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The Advent of Paper IMEs in No-fault Claims: Will They Be a Solution or a Problem?

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Illustration of man standing on car using an umbrella//Joe McFadden In 1971, Florida made monumental changes in the way that automobile insurance claims were handled; the legislature enacted the Automobile Reparations Reform Act.1 The purpose of this act was to provide Floridians with no-fault insurance that would provide swift payments of certain types of claims, without regard to fault. Written into the statute for the benefit of the insurers was a section designed to control the cost of personal injury protection (PIP) claims, known as an independent medical examination (IME), contained in F.S. §627.736(7)(a).2 Insurers could require their insured to attend a compulsory medical examination with a doctor of their choosing. If an insured unreasonably refused to attend, an insurer could withdraw from providing coverage and would no longer be liable for subsequent benefits under F.S. §627.736(7)(b).3

Many medical providers, however, began using a practice known as bulk billing. Providers would treat the claimants for billed amounts near the policy limits, then submit the bills all at once before an insurer was notified of the loss. Bulk billing deprived many insurers of their opportunity to obtain the proof they needed to contest the validity of any rendered treatment. It also deprived insurers of their statutory rights to rescind coverage, due to an insured’s unreasonable failure to cooperate with the IME requirement. In response to an increasingly powerful insurance lobby, the PIP statute has been amended numerous times over the years. The amendments have placed greater and greater restrictions on treatment providers to curb the aforementioned abusive practices of bulk billing, skirting the IME requirement, and impeding the natural course of an insurer’s claim investigation process.4 Some of these reactionary changes have led to dramatic improvements,5 and others have called into question whether the no-fault law truly still serves its original purpose and remains constitutional.6

At the present, only 12 states mandate no-fault insurance: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota, Oregon, Utah, and Texas.7 No-fault insurance may be rejected by motorists in the “choice” states of Kentucky, Pennsylvania, and New Jersey.8 Could there be a reason why 35 other states choose not to offer no-fault insurance at all? Perhaps Florida motor vehicle owners may find that the current quid pro quo is not what Floridians originally “bargained” for. With the advent of legislative and judicial approval of insurers coming to rely on “paper IMEs,” the present-day version of PIP may be an unconstitutional deprivation of certain rights.

The Origins of Florida PIP
In 1971, Massachusetts became the first state to pass legislation that brought no-fault automobile insurance to its citizens. Later that year, Florida became the second state to do so.9 After this time, as many as 20 states came to require no-fault insurance, but five subsequently went on to repeal those requirements.10 The Florida Legislature, in coming to its decision to provide no-fault insurance for Florida citizens, elected to do so to accomplish several public policy goals: 1) assure that persons injured in vehicular accidents would be directly compensated by their own insurer, even if the injured party was at fault;11 2 ) lessen court congestion and delays in court calendars by limiting the number of law suits;12 3 ) end the inequities of recovery under the traditional tort system; 13 and 4) lower automobile insurance premiums.14

In exchange, an accompanying tort exemption was enacted.15 This exemption would allow liability insurers to strike down any claims for reimbursement of bills for medical treatment rendered greater than 20 percent. The exemption also applied to claims for noneconomic damages (pain and suffering) submitted to carriers under the bodily injury portion of the liability policy that could not pass a threshold requirement — suffering loss of a limb, permanent loss of a bodily function, permanent injury within a reasonable degree of medical probability, or permanent scarring or disfigurement.16 In 1971, the legislature had similarly attempted to create no-fault insurance with respect to claims for property damage.17

The Florida Supreme Court addressed the constitutionality of the no-fault property damage statute in the case of Kluger v. White, 281 So. 2d 1 (Fla. 1973). The provisions of F.S. §627.783 provided that motorists could elect basic coverage (liability only) and full coverage (liability and no-fault insurance).18 A damaged party involved in an automobile accident could not pursue a property damage claim against an at-fault tortfeasor unless the amount of damages exceeded $550. Kluger’s car would cost $774.95 to repair, but that exceeded the fair market value (FMV) of the car, which was only $250. Her damages had to be limited to the FMV by law19 and, thus, were below the monetary threshold, barring her recovery.20 The Florida Supreme Court held that depriving her of due process accordable to the $250 FMV amount violated her equal protection rights under Fla. Const. art. I, §2, and the U.S. Const. amend. XIV, §1. In so doing, the legislature deprived her of access to courts under Fla. Const. art. I, §21.21 The Florida Supreme Court subsequently held that F.S. §627.738 was unconstitutional as written, because the legislature eliminated a constitutionally protected remedy without providing a reasonable alternative.22

In Lasky v. State Farm Ins. Co. , 296 So. 2d 9 (Fla. 1974), appellants raised similar arguments contending they were deprived of their rights guaranteed under the Florida and U.S. constitutions, because F.S. §§627.736 and 627.737 denied the parties access to courts — a violation against equal protection. Nonetheless, the Florida Supreme Court upheld the constitutionality of the Florida no-fault PIP law.23 To do so, the court struck the portion of the statute, which imposed a $1,000 threshold.24 In this way, it was able to distinguish its treatment of PIP law from Kluger.25 The court held that

[i]n exchange for the loss of a former right to recover — upon proving the other party to be at fault — for pain and suffering, etc., in cases where the thresholds of the statute are not met, the injured party is assured a speedy payment of his medical bills and compensation for lost income from his own insurer, even where the injured party was himself clearly at fault.26

In so doing, the Florida Supreme Court sent a clear signal to the public: PIP is constitutional and it is here to stay.27

The First District Court of Appeal, in Dunmore v. Interstate Fire Ins. Co. , 301 So. 2d 502 (Fla. 1st DCA 1974), recognized that the quid pro quo turned on the assurance of a swift and speedy payment of medical bills and lost wages. Dunmore had submitted an application for PIP benefits, but the insurer denied the claim. Dunmore filed suit and secured a default judgment, which was later set aside by the trial court. The insurer acknowledged that it was responsible for making the payments, but argued that attorneys’ fees, as provided by F.S. §627.736, were not due. The district court held that the insurer was responsible for the paying the attorneys’ fees and costs as “[t]o rule otherwise would render the recently enacted ‘no-fault’ insurance statute a ‘no-pay’ plan — a result we are sure was not intended by the legislature.”28 For the nearly three decades that would follow, it would seem that the decisions of the Florida courts had followed in line with Dunmore ’s reasoning that a reasonable alternative to the rights that Florida citizens lost, required that PIP did not devolve into a “no-pay” plan.

The Initial Prohibition Against “No Pay”
The Third District Court of Appeal in Government Employees Ins. Co. v. Gonzalez, 512 So. 2d 269 (Fla. 3d DCA 1987), continued to reiterate the mandate that an insurer cannot unreasonably delay and avoid its burden to pay claims timely. Gonzalez had been seriously hurt in an automobile crash, and the hospital had a lien for its bills, but Gonzalez’s attorney requested GEICO reserve the entirety of the $10,000 in PIP benefits for the payment of Gonzalez’s lost wages. GEICO could not disregard a hospital lien,29 nor could it disregard a request to reserve benefits for lost wages. The district court observed that GEICO could have made a check payable to both the insured and hospital or filed an interpleader action within the 30 days30 to resolve the dilemma.31 The Third District concluded that the purpose of the legislative scheme is to “provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption” and that an insurer “cannot be permitted simply to stonewall its insured by retaining — and drawing interest upon — payments to which it is admittedly not entitled.”32

Eight years later, in Crooks v. State Farm Mut. Auto. Ins. Co., 659 So. 2d 1266, 1268 (Fla. 3d DCA 1995), the Third District was faced with a situation in which a bicyclist named Michael Crooks had been struck by a motorist insured by State Farm. State Farm refused to honor the claim, insisting that Crooks first submit an approved “in-house” PIP application form to State Farm, but Crooks failed to do so. Crooks filed suit after three months. State Farm quickly paid the claim thereafter and argued that the breach was technical and that no attorneys’ fees were due. Citing Dunmore, the Third District reversed the trial court, holding that to create an exception by allowing State Farm to refuse to honor the claim for failure to use its approved form, contravened the intent of the statute which is to “guarantee swift payment of PIP benefits.”33

The Fourth District, in Martinez v. Fortune Ins. Co. , 684 So. 2d 201, 202 (Fla. 4th DCA 1996), tackled the question of whether the portion of F.S. §627.736(4)(b) referring to PIP benefits being overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss meant that an insurer could delay paying a wage loss claim by demanding medical verification from the treating physician, even though written notice had been furnished. The district court noted that F.S. §627.736 had been amended 25 times since 1971.34 The district court, in discussing the rationale of the decisions in Dunmore and Crooks, held that this portion of the statute had remained intact, and that “the implied adoption by the legislature of the interpretation established in Dunmore is the most persuasive evidence of what the legislature intended.”35

In Amador v. United Auto. Ins. Co. , 748 So. 2d 307 (Fla. 3d DCA 1999), United Automobile Insurance Company sought to bypass the 30-day deadline provision by scheduling an examination under oath well after the elapse of 30 days. The insured did not attend and filed suit. United contended that on the authority of the Fourth District’s decision in Willis v. Huff, 736 So. 2d 1272 (Fla. 4th DCA 1999), attendance at an examination under oath is a condition precedent to coverage and that the insured was barred from filing a lawsuit due to his failure to comply with the examination requirement. United also attempted to argue that its policy defined the meaning of “reasonable proof.”36

The district court disagreed and cited to the precedent decisions of Dunmore and Crooks.37 It held that while attendance at an examination under oath is a condition precedent to coverage, under the facts of this case, an insurer’s late request for an examination could not be used to toll the deadline, which had already passed, because this would allow an insurer to use “investigative rights to extend the 30-day period without reasonable proof that it is not responsible for the claim.”38 However, it should be noted that a recent decision has questioned the validity of examinations under oath altogether in the context of PIP claims.39

Thus, from 1974 to 2000, 26 years had passed since the statute had been held constitutional. Relying on Dunmore, the courts seemed to remain committed to the prohibition against any interpretation of F.S. §627.736 that would turn PIP into a no-pay plan.40 That opinion would soon change.

The Dramatic Changes in PIP
Between the 1970s and the early part of the 1990s, because the “reasonable proof” in F.S. §627.736(4)(b)41 had not been well defined, the option an insurer initially had to attempt to control the cost of PIP claim was to resort to the use of an independent medical examination (IME), provided for in F.S. §627.736(7).42 If an insured unreasonably refused to attend, an insurer would no longer be liable for subsequent benefits.43 Lobbying on the part of the medical providers resulted in the 1987 amendment to F.S. §627.736(7)(a), which specified that insurers could only “withdraw” payment after obtaining a medical report based on a physical examination of the insured by a physician licensed under the same chapter and specialty as the treating physician.44

Other medical providers would resort to bulk billing to bypass the effects of IME provision altogether.45 This deprived the insurance companies of their opportunity to obtain the proof they needed to contest the validity of treatment,46 and their rights to deny a claim altogether, for an insured’s unreasonable failure to comply with the IME requirement.47 As a result of successful lobbying by the insurance industry, with the goal of stamping out this practice, the legislature amended F.S. §627.736 in 1998 to include a section which required that bills be submitted to an insurer within 35 days of treatment rendered or they will never be paid.48 The grace period will increase from 35 days to 75 days if a notice of treatment is sent to the carrier within 21 days of the initiation of treatment.49

The most significant legislative reforms occurred in 2001 and 2003, as changes were instituted,50 to curb other undesired practices on the part of claimants, medical providers, and their attorneys.51 F or example, PIP payments that are late are owed with interest prescribed by statute.52 Sometimes the attorney of an insured or a provider would bring a lawsuit seeking thousands of dollars in attorneys’ fees over a miscalculated payment that was short less than three dollars,53 more than likely due to a mathematical error on the interest. Additionally, some providers inflated billing by referring patients to unnecessary diagnostic procedures and testing.54 In some cases of PIP fraud, claimants had never seen the doctors having been solicited by runners, and phony patient logs were submitted to give the appearance to the insurer that the patient had been physically present and receiving the treatment the medical providers billed for.55 The amendments addressed these matters in part.56

Arguably, the most startling change was to F.S. §627.736(4)(b): An amendment to its language changed the interpretation of when an insurer had to have reasonable proof that it did not owe the claim.57 The opinion of the Fifth District in Jones v. State Farm Mut. Auto. Ins. Co. , 694 So. 2d 165, 166 (Fla. 5th DCA 1997), became one of the first decisions that departed from the direction in Dunmore. In Jones, State Farm questioned the necessity of a surgery the plaintiff Jones had undergone and sent him for an IME.58 While the Fifth District agreed that State Farm did not have the reasonable proof it needed to contest the claim within the 30-day period, it concluded that failure to obtain this proof did not forever bar the insurer from being able to contest the claim at a later time. It reversed and remanded the matter for further proceedings as to whether Jones could be required to attend an IME in a location not provided by statute.

Nonetheless, the Fourth District began to agree with the reasoning in Jones.59 The First District Court of Appeal aligned itself with the Fourth and Fifth districts.60 The Second District and Third District, however, adamantly resisted this interpretation and conflicted with its sister district courts.61 The conflict was certified, and the Florida Supreme Court quashed the decision of the Third District and agreed with the holding in Jones, that failure to obtain reasonable proof in 30 days does not bar an insurer from the right to contest the claim at a later time.62 The effect of this change, which was subsequently legislatively incorporated into the statute, was dramatic.63 This development begs the question: Is PIP still constitutional?

The Differences Between F.S. §§627.736(4)(B) and 627.736(7)(A)
Unlike F.S. §627.736(7)(a), an insurer relying on F.S. §627.736(4)(b) could use a medical doctor licensed under Ch. 458 to conduct a “peer review” of the medical bills of a chiropractor licensed under Ch. 460. They could likewise use a neurologist licensed under Ch. 458 to review the medical bills of an optometrist under Ch. 463. There is no prohibition in place to limit one type of specialist from reviewing the treatment rendered by another type of specialist.64 No court to date has ruled that the use of experts outside of the treating physician’s specialty cannot constitute “reasonable proof” as a matter of law. The issue seems to be one of first impression as of the writing of this article.

Unfortunately, although such a requirement appears in F.S. §627.736(7)(a) that a reviewing physician be of the same licensing chapter as the physician whose bills are in question no such requirement appears in F.S. §627.736(4)(b). Since the Florida Legislature could have included such language in F.S. §627.736(4)(b), and since no “valid report” is required, it stands to reason under the statutory rule of construction expressio unius est exclusio alterius, that no chapter licensing restriction applies to a reduction or denial based on reasonable proof that treatment rendered is not reasonable, related, and necessary.65

Additionally, where F.S. §627.436(4)(b) is used, “[t]he statute does not limit ‘reasonable proof’ to a ‘medical report,’”66 whereas cases addressed under F.S. §627.736(7)(a) do require a medical report, specifically a “valid report.”67 “Subsection (7)(a) only requires that a valid report be obtained when further benefits are withdrawn” without the injured party’s consent.68 Furthermore, “[w]ithdraw means ‘to take back or away (something bestowed or possessed).’”69

In 2009, there were numerous cases in the district courts of appeal which undertook a directed effort to address conflicting decisions regarding F.S. §627.736 in the circuit courts.70 Some of that confusion arose from a misinterpretation of existing law precedent involving whether an insurer must always obtain a physical examination pursuant to F.S. §627.736(7)(a) before failing to make payments on claims within 30 days of receipt.71 It would seem that “the thirty-day period in section 627.736(4) applies only to benefits [that] are reasonable and necessary as a result of the accident.”72 The Third District had begun to finally acknowledge what other district courts and the Florida Supreme Court had already held.

In 2000, the Fourth District additionally held that when an insurer fails “to obtain proof that it is not responsible for payment, [that] does not deprive the insurer of its right to contest payment.”73 A year later, in United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82, 83 (Fla. 2001), the Florida Supreme Court reviewed two consolidated cases from the Third District Court of Appeal.74 The Florida Supreme Court quashed the consolidated decision, concluding that the holding that “the insurer can no longer contest the claim” when it fails to obtain reasonable proof within 30 days “violates the plain language of the [l]aw.”75

The Rodriguez case confirmed the understanding of the approach of many district courts that had always interpreted the statute as not shifting the evidentiary burden from the claimant-plaintiff to the insurer-defendant, contrary to the position advocated by some PIP litigators.76 As an extension of this understanding, the Second District had held in 2008 that an insurer is not required to “first” obtain a physical examination complying with F.S. §627.736(7)(a) within 30 days, to reduce or deny payments on services that are not reasonable, related, and necessary under F.S. §627.736(4)(b).77 The Fourth District followed suit with a similar position in 2009.78 In 2009, the Third District began to align itself with the other courts: An insurer may at any time challenge whether treatment is reasonable, related, and necessary, and is permitted to rely on a report obtained pursuant to F.S. §627.736(7)(a) even when the report is obtained more than 30 days after the claim was submitted.79 Thus, where some bills are being rejected by an insurer, F.S. §627.736(4)(b) applies and does not require insurers to have a “valid report” before denying payment. Some insurers do not formally approve or authorize the course of treatment of the treating physician; therefore, the provisions of F.S. §627.736(7)(a), which deal with the withdrawal of benefits, often may not apply.80

A number of the 2009 decisions of the Third District were appealed on the grounds of an alleged conflict with the Second District’s decision in State Farm Mutual Auto. Ins. Co. v. Rhodes & Anderson, D.C., P.A., 18 So. 3d 1059 (Fla. 2d DCA 2008).81 Those cases had been pending review before the Florida Supreme Court and were previously subject to a stay,82 pending the determination of Custer Medical Center v. United Auto. Ins. Co., 15 So. 3d 580 (Fla. 2009).83 It had been the hope of the affected PIP litigators to convince the court that it is possible for an insurer to waive the right to contest and defend the claims. This would have been premised on a failure to obtain reasonable proof as well as an IME based on a physical examination within the 30-day time period. However, based on the aforementioned case law,84 it does not seem likely that the Florida Supreme Court will side with such arguments.

Is PIP Still Constitutional?
Now to answer the question posed earlier. Does the existence of PIP result in a lessening of the congestion of the court system? The statistics indicate that the volume of PIP litigation consistently increases yearly.85 Has PIP resulted in a reduction of automobile insurance premiums? Florida premiums for automobile insurance continue to rise and remain among the highest in the country.86 Additionally, there is evidence from Colorado’s repeal of its no-fault law that eliminating PIP would result in overall lowered automobile insurance premiums.87 Has PIP eliminated inequalities of recovery? If insurers are now permitted to use their vast resources to steer PIP claims they refuse to pay into litigation, this would not appear to differ from the bargaining and litigation process that occurs when medical bills are settled or litigated within the context of bodily injury liability claims and tort lawsuits.88 With the ability to contest the claim at any time, medical bills need not be paid timely.89 The only disincentive is the possibility an insurer will have to pay interest, penalties, and attorneys’ fees, but financially solvent insurance companies in Florida (the motto of one nonstandard insurer which was “deny, delay, don’t pay”), have the resources necessary to do so.90

Does PIP eliminate the necessity to bring a cause of action in many cases? As previously mentioned, PIP litigation has steadily risen year after year (though reduced in part from 2004 onward due to statutory addition of the presuit filing requirements), and the ability of insurers to contest claims without limitation will continue to create an increased need to bring causes of action to resolve PIP disputes. Does PIP provide for prompt reimbursement of their most essential out-of-pocket losses? PIP benefits may be contested indefinitely and paid years later, only subject to the statutory penalties.91 For example, a Target Market Conduct Examination performed by the Office of Insurance Regulation of a nonstandard insurer in Florida reported that during 2002, the insurer received over 6,034 new open PIP claims, “but as of December 2003, only 88 of these claims had been paid.”92

Therefore, it can be argued that the reasons articulated by the Florida Supreme Court in Lasky no longer exist and that the Florida no-fault law no longer serves a valid rational governmental purpose.93 Lasky presumed these conditions to be true, because it claimed to have no evidence to the contrary.94 We now have over 30 years of evidence with which to prove that the presumptions articulated in Lasky are presently invalid. After all, insurers are now free to retain an expert to prepare a report at any time; this expert need not even be licensed under the same chapter as the treating physician; this expert can review bills and reports years after treatment has been rendered in order to defeat the insured’s claim at trial.95

Florida is facing a crisis in PIP with alarming concerns about ambulance chasing; “swoop and squat,” and other staged crashes; patients being solicited and brokered by medical professionals, attorneys, cappers, and runners; bulk, phony, or inflated billing; unnecessary or inappropriate diagnostic testing; and fraudulently trumped up lawsuits.96 However, there is evidence that part of this fraud and abuse occurs due to the lure of PIP itself.97 “Costs associated with health care provider fraud and abuse are likely to be reduced if no-fault is repealed, because this problem is primarily associated with PIP claims, more so than liability claims.”98

The Florida Supreme Court has made it abundantly clear that when a right of redress in courts pre-exists the adoption of the Declaration of Rights of Florida’s Constitution, the legislature cannot abolish that right without providing a reasonable alternative. If the legislature cannot do this, then it must show an overpowering public necessity for its abolishment and no alternative method of meeting such public necessity. The Florida Supreme Court is required to declare PIP unconstitutional if it differs from the extent of PIP coverage that existed at the time of Lasky and Dunmore. If present day PIP payments are not swiftly delivered, then the public necessity for the coverage itself will evaporate.

Looking at the history of PIP and where it is today, it is uncertain whether the changes over the past several decades have truly been effective at remedying the problems of the past.99 Ron Poindexter, director of the industry-funded National Insurance Crime Bureau in Florida, has indicated about PIP that “it’s caused more lawsuits” and has become the equivalent of a “public feeding trough.”100 CEO Richard Parrillo of United claims that his company has spent about “about $80 million in the state over the past four years fighting lawsuits.”101

Nonetheless, Floridians are guaranteed access to the courts by our constitution. “The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.”102 The no-fault scheme withstood constitutional scrutiny because Floridians were provided with a reasonable alternative in the past that bettered their position — the automatic payment of PIP benefits. PIP was constitutional only because the loss of rights in tort had been compensated by the “swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption.”103 “[T]he provisions of Florida’s no fault law that denied a plaintiff the right to sue unless certain threshold damages existed was not a violation of access to courts because the right was replaced with the ability to recover uncontested benefits and an exemption from tort liability.”104

Despite the current problems, if the balance of power shifts too greatly in favor of insurers, they can easily recreate the harmful inequality of recovery that the Lasky court thought the legislation intended to eliminate. The courts should not simply uphold every legislative reaction to every perceived dilemma in the insurance industry.105 The result would transform PIP “into just another form of health insurance and disability insurance without limited time parameters to secure benefits for injured Floridians.”106

1 Ch. 71-252, Laws of Florida, §7.

2 Fla. Stat. §627.736(7)(a) (1971).

3 Fla. Stat. §627.736(7)(b) (1971).

4 Warren v. State Farm Mut. Auto. Ins. Co. , 899 So. 2d 1090, 1096 (Fla. 2005).

5 Id. (“We agree with the Fifth District that the [l]egislature’s objectives of reducing bulk billing and ensuring that charges covered under no-fault insurance are reasonable, necessary, and related to the motor vehicle accident are permissible legislative objectives, and that those objectives are reasonably related to the [30]-day requirement imposed upon certain medical providers.”).

6 United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82, 92 (Fla. 2001) (Lewis, J., dissenting) (“Taken to its logical conclusion, the majority’s rationale belittles the protections afforded to those insured under the no-fault statute, and equates statutory noncompliance by an insurer with a simple breach of contract. That is, the decision removes the statutory mandate that insurers make timely and proper payments.”).

7 Florida Senate Interim Project Report No. 2008-102, The Effect of Repealing the Florida No-fault Law at 8 (2007) [hereinafter Senate Interim Report No. 2008-102].

8 Id.

9 Florida Senate Interim Project Report No. 2006-102, Florida’s Motor Vehicle No-fault Law at 1 (2005) [hereinafter Senate Interim Report No. 2006-102].

10 Nevada (repealed 1980); Pennsylvania (repealed 1984; reenacted 1990); Georgia (repealed 1991); Connecticut (repealed 1993); and Colorado (repealed 2003).

11 Ch. 71-252, Laws of Fla., §7.

12 See National Car Rental v. Sanchez, 349 So. 2d 829 (Fla. 3d D.C.A. 1977).

13 Union American Ins. Co. v. Lee, 625 So. 2d 112 (Fla. 4th D.C.A. 1993).

14 See Smiley v. Nelson, 805 So. 2d 870 (Fla. 2d D.C.A. 2001).

15 Ch. 71-252, Laws of Fla., §7.

16 Hannah v. Newkirk, 675 So. 2d 112 (Fla. 1996).

17 Ch. 71-252, Laws of Fla., §7.

18 Kluger, 281 So. 2d at 2.

19 McDonald Air Conditioning, Inc. v. John Brown, Inc. , 285 So. 2d 697 (Fla. 4th D.C.A. 1973).

20 Kluger, 281 So. 2d at 1.

21 Id. at 3-4.

22 Id. at 5.

23 Lasky, 296 So. 2d at 23.

24 Id. at 20-21.

25 Kluger, 281 So. 2d at 13-14, 22.

26 Id. at 14-15.

27 Id. at 21 (“If, when the unconstitutional part of a statute is stricken, that which remains is complete in itself and capable of being executed in accordance with the apparent legislative intent, the valid portion of the statute will be sustained.”).

28 Dunmore, 301 So. 2d at 502.

29 Fernandez v. South Carolina Ins. Co. , 408 So. 2d 753 (Fla. 3d D.C.A. 1982) (holding that payment of bills subject to a hospital lien take priority over payment of other PIP benefits).

30 New York Life Ins. Co. v. Shuster, 373 So. 2d 916, 917 (Fla. 1979).

31 Gonzalez, 512 So. 2d at 270-271.

32 Id.

33 Crooks, 659 So. 2d. at 1268-1269.

34 Martinez, 684 So. 2d at 203.

35 Id.

36 Amador, 748 So. 2d at 307.

37 Id.

38 Id.

39 Custer Medical Center v. United Auto. Ins. Co. , 2010 WL 4340809 at *1, Case No. SC08-2036 (Fla. Nov. 4, 2010) (“A purported verbal exam under oath without counsel in the PIP context is invalid and more restrictive than permitted by the statutorily mandated coverage and the terms and limitations permitted under the statutory provisions.”). At the time of this writing, the Custer Medical Center opinion is now final, the Florida Supreme Court having denied all motions for rehearing on the matter.

40 See, e.g., Peachtree Cas. Ins. Co. v. Walden, 759 So. 2d 7 (Fla. 5th D.C.A. 2000).

41 Fla. Stat. §627.736(4)(b) (1971).

42 Fla. Stat. §627.736(7) (1971).

43 Allstate Ins. Co. v. Graham, 541 So. 2d 160 (Fla. 2d D.C.A. 1989); Tindall v. Allstate Ins. Co. , 472 So. 2d 1291, 1292 (Fla. 2d D.C.A. 1985); Griffin v. Stonewall Ins. Co. , 346 So. 2d 97 (Fla. 1977).

44 Fla. Stat. §627.736(7)(a) (1988).

45 Warren, 805 So. 2d at 1077-1078 (“The timely statement requirement also reduces the practice of bulk billing by some medical providers which occurs when treatments are rendered over a period of time and the insurer is subsequently billed for multiple treatments. In turn, this lowers the insurer’s cost of providing PIP coverage.”).

46 Id. at 1077.

47 Graham, 541 So. 2d at 162.

48 F la. Stat. §627.736(5)(c) (2009).

49 Id.

50 Fifteen-day demand letters were now required to be filed by all claimants prior to filing suit for a breach by an insurer. The maximum PIP deductible was reduced from $2,000 to $1,000. The deductible would now be applied to actual expenses rather than benefits payable. The policy limit could no longer be reduced by the deductible. Insurance companies were now allowed to consider various fee schedules in determining appropriate reimbursement rate for services billed. MRI centers now had to be licensed and accredited. As to the Health Care Financing Administration (HCFA) forms submitted by medical providers, the following were required by the new law: 1) They had to be signed by physician; 2) all form boxes had to be filled in, and any material omissions would invalidate the bill; 3) providers were required to use the correct current procedural technology code; 4) the physician’s license number had to be filled in box 31 on the form submission; and 5) providers could only bill for services incident to their practice.

51 Florida Department of Financial Services, Study of PIP Insurance Changes, Effect of Changes Pursuant to the Florida Motor Vehicle Insurance Affordability Reform Act of 2003 at 3 (2005). [hereinafter Study of PIP Insurance Changes ].

52 Fla. Stat. §627.736(4)(d) (2009).

53 United Auto Courts Report: A Fair and Balanced Review, Car Accident Lawsuit in Broward Court Seeks $2.59 Even After All PIP Benefits Paid,

54 Study of PIP Insurance Changes at 4.

55 Mark K. Delegal & Allison P. Pittman, Florida No-fault Insurance Reform: A Step in the Right Direction, 29Fla. St. U.  L. Rev. 1031 (2002).

56 The amendments provided for a uniform fee schedule for diagnostic and other types of treatment, mandated a disclosure and acknowledgment form be given by providers to claimants, imposed a requirement for a 15-day pre-suit demand letter prior to the commencement of litigation, which afforded insurers an extra grace period with which to resolve and pay claims with penalties and interest, cracked down on brokering and kickbacks and added a “sunset” provision that would repeal the no-fault laws, if not renewed after October 1, 2007. Study of PIP Insurance Changes at 3.

57 Ch. 2001-271, §6, at 2930, Laws of Fla.; Fla. Stat. §627.736(4)(b) (2004).

58 Jones, 694 So. 2d at 166.

59 AIU Ins. Co. v. Daidone, 760 So. 2d 1110, 1112 (Fla. 4th D.C.A. 2000) (“If the insurer has refused to pay the bill within [30] days and does not have reasonable proof to establish that it is not responsible, then the insurer is liable for [10] percent interest when the bill is paid. Failing to obtain proof that it is not responsible for payment, however, does not deprive the insurer of its right to contest payment.”).

60 State Farm Mut. Auto. Ins. Co. v. Jones, 789 So. 2d 504 (Fla. 1st D.C.A. 2001).

61 Perez v. State Farm Fire and Cas. Co., 746 So. 2d 1123, 1125-1126 (Fla. 3d D.C.A. 1999).

62 Rodriguez, 808 So. 2d at 87.

63 See United Auto. Ins. Co. v. Perez, 21 So. 3d 886 (Fla. 3d D.C.A. 2009) (reversing the decision of the appellate circuit court, holding that statute provided that the insurer could contest the claim at any time regardless of the expiration of the 30-day deadline).

64 Allstate Ins. Co. v. Garrett, 550 So. 2d 22, 24 (Fla. 2d D.C.A. 1989).

65 See United Auto. Ins. Co. v. Salgado, 22 So. 3d 594 (Fla. 3d D.C.A. 2009) (holding that the Florida no-fault law did not abrogate an insurer’s right of rescission because it was not on a specifically enumerated list of types of insurance listed in
Fla. Stat. §627.401).

66 Rodriguez, 808 So. 2d at 87.

67 Santa Fe Medical Center, 21 So. 3d at 65.

68 Id.

69 State Farm Mutual Auto. Ins. Co. v. Rhodes & Anderson, D.C., P.A. , 18 So. 3d 1059, 1064 (Fla. 2d D.C.A. 2008), citing Webster’s 3d New International Dictionary 2626 (1993).

70 See United Auto. Ins. Co. v. Santa Fe Medical Center, 21 So. 3d 60 (Fla. 3d D.C.A. 2009) (en banc); see also Partners in Health Chiropractic v. United Auto. Ins. Co. , 21 So. 3d 858 (Fla. 3d D.C.A. 2009); United Auto. Ins. Co. v. Metro Injury & Rehab Center, 16 So. 3d 897 (Fla 3d D.C.A. 2009).

71 See United Auto. Ins. Co. v. Viles, 726 So. 2d 320 (Fla. 3d D.C.A. 1998).

72 United Auto. Ins. Co. v. Bermudez, 980 So. 2d 1213, 1217 n.4 (Fla. 3d D.C.A. 2008) ( quoting Daidone, 760 So. 2d at 1112).

73 Daidone, 760 So. 2d at 1113.

74 United Auto. Ins. Co. v. Rodriguez & Perez v. State Farm Fire and Cas. Co, 746 So. 2d 1123 (Fla. 3d D.C.A. 1999).

75 Rodriguez, 808 So. 2d at 87.

76 Derius v. Allstate Indem. Co., 723 So. 2d 271, 272 (Fla. 4th D.C.A. 1998).

77 See State Farm Mutual Auto. Ins. Co. v. Rhodes & Anderson, D.C., P.A. , 18 So. 3d 1059 (Fla. 2d D.C.A. 2008).

78 See Central Magnetic Imaging Open MRI of Plantation, Ltd. v. State Farm Fire and Cas. Co. , 22 So. 3d 782, 784 (Fla. 4th D.C.A. 2009).

79 United Auto. Ins. Co. v. Millennium Diagnostic Imaging Center, Inc. , 12 So. 3d 242, 246-247 (Fla. 3d D.C.A. 2009).

80 See Santa Fe Medical Center, 21 So. 3d at 66-67.

81 Metro Injury, Case No. SC09-1946 (Fla. Jan. 5, 2010) (“The proceedings in this [c]ourt in the above case are hereby stayed pending disposition of Custer Medical Center a/a/o Maximo Masis v. United Auto. Ins. Co., Case No. SC08-2036, which is pending in this Court.”) However, it should be noted that the decision of Partners in Health Chiropractic v. United Auto. Ins. Co. , 21 So. 3d 858 (Fla. 3d D.C.A. 2009), has never been appealed.

82 Santa Fe, Case No. SC09-2100 (Fla. Jan. 5, 2010).

83 Custer Medical Center, review granted, 15 So. 3d 580 (Fla. 2009). An opinion was subsequently issued. See Custer Medical Center v. United Auto. Ins. Co. , 2010 WL 4340809 at *1, Case No. SC08-2036 (Fla. Nov. 4, 2010). However, the stayed cases were promptly disposed of by withdrawing the exercise of jurisdiction to hear them. See e.g. , Tamara Duncan v. United Auto. Ins. Co., Case No. SC11-210 (Fla. 2011) (disposing of the case and finding a lack of jurisdiction to hear this and many other “pipeline” cases that were accompanying Custer Medical Center).

84 See, e.g., Central Magnetic Imaging Open MRI of Plantation, 22 So. 3d at 784.

85 Senate Interim Report No. 2006-102 at 80.

86 Senate Interim Report No. 2008-102.

87 Senate Interim Report No. 2006-102 at 79-80.

88 See Ivey v. Allstate Ins, Co. , 774 So. 2d 679, 684 (Fla. 2000).

89 Rodriguez, 808 So. 2d at 87.

90 Wyatt Olson, The Friendly Ties of United, Broward/Palm Beach New Times, May 6, 2006, at 1, available at

91 Rodriguez, 808 So. 2d at 92 (Lewis, J., dissenting) (“The practical impact of this judicial rewrite is to sanction the practice of withholding benefits for extended periods of time without any basis whatsoever and then permit the contesting and litigating of minor aspects related to loss of wages and medical treatment rendered years earlier.”).

92 Senate Interim Report No. 2006-102 at 41.

93 Lasky, 296 So. 2d at 15 (“[The test] is whether the statute bears a reasonable relation to a permissible legislative objective and is not discriminatory, arbitrary or oppressive.”).

94 Id.

95 See Fla. Stat. §627.736(4)(b) (2009); Fla. Stat. §627.736(7)(a) (2009); United Auto. Ins. Co. v. Hollywood Injury Rehab Center, 27 So. 3d 743, 744 (Fla. 4th D.C.A. 2010).

96 See Second Interim Report of the Fifteenth Statewide Grand Jury, Florida Supreme Court Case No. 95,746, available at

97 Id. (“We find it difficult to believe any medical professional can render competent care to patients when the exercise of independent professional judgment is clouded by the lure of exorbitant profits.”).

98 Senate Interim Report No. 2006-102 at 79.

99 Sally Kestin & John Maines, For Some Florida Lawyers, Small Courtroom Wins for Clients Mean Huge Fees for Themselves, Sun Sentinel, Jan. 26, 2011, available at

100 Id.

101 Id.

102 Fla. Const. art. I, §21.

103 Gonzalez, 512 So. 2d at 271, citing Comeau v. Safeco Ins. Co. , 356 So. 2d 790 (Fla. 1978).

104 Nationwide Mut. Fire Ins. Co. v. Pinnacle Medical, Inc., 753 So. 2d 55, 59 (Fla. 2000), citing Smith v. Department of Insurance, 507 So. 2d 1080, 1088 (Fla. 1987).

105 Smith, 507 So. 2d at 1099 (Adkins, J. (Ret.), concurring in part, and dissenting in part).

106 Rodriguez, 808 So. 2d at 92 (Lewis, J., dissenting).

Woody R. Clermont is an assistant general counsel in the criminal division of the Office of the General Counsel for the 11th Judicial Circuit of Florida, and also serves as adjunct faculty in the paralegal studies program at Key College. He previously served as an assistant state attorney in the Miami-Dade County State Attorney’s Office as both an assistant chief of DUI and a juvenile division chief. He received his A.S. from the State University of New York at Empire State, his B.A. from Binghamton University, and his law degree from the University of Miami School of Law. The views expressed in this article are not necessarily those held by his employers.