May 2012, Florida – Florida is one of the last states to tighten up its legislation surrounding mandatory driver’s insurance. If you are a victim in an accident and you suffer injuries, insurers must pay you up to $10,000 to get medical treatment, regardless of who was responsible for the accident. It is this legislation that was so open to fraud and abuse — with claimants not only abusing the law and ramping up legal costs so they can claim more money, but with an industry growing up around the law based on “medical” treatments such as acupuncture and massage therapy.

What does the new law do?

Governor Rick Scott signed the law into office last week and now the law clearly specifies that accident victims must report an auto-related injury and look for treatment within 14 days of the accident. You can still receive up to $10,000 for emergency medical care, but for lesser injuries the cap has been lowered to $2,500.

Furthermore, the law explicitly states that in particular massage therapists and acupuncturists are no longer eligible, although chiropractic still makes the list. Not only has this law helped to curb insurance fraud, but is clearly a step against pseudo-science and quackery as well, although some would argue that this is not large enough.

But the new law is not without issues

Even though the new law is very diligent in curbing fraud and abuse, there are still loopholes where medical providers could charge insurers and the injured for certain services. This law will become effective on 1st July.

However, the actual list that determines which medical providers are approved as recipients of payouts only becomes effective on 1st January 2013. This might create a situation where insurers refuse to pay out on claims in the six months until the official list goes live, but the Governor and lawmakers have expressly stated that this problem is being dealt with.

Insurers may be given executive orders to make payouts, or a set of rules may be drafted and signed into power to cover the six month delay between the parts of the legislation that need to catch up with each other.

The law will also reduce insurance premiums

One other very positive side effect of the new anti-fraud legislation is that it will reduce insurance premiums. The law also takes into account the fact that insurers needed to charge higher premiums previously in order to cover the massive payouts that some “injured” people were claiming, as well as the money drain that was being funneled from their profits into the coffers of unscrupulous charlatans selling snake oil in the form of medicine.

Because of the burden that has been released from providers, the legislation will now also require them to reduce their premiums by at least 10% to start and at least 25% in January 2013.

All in all, the new law will help everyone to benefit who wants to use it legally. The only people who will lose out were the ones who were defrauding the system.

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