Personal Injury Protection (PIP) litigation in Florida

After a motor vehicle accident, those who were injured need funds immediately to pay for medical bills. Under Florida law, auto insurers must provide a maximum of $10,000 of personal injury protection (PIP) in order to make certain that victims can access the healthcare that they need. It is possible to acquire such coverage regardless of who is responsible for the crash.

Usually, PIP insurers are required to pay for medical expenses within 30 days. This “prompt payment” requirement is welcome news to insureds who suffer injuries and the health care providers who treat them. However, in some cases, the medical bills may be unreasonably high.

In the event a health care provider’s bill is excessively high, payment made on the basis of the billed amount would exhaust the insured’s PIP benefits. The depletion of benefits could render injured insureds without sufficient funds remaining in PIP benefits to finance other needed care. In an attempt to remedy this issue, insurance companies are required to only have to pay a reasonable sum for the care that was provided. In many instances, a jury decides what constitutes a reasonable amount.

After years of litigation between health care providers and insurance companies regarding what healthcare charges are considered reasonable, lawmakers have amended the PIP statute to say that, “insurers may limit reimbursement to 80 percent of the schedule of maximum charges.”

In response, medical providers filed lawsuits against PIP insurers in an effort to seek payment of diminished claims. Finally, the Florida Supreme Court held that there is a requirement of notice to the insured in order for the insurer to restrict its payment to the scheduled rates.

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As a result, insurers promptly revised the language contained in their policies. Now, the language of each insurer’s policy will have to be reviewed for ambiguity. Hopefully, however, this change in PIP organization will provide clarity to medical providers, insurers and insureds about what are considered reasonable medical charges.

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