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Ambulance-chasing lawyers could face felony charges under legislation passed by the Florida Legislature last week to crack down on no-fault auto insurance fraud. The bill, enacted in the final hour of the 60-day legislative session and now awaiting Florida Gov. Jeb Bush’s signature, also requires lawyers to notify insurance companies of intent to sue before filing suit. The only exception is when the carriers already have denied the claim, have reduced payment or have asked for more medical information. That would give insurers a chance to settle the claim without incurring plaintiffs’ legal fees. Insurers have complained that some lawyers file small “gotcha” claims when a payment is late, then collect tens of thousands of dollars in legal fees. “The claim may be $50, but if they prevail, they get legal fees,” says Oscar Gelpi, special counsel in the Statewide Prosecutor’s Office. Gelpi served as assistant legal adviser to a statewide grand jury that in September issued a blistering condemnation of auto insurance fraud. The new legislation implemented the grand jury’s recommendations and was supported by interests as diverse as the Academy of Florida Trial Lawyers, Insurance Commissioner Tom Gallagher, the insurance industry and the medical profession. But some personal injury lawyers, who aligned themselves with auto injury clinic owners and diagnostic imaging brokers, fiercely opposed the bill. A companion bill passed by the Legislature would restrict access to police accident reports, which the grand jury said are often used by doctors, lawyers, and clinics to solicit business. Open-records advocates expressed concern about how the legislation would affect legitimate access to those records. But Gallagher said the reforms would go a long way toward reducing insurance rates. “Auto insurance fraud probably costs the average family $200 to $275 a year in their automobile insurance,” Gallagher says. “We need to curtail as much of that as we possibly can.” PRIMARY CULPRITS The grand jury report blamed “greedy and unscrupulous legal and medical professionals” for fraud that was costing insurance companies, and eventually consumers, an estimated $1 billion in claims filed under the personal injury protection provisions of Florida’s no-fault insurance law. No-fault was designed to cut down on litigation by requiring drivers to carry at least $10,000 in personal injury protection insurance to cover minor injuries. But the grand jury found that some chiropractors, doctors and lawyers had turned the coverage into personal slush funds. The primary culprits, the grand jury report said, are chiropractors and physicians who hire runners to collect auto accident reports at police stations and then convince the accident victims to visit their medical clinics. The chiropractors and physicians then order expensive diagnostic tests, such as magnetic resonance imaging or video fluoroscopy, whether they are needed or not. Further increasing the costs, the grand jury said, are brokers who negotiate with MRI facilities to perform the imaging service at a cost of $350 to $450. Then the brokers bill the insurance companies for as much as $1,700 per test, with the brokers paying the facilities and pocketing the difference. The report said the brokers perform no useful service, since the doctor could refer patients directly to the MRI facility. MRI brokers countered that some imaging facilities are inferior, and that they refer clients only to the best ones. In a typical fraud case, the grand jury said, a runner would pick up a day’s accident reports from a police station, track down the victims and use high-pressure tactics to persuade them to see a chiropractor or doctor with whom they have referral fee arrangements. The runners often misrepresent themselves as insurance company officials. Sometimes the runners also refer accident victims to lawyers and auto body shops with whom they have similar deals. The medical professionals typically pay $250 to $500 per referral, with the lawyers and body shops paying somewhat less, the report said. LONG CLINIC LINES One of the people who called the problem to the attention of Statewide Prosecutor Melanie Hines was state Sen. Walter G. “Skip” Campbell, D-Tamarac, a plaintiff lawyer who says he used to notice long lines of people in front of a chiropractor’s office every morning when he drove to work. It was no mystery what was going on. “I kind of guessed,” Campbell says, “since the sign said ‘Personal Injury Car Accident Clinic.’ “ After the grand jury issued its report, Campbell sponsored the legislation implementing its recommendations and guided it through to passage. That meant reconciling conflicting interests between the trial lawyers, medical professionals and insurance companies. For instance, insurers, with Gallagher’s help, unsuccessfully tried to attach broad tort lawsuit restrictions. “You had so many special interests that any one of them probably could have derailed it,” Campbell says. Although the legislation had strong backing from the insurance commissioner and the statewide prosecutor, opposition from MRI brokers and their influential lobbyists caused problems. As a result, it was one of the last bills to pass before the Legislature adjourned, clearing the House at literally the eleventh hour — 10:48 p.m. Although insurance lobbyists were nervous, Campbell says he had assurances from legislative leaders that the bill would pass and he was not unduly concerned at the late hour. Within minutes after final passage, Sam Miller, vice president of the Florida Insurance Council, was in the press gallery distributing a news release hailing the reforms. “This package is the most significant auto insurance legislation in Florida in a decade,” the council declared. NEW PENALTIES AND RULES The final provisions raised the penalty for lawyers and medical professionals who solicit accident clients from a misdemeanor to a felony, and required pre-suit notice. In addition, the bill cracks down on MRI brokers, and caps fees for MRIs done for no-fault claims at about $1,000. Miller says that’s double what insurance companies normally pay for MRIs, but still well below the $1,700 that frequently is charged in South Florida. The legislation also requires all personal injury protection clinics to be registered with the state and to hire a doctor or health care practitioner; it places them under state regulation. Campbell says there currently are more than 400 MRI centers; only six are certified by the state. Miller says the new requirement for clinics to hire a qualified medical professional will keep them from being operated by unqualified people. “Now the swimming-pool cleaner guy could no longer run a PIP clinic,” he says. One of the most important and controversial provisions, contained in a companion bill, is a restriction on the release of accident reports. The grand jury said this was needed to deny runners access to the reports, which would cut off their ability to locate accident victims and direct them to medical clinics. Under Florida’s strong open-records law, it was easy for runners to obtain the reports. News organizations were opposed to any changes that might seal off any public information sources. LIMITED RECORDS ACCESS The final bill enacted by the Legislature leaves the records open to authorized news organizations, which are defined as newspapers and television and radio stations that are in the business of distributing daily or weekly news articles to the general public. Others could obtain the reports, but with names removed. Sixty days after the accident, the full report could be obtained. This selective access provision is expected to be challenged in court. Using false media credentials to obtain the reports would be a third-degree felony, carrying up to five years in prison. It also would be a third-degree felony to use accident information to solicit clients for doctors or lawyers. Soliciting clients was already a felony, but it was narrowly defined and rarely prosecuted. The new bill applies the penalty to any solicitation that is not an advertisement aimed at the general public. Releasing the reports to unauthorized persons also would become a felony. That last provision particularly disturbs Barbara Petersen, executive director of the First Amendment Foundation in Tallahassee. She says that the threat of a five-year prison sentence will make police officers reluctant to release reports to anyone, authorized or not. “They’re going to make us jump through incredible hoops,” she predicts. Although the bills had widespread support, efforts by the various interest groups to tweak them to their advantage slowed their passage. Campbell says he had to fend off insurance company efforts to limit attorneys’ fees. “They were trying to do some bad things,” Campbell said. “I was able to eliminate the bad things.” Still, nearly everyone seemed happy with the final product. Miller says the only concerted opposition came from a coalition of MRI brokers, auto injury clinics and a few lawyers who specialize in personal injury protection cases. “They fought this tooth and nail,” Miller says. “They probably spent hundreds of thousands of dollars.” Jack Cory, a lobbyist who represented MRI leasing companies, was in the rotunda between the Florida House and Senate chambers the day before the session ended, working against the bill and complaining that it had been rewritten at the last minute. “All it will do is put out of business honest, small, independent business people,” Cory protested. Paul Jess, general counsel of the Academy of Florida Trial Lawyers, said his organization supported the legislation after some improvements were made in it. But he cautioned that his members would be watching closely to make sure that insurance companies do not use the pre-suit notification requirement as an excuse to delay paying claims until they receive a notice. Jess expresses no sympathy for those who will lose business as a result of the legislation. “Any doctors or lawyers using runners to solicit accident victims will be unhappy,” he says, “but who the hell cares about them?” Randolph Pendleton is a free-lance writer based in Tallahassee, Fla.

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