs referred from 2010 through All QCs were deemed Florida PIP QCs if the Loss State field contained FL and the Loss Type field was NFLT (no-fault). The data was analyzed by four categories: (1) overview of Florida PIP QCs, (2) loss location, (3) referral reasons and (4) zip code of medical providers. The loss location entails analysis of the loss city field. Referral reasons were ranked by the top PIP referral reasons. Additionally, referrals listing Staged/Caused Accident as a referral reason were organized by year. Finally, the zip code for medical providers listed in these QCs was analyzed to determine the top zip codes where medical providers from referrals are located. 4 NICB ForeCAST Report regarding FL Suspicious Vehicle Collisions, posted December 19, , Fla. Stat. (2013).

3 Page 3 of 9 This report is presented in the following sections: Section 1: Overview of Florida PIP QCs Section 2: PIP QCs by Loss Location Section 3: PIP QCs by Referral Reason Section 4: Medical Providers of PIP QCs by Zip Code Section 1: Overview of Florida PIP QCs Florida PIP QCs From 2010 through 2013, PIP QCs in Florida have increased by 22.86%. Both 2011 and 2012 increased from the previous year, 23.61% and 7.64% respectively. However, in 2013, PIP QCs decreased by 7.66% from 2012.

4 Page 4 of 9 Section 2: PIP QCs by Loss Location Florida PIP QCs by City The five cities with the most PIP QCs from 2010 through 2013 were Miami, Tampa, Orlando, Hialeah and Jacksonville. Overall, from 2010 to 2013, PIP QCs increased in Miami (56.86%), Hialeah (21.71%), Orlando (0.31%) and Jacksonville (620%). However, PIP QCs in Tampa decreased (61.56%) from 2010 to From 2012 to 2013, all 5 cities decreased in PIP QCs: Miami (26.08%), Tampa (5.12%), Orlando (8.02%), Hialeah (15.05%) and Jacksonville (24.05%). From 2012 to 2013, the total PIP QCs of all five cities combined decreased by a total of 20.13%.

5 Page 5 of 9 Section 3: PIP QCs by Referral Reasons Florida PIP QCs Referral Reasons The chart below shows the top-10 referral reasons for PIP QCs from 2010 through A PIP QC can have up to seven different referral reasons. From 2010 through 2013, the number one referral reason, Faked/Exaggerated Injury, was listed in 31.98% of PIP QCs. Florida Staged/Caused Accidents Staged accidents were a main focus in recent PIP legislation. From 2010 through 2013, 2,690 PIP QCs listed Staged/Caused Accident as a referral reason. This accounted for 17.43% of the total PIP QCs. In 2010, referred Staged/Caused Accidents accounted for 26.69% of PIP QCs; 19.88% in 2011, 16.62% in 2012, and only 8.29% in From 2010 to 2012, there was a gradual decrease in Staged/Caused Accident referred PIP QCs; 7.92% from 2010 to 2011 and 9.99% from 2011 to From 2012 to 2013, however, there was a 53.93% decrease in PIP QCs referred as Staged/Caused Accidents. Therefore, the overall decrease in Staged/Caused Accident referred PIP QCs from 2010 through 2013 was 61.82%.

6 Page 6 of 9 Section 4: Medical Providers of PIP QCs by Zip Code Analysis was performed to determine where parties involved in PIP QCs were allegedly obtaining medical treatment. When a medical provider was listed in a referred claim, the claim was then isolated by that provider s listed zip code. The analysis was conducted to determine how many providers listed in each referred claim were located in which zip code. Therefore, a referred claim was counted multiple times if multiple medical providers were listed. Also, if a medical provider was listed in multiple claims, that provider would be represented within each referred claim. The below table and maps indicate how many total referred claims listed medical providers located in each zip code. It should also be noted that no preference was given to zip code by either population or any other demographic. All zip codes were measured equally. Top 10 Zip Codes by Medical Providers of PIP QCs from The below chart ranks the top 10 zip codes of overall total of PIP QCs by medical provider from Seven of the top 10 zip codes with the highest total amount of PIP QCs by medical provider were in Miami, including all of the top five. The other three zip codes were in Hialeah, Tampa and Lake Worth. Although zip code (Tampa) ranked 3 rd in 2010, it dropped each year falling to 9 th, 13 th, and finally 20 th in Zip code (Miami), which ranked 1 st every year but 2010 when it ranked 2 nd, had an aggregate total 85.81% higher than the second ranked zip code, (Miami). Zip Code 2010 Rank 2011 Rank 2012 Rank 2013 Rank TOTAL (Miami) (Miami) (Miami) (Miami) (Miami) (Hialeah) (tie) (Miami) (tie) 79 4(tie) (Tampa) (Lake Worth) 43 7 (tie) (Miami) Maps for Medical Providers of PIP QCs by Zip Code The following maps illustrate the zip codes where the most PIP QC medical providers were located. The four maps include areas which contained at least one zip code with more than 77 claims (yellow). The areas represented in these graphs are Miami/Hialeah, South Florida/West Palm Beach, Tampa Bay and Orlando. Legend 1 to 24 claims 25 to 77 claims 78 to 184 claims 185 to 430 claims 431 to 800 claims

7 Page 7 of 9 Miami/ Hialeah Area Zip Codes Miami contained the zip code with the most PIP QCs represented, Furthermore, there were four additional zip codes in the area with at least 185 QCs represented. These five zip codes from north to south are: (Hialeah), (Miami), (Miami), (Miami) and (Miami). South Florida/West Palm Beach Area Zip Codes There were four zip codes in the northern part of South Florida with more than 77 PIP QCs represented. Of these zip codes, two were in West Palm Beach; one in Lake Worth and the other in Boca Raton. From north to south, the zip codes were (West Palm Beach), (West Palm Beach), (Lake Worth) and (Boca Raton).

8 Page 8 of 9 Tampa Bay Area Zip Codes The Tampa Bay area contained three zip codes, all in Tampa, where more than 77 QCs were represented. Two of the zip codes represented more than 184 QCs. These zip codes were and 33607, from north to south respectively. The third zip code was Orlando Area Zip Codes Two zip codes in the Orlando area represented more than 77 PIP QCs. These zip codes were, from west to east, (Orlando) and (Orlando).

9 Page 9 of 9 Conclusion Of the four years analyzed in this report, the only year to show a decrease in PIP QCs from the previous year was PIP QCs decreased by 7.66% from 2012 to Although PIP QCs were lower in 2013 than they were in 2012 or 2011, there were still 22.86% more PIP QCs in 2013 than there were in The largest percentage increase took place from 2010 to 2011, with an increase at 23.61%. From 2010 through 2013, Staged/Caused Accidents were the sixth most common Referral Reason for PIP QCs. The next most common Referral Reason was Prior Injuries; however, there were 79.21% more claims referred as Staged/Caused Accidents than Prior Injuries. The total number of Staged/Caused Accidents decreased each year from 2010 through The time range with the largest decrease was from 2012 to 2013 where Staged/Caused Accident referrals decreased by 53.93%. There was an overall decrease from 2010 to 2013 of 61.82%. The South Florida cities with the most PIP QCs were Miami, which ranked first overall, and Hialeah, which ranked fourth. From 2010 through 2013, Miami PIP QCs increased by 58.12%, even though the city showed a decrease in PIP QCs from 2012 to 2013 of 26.08%. Hialeah increased 22.48% from 2010 to 2013, but showed a decrease from 2012 to 2013 of 15.05%. South Florida also contained the most zip codes where PIP QC medical providers were located. There were 15 zip codes in the Miami/Hialeah area with at least 77 PIP QCs represented. Three additional zip codes representing more than 77 PIP QC medical providers were located in the northern area of South Florida. The zip code representing the most PIP QC providers was in Miami, which was zip code Two cities in Central Florida were also in the top five PIP QCs cities; Tampa and Orlando. Tampa had the second most PIP QCs from 2010 through 2013, but was the only city to show an overall decrease in PIP QCs from 2010 to 2013 of 61.56%. Orlando had the third largest amount of PIP QCs from 2010 through Orlando s PIP QCs also decreased from 2012 to 2013, but slightly increased from 2010 to 2013 at 0.31%. These Central Florida cities also included five zip codes with more than 77 PIP QC medical providers represented. Two zip codes with more than 184 PIP QC medical providers represented were in Tampa. Of the other three zip codes where more than 77 PIP QC medical providers were located, two were in Orlando and one was in Tampa. The only North Florida city in the top five PIP QCs cities was Jacksonville. Jacksonville had the highest increase of PIP QCs from 2010 to 2013 at 620%. However, Jacksonville also showed the second largest decrease in PIP QCs from 2012 to 2013 of 24.05%.