Atwater calls for ban on referral services
Atwater calls for ban on referral services
Senior Editor
Florida Chief Financial Officer Jeff Atwater has called on the Bar to ban lawyer referral services.
The CFO’s request came just days after the Bar’s Special Committee on Lawyer Referral Services — which has been studying the issue since March — began formulating its recommendations to deal with concerns involving referral services.
In a November 15 letter to Bar President Scott Hawkins, Atwater said individuals “disguised as legitimate referral services have been able to prey on society for so long” and perpetuate fraud, particularly related to medical and legal claims stemming from auto accidents.
“This must stop, and I believe the Bar is in the best position to expeditiously institute a permanent ban against lawyer referral services,” Atwater wrote.
The letter came four days after the Bar’s special committee discussed, but took no action, on a ban on referral services not linked to The Florida Bar or a local bar. Members of the special committee said they didn’t think such a ban would be effective. (See story, here. )
(Banning the services would also require a change in Bar rules, which requires action by the Supreme Court.)
“The proliferation of referral services over the past few years and the blanketing of the state of Florida with radio, TV, and print media advertising their ‘services,’ supports an immediate and aggressive stance by the Bar,” Atwater said in his letter. “I know that The Florida Bar is concerned with promoting the professionalism of lawyers in our state, pursuing justice, and making sure the public is neither misled nor misguided by members of the Bar. Florida’s citizens who have limited or no contact with the legal system rely upon the integrity of the legal profession and can be influenced by the pervasive advertising of these referral services.
“My department has received many confidential tips regarding the incestuous interactions between the participants in these referral services. It is intolerable for a quid pro quo relationship to exist between or among lawyers and healthcare professionals where the physical well-being of Florida’s citizens is concerned; not to mention the impact these improper relationships have on the cost of insurance premiums.”
Board of Governors member Grier Wells, who chairs the Bar’s Special Committee on Lawyer Referral Services, said Atwater may be asking too much.
“Just as we cannot regulate nonlawyers who may own referral services, the Bar cannot ban a referral service. We can make every effort to regulate attorneys who participate in referral services and to take steps to ensure that attorney participation complies with the Rules Regulating The Florida Bar,” Wells said.
“We can also examine our rules and recommend changes where the rules do not address attorney misconduct. Frankly, that is the mission of the Special Committee on Lawyer Referral Services and what we have been addressing since March of this year.”
Atwater’s letter didn’t mention it, but the special committee has made a distinction between not-for-profit referral services affiliated with the Bar or local bars and private, for-profit services. There has been no suggestion at the special committee’s two public hearings that there are any problems with bar-related referral services, which generally handle all types of cases. Most testimony has focused on private services, which typically handle personal injury and some auto accident cases.
Atwater’s letter came after news articles highlighted alleged problems with private referral services, including one of the highest profile services in the state.
On November 10, Bloomberg News Service ran a story, quoting confidential sources, saying the 1-800-ASK GARY medical and legal referral service was being investigated by the FBI and by the Division of Insurance Fraud, part of Atwater’s office. While ASK GARY refers to a variety of lawyers, all medical cases are referred to clinics run by Physician’s Group, Inc., which also owns the ASK GARY service.
According to that story, those clinics take in $70-to-$80 million a year and through ASK GARY spend $12-to-$13 million on advertising. Gregory Zitani, general counsel for Physician’s Group, said the company was unaware of any investigation, and another company attorney told Bloomberg the company complies with all laws and regulations.
Zitani testified at a June public hearing held by the Bar’s Special Committee on Lawyer Referral Services, and said essentially the same thing. He also said that attorneys who get referrals from ASK GARY are not required to send those clients to Physician’s Group if they need treatment.
A November 11 story in the St. Petersburg Times reported that the Division of Insurance Fraud was investigating medical and legal referral services to see if there was fraud related to insurance claims, including with Florida’s no-fault personal injury protection (PIP) program. PIP requires that at least the first $10,000 of a policy-holder’s treatments be paid by the insurance company.
No referral services were identified in that story, beyond noting the Bloomberg report on ASK GARY.
PIP fraud was the subject of a joint press conference between Atwater and Gov. Rick Scott on November 15. They noted in recent years the number of drivers in Florida has remained stable, and the number of accidents has declined. But at the same time the number of PIP claims has dramatically increased, as has the average payout.
While they didn’t specifically refer to medical or legal referral services, Scott and Atwater recommended a four-part solution that covered both PIP lawsuits and medical treatments.
According to a press release from Scott’s office, those four points are:
• “Fraud Prevention. Florida leads the nation in staged crashes and questionable claims, and often individuals not involved in the crash receive PIP benefits.
• “Litigation Reform. From 2006 to 2010, PIP-related lawsuits pending at year-end increased by 387 percent. Attorney fees often far exceed the value of the $10,000 coverage and the damage amounts in dispute.
• “Utilization and Provider Reform. Florida is above the national average in the amount of medical provider charges per claim and the number of procedures per claim. Florida must address fraud and abuse to reduce these occurrences.
• “Accountability. Governor Scott and CFO Atwater called for a plan to gather the data needed to evaluate the legislation’s overall effectiveness to stop PIP fraud and abuse and drive down rates.”
