Favorable Third District Court of Appeals Decision

Favorable decision from the Third District Court of Appeal upholding Defendant’s Proposal for Settlement and entitlement to attorney’s fees in a case where the Plaintiff claimed that the declaratory relief count filed along with a breach of contract count invalidated the Insurer’s Proposal for Settlement.

To read the appellate decision, click here.

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Filed under Fourth District Court of Appeals, Insurance

Jacksonville Roofer Facing Charges Related to Insurance Fraud & Failing to Begin Work

Jacksonville roofer and owner of Kinnecorps LLC, Roger Van Den Bosch, has been arrested and charged with insurance fraud, grand theft, uttering and failing to begin work. The roofing company has been under investigation since 2018 due to complaints from homeowners who signed Assignment of Benefits allowing their insurance companies to pay Van Den Bosch who in turn never completed the work.

Two other Kinnecorps employees, Van Den Bosch’s sister and girlfriend both face felony charges of uttering and knowingly notarizing a false document.

Click here to read the article.

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Filed under Insurance Fraud

Exciting New Assignment of Benefits Law Passes

My Post (3)

H.B. 7065 passed last week and Governor DeSantis has promised to sign it!

This is great news for consumers and insurers alike. The law is designed to curb the onslaught of assignment of benefits cases, which have plagued the courts for the last five years. The new law has a lot of moving parts. It also creates many new opportunities for insurers to save money and prevent these “AOB” claims from reaching the litigation phase. Our firm can assist you in designing protocols to avoid some of the traps created by the new law. While the new law can save insurers money, it also presents new challenges for insurers by creating new responsibilities and deadlines. However, before discussing any protocols, one must understand the underlying new issues and responsibilities for all parties.

THE NEW AOB REQUIREMENTS

Under the new law, the assignees (AOB companies) will be required to do many things they previously did not have to contend with.

The assignees now will have to:

  1. Put their assignment in writing. This will eliminate the theory of “equitable assignments” sometimes pled and argued by the assignees and accepted by some judges.
  2. Both the assignee and assignor will have to sign the AOB. Again eliminating the “equitable assignment argument.”
  3. The AOB must allow for rescission under certain circumstances by the insured.
    • Due to the timeframes involved, this most likely will only come into play with roofs or restoration contracts.
  4. The AOB must be provided to the insurer within three business days after the date of which the assignment is executed or the date on which the work begins, whichever is earlier.
    • The statute also provides for very specific means of delivery of the assignment to the insurer.
    • Insurers still will need to inspect right away before any water mitigation is completed.
  5. The AOB must contain a written, itemized, per-unit cost of the services to be performed by the assignee.

The AOB must contain a specific 18 POINT UPPER CASE AND BOLD WARNING to the insured regarding the insured’s rights.

AOB COMPANIES PROHIBITIONS

The assignees will not be allowed to:

  1. Charge a penalty for rescission.
  2. Charge a “mortgage processing fee.”
  3. Have a penalty for cancellation of the agreement.
  4. Charge an “administrative fee.”
  5. Under “urgent or emergency circumstances,” the assignee may not receive an assignment of post-loss benefits under a residential property insurance policy in excess of the greater of $3,000 or 1% of the Coverage A limit under the policy.
  6. Assignments that don’t comply with this subsection are invalid and unenforceable.
    • Arguably any failures of the assignee to comply with the above provisions would provide the insurer a very sound affirmative defense, that the AOB is completely invalid and unenforceable.
    • This could potentially be a Motion for Summary Judgment issue as well.

NEW DUTIES FOR THE ASSIGNEE/AOB COMPANIES

Under the new law the assignees will now have to:

  1. Maintain records of all services.
  2. Cooperate with the insurer in the claim investigation.
  3. Provide the insurer with records and documents.
  4. Deliver the executed AOB within three business days.
    • A potential affirmative defense and Motion for Summary Judgment issue.
  5. Update the insurer with revised estimates.
  6. Perform work in accordance with “industry standards.”
  7. Submit to recorded statements and EUO’s pre-suit under certain circumstances.
    • A potential affirmative defense and Motion for Summary Judgment issue.
  8. Participate in appraisal and/or mediation under certain circumstances.

Additionally, assignees:

  1. Cannot modify managed care provisions under the policy.
  2. Cannot file suit until a written notice to initiate litigation has been served to the insurer.
    • The notice must contain certain information and has specific timing requirements.
    • A potential affirmative defense and Motion for Summary Judgment issue.

INSURERS NEW DUTIES

The insurers will also have some new obligations under the new AOB law.

The insurers now will have to:

  1. Have a provision in the policy for delivery of the AOB agreement.
  2. Respond in writing to the notice to initiate litigation within ten business days.
    • In the response, certain information must be present.
  3. Have procedures in place to respond to the notice to initiate litigation.

NEW POLICY OPTIONS FOR INSUREDS

Insurers may opt to provide policies in which the insured is not allowed to assign their rights under the policy to another. There are strict criteria which the insurer must follow in order to offer such policies. However, the price point will be lower, which will offer an incentive to most insureds to want to opt for this policy, rather than the one in which an AOB is allowed. Hopefully, this voluntary option selection by the insured will allow this provision to withstand any challenges in the courts.

I predict in the future most insureds will opt for these less expensive policies, which will allow insurers to pass the savings along to the consumers.

ATTORNEY’S FEES

The law also totally changes who will be considered the “prevailing party” for purposes of attorney’s fees, depending on an analysis of the judgment amount and the “disputed amount.” If the judgment is less than 25% of the “disputed amount” the insurer is entitled to an award of reasonable attorney’s fees. If the judgment is between 25% and 50% of the “disputed amount” no party is entitled to attorney’s fees. Only when the plaintiff (AOB company) receives a judgment of 50% or more over the “disputed amount” are they entitled to attorney’s fees.

This section dramatically changes the “risk/reward” structure previously involved in these cases. In the past, insurers have settled these cases, to avoid paying exorbitant attorney’s fees. There is a provision which states that the insurer can waive its right to fees under certain conditions if the insurer fails to inspect or provide authorization for repairs.

The statute also allows for potential attorney’s fees to the insurer if the assignee files a voluntary dismissal and then refiles a second case. Unfortunately, the statute gives the court discretion in this instance.

INSUREDS OBLIGATIONS

The new AOB law also codifies what probably was considered common sense and already law.

The insured must:

  1. Pay the deductible under the policy.
  2. Pay for any betterment ordered.
  3. Pay for any work done before any rescission by the insured of the assignment.

We believe we can help you predict the future strategies of the plaintiff’s attorneys, who are already plotting to exploit the perceived loopholes in the new law. Some may argue the law does not even apply to their clients. Some may file suit prematurely. Some will undoubtedly make constitutional challenges.

If you wish to have our firm present some protocols to help you navigate through this maze of new legislation, please contact us at info@roiglawyers.com.

This article is not intended to create an attorney-client relationship by offering this information, and anyone’s review of the information shall not be deemed to create such a relationship. The content provided is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. You should consult a lawyer with regard to specific law issues that require attention.

For additional information, please contact Jeffrey Tutan of Roig Lawyers at 954-354-1546 or by email at jtutan@roiglawyers.com. Jeffrey is a partner in the Deerfield Beach office of Roig Lawyers, head of the firm’s trial division and co-chair of the first party property division.

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Filed under Assignment of Benefits

Miami-Dade Public Adjusters Facing Charges for Insurance Fraud Ring

Public adjuster Barbara Gonzalez and at least eight more suspects were arrested in insurance fraud ring in Miami-Dade. Gonzalez ran a public adjusting company Rubicon Group and the alleged ringleader of the fraud scheme.

Gonzalez’s charges include a $75,000 claim for fake water damage and repairs from a plumber that did not exist. She is also on the hook for three other false damage claims dating back to 2013.

Click here to read the article.

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Filed under Insurance Fraud

Florida Legislature Passes Assignment of Benefits Reform Bill

On April 24, 2019, by a vote of 25-14 the Florida Senate passed SB 122 that addresses AOB’s for residential or commercial property insurance claims and limits attorney’s fees related to AOB agreements. The Senate bill was a committee substitute for House Bill 7065, which passed the House on April 11, 2019. Governor Ron DeSantis is expected to sign the bill which would become law effective July 1, 2019. Click here to view the entire Bill: Florida SB 122/HB 7065

Contact us for more information or to discuss the implications of this significant change in Florida law.

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Filed under AOB, Assignment of Benefits

Fort Myers Woman Arrested for Insurance Fraud

Crystal Danielle Clarkson of Fort Myers was arrested for submitting false claims to her insurance company for treatments she did not receive. She sent 34 extra claims totaling $70,546.12 although she had only been seen by hospital medical providers two times. Clarkson is facing up to 30 years for charges of organized scheme to defraud, grand theft, insurance fraud.

Click here to read the article.

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Filed under Insurance Fraud

How Billing Processes of Florida Medical Providers for PIP Claims are Affected by the Thirty Third Amendment to Regulation 83 Under New York-Based Insurance Policies

The New York State Department of Financial Services (“DFS’) has finalized the Thirty-Third Amendment to Regulation 83 (the “33rd Amendment”), which was published in the State Register on October 25, 2017 and will affect treatment rendered on or after January 23, 2018. Pursuant to the accompanying press release, the 33rd Amendment is designed to “limit the amount that insurers can reimburse for healthcare services performed outside of New York State under its no-fault insurance law.”[1] By limiting reimbursement amounts for out-of-state no-fault healthcare services, which are treating New York State (“NYS”) residents, the DFS intends to “curb costs and abuses” by out-of-state medical providers charging excessive rates.[2].

Regulation 83, governing the reimbursement of out-of-state providers, previously provided that:

“If a professional health service is performed outside New York State, the permissible charge for such service shall be the prevailing fee in the geographic location of the provider.” (11 NYCRR § 68.6).

The case of Surgicare Surgical Assoc. v National Interstate Ins. Co., 2014 WL 6610048, 2014 N.Y. Slip Op. 24362) (Anthony Cannataro, J.), provides a good example of an out-of-state provider seeking reimbursement at an exorbitant rate, diminishing the coverage available to the insured for other medically necessary services. There, the provider performed arthroscopic surgery on a covered person in New Jersey and submitted a claim for reimbursement under the applicable New York No-fault policy. Although the state of New Jersey has a fee schedule that applies to the reimbursement of medical services under the New Jersey’s No-fault law, the provider submitted a bill to the insurer for approximately $5,000 more than the amount it would have been reimbursed had the claim involved a New Jersey auto policy and as a result, was governed by the New Jersey fee schedule. The insurer reimbursed the amount permitted under the New Jersey fee schedule, essentially maintaining that, pursuant to Regulation 83, the New Jersey fee scheduled reflected the permissible amount in the geographic area. The provider sued for the difference. After discussing the applicable regulations and policy considerations behind the enactment of the New York No-fault law, including the legislative intent of cost containment, a New York City Civil Court judge held that, “when services are rendered outside of New York but in a jurisdiction which utilizes a fee schedule, the insurer complies with Section 68.6 by paying the ‘permissible’ charge for that particular medical service, that is, the amount permitted by that jurisdiction’s fee schedule.” The provider appealed and the Appellate Term affirmed. See Surgicare Surgical Assoc. v National Interstate Ins. Co., 2015 NY Slip Op 25338 (App. Term 1st Dept. 2015).

In other instances, the amount sought by out-of-state providers has been tens of thousands of dollars above the amount that would be permitted under the New York Fee Schedule. Recognizing the potential for fraud and abuse, the Amendment provides an effective solution to the exploitation of the No-fault system by out-of-state providers and, adopts, to some extent, the holding in Surgicare and, by regulation, strengthens the limits placed on reimbursement of such providers. Specifically, the Amendment states:

11 NYCRR 68.6: Health services performed outside New York State

(a)(1) If a professional health service reimbursable under [section 5102(a)(1) of the] Insurance Law section 5102(a)(1) is performed outside this State, the amount that the insurer shall reimburse for the service shall be the lower of the amount charged by the provider and the prevailing fee in the geographic location of the provider with respect to services:

(i) that constitute emergency care;

(ii) provided to an eligible injured person that is not a resident of this State; or

(iii) provided to an eligible injured person that is a resident of this State who, at the time of treatment, is residing in the jurisdiction where the treatment is being rendered for reasons unrelated to the treatment.

(2) For purposes of this subdivision, emergency care means all medically necessary treatment initiated within 48 hours of a motor vehicle accident for a traumatic injury or a medical condition resulting from the accident, which injury or condition manifests itself by acute symptoms of sufficient severity such that absence of immediate attention could reasonably be expected to result in: death; serious impairment to bodily functions; or serious dysfunction of a bodily organ or part.  Medically necessary treatment shall include immediate pre-hospitalization care, transportation to a hospital or trauma center, emergency room care, surgery, critical and acute care.  Emergency care extends during the period of initial hospitalization until the patient is discharged from the hospital.

(b) Except as provided in subdivision (a) of this section, if a professional health service reimbursable under Insurance Law section 5102(a)(1) is performed outside this State with respect to an eligible injured person that is a resident of this State, the amount that the insurer shall reimburse for the service shall be the lowest of:

(1) the amount of the fee set forth in the region of this State that has the highest applicable amount in the fee schedule for that service;

(2) the amount charged by the provider; and

(3) the prevailing fee in the geographic location of the provider.

(c) If the jurisdiction in which the treatment is being rendered has established a fee schedule for reimbursing health services rendered in connection with claims for motor vehicle-related injuries and the fee schedule applies to the service being provided, the prevailing fee amount specified in subdivisions (a) and (b) of this section shall be the amount prescribed in that jurisdiction’s fee schedule for the respective service.

The 33rd Amendment separates treatment by out-of-state medical providers into the following two categories:

  1. Out-of-state medical services, which (a) constitute emergency care[3], (b) are provided to non-NYS residents, and (c) are provided to patients with a NYS domicile, who are currently living in the state where the treatment is being rendered, for reasons unrelated to the accident.
  2. Out-of-state medical services provided to a NYS resident, currently living in NYS.

There is one main difference between the two categories – which State’s no-fault fee schedule governs and must be utilized by the insurer when reimbursing the medical provider. Simply put, if the medical services fall into Category 1, the medical provider’s reimbursement will be capped at the No-Fault Schedule rate for the State and region wherein the services are provided. By contrast, if the medical services fall into Category 2, the medical provider’s reimbursement will be capped at the highest rate available under the New York State No-Fault Fee Schedule unless the State where the treatment is being rendered has an established fee schedule for claims related to motor vehicle-related injuries.

As such, section (c) of 11 NYCRR 68.6 would apply to medical services rendered in Florida as there is an established set of fee schedules within the Florida No-Fault Law. While the foregoing may be the general rule, there are nuances requiring attention.

The reimbursement rate for medical services is now capped at the prevailing fee in the geographical location of the provider unless the provider charges less. Thus, the 33rd Amendment now limits the prevailing geographical rate to that area’s local No-Fault Fee Schedule Rate. In other words, if x-ray services are performed in Miami, Florida the provider’s reimbursement is limited to the schedule of maximum charges as listed in the Florida No-Fault law for that geographical region (Miami) (i.e, 200% of Medicare Part B).

The medical providers and insurers also need to be familiar with the amendment’s definition of what constitutes “emergency care”’ and how it relates to reimbursement.

Example 1: If a person is transported to the Hospital as a result of a motor vehicle accident in Florida and that person lives in Florida but is covered by a New York policy, then that Hospital provider’s charges would be limited to 75% of the usual and customary charge pursuant to the Florida No-Fault Law’s schedule of maximum charges. Moreover, the emergency services doctor would be paid at its usual and customary charge which is generally the submitted charge.

Example 2: Compare to the facts that this same individual is involved in a motor vehicle accident in Florida on January 1, 2019 and is not transported to the Hospital. However, three days later they decide to go to the emergency room due to having neck and back pain related to the accident. Would these Hospital and physician services now be considered “emergency care”?  Under this amendment, it would not because the treatment was not initiated within 48 hours following the accident.

Now further compare these facts with the applicable schedule of maximum charges under Florida Statute §627.736(5) (2018) which states in pertinent part:

The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:

a. For emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.

b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges.

c. For emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community.

d. For hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services.

e. For hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.

In the situation listed in Example 2, the patient’s condition would not be considered “emergency care” and thus, payment would be made at 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services or 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.

Conclusion

In order to maximize recovery without running afoul of the new fee schedule mandates of the 33rd Amendment, Florida medical providers treating patients covered by New York No-Fault policies must be cognizant of whether the service rendered meets the definition of “emergency care.” What this amendment does clarify is that if medical services are rendered in Florida under a PIP claim brought under a New York policy, then the maximum amount to be paid to the medical providers for these services would be limited to Florida’s schedule of maximum charges.

[1] Press Release, posted October 10, 2017, http://www.dfs.ny.gov/about/press/pr1710101.htm

[2] Id.

[3] Under the 33rd Amendment, in order to constitute emergency care, the treatment must be initiated within 48 hours of the motor vehicle accident.

This article is not intended to create an attorney-client relationship by offering this information, and anyone’s review of the information shall not be deemed to create such a relationship. The content provided is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. You should consult a lawyer with regard to specific law issues that require attention.

For additional information, please contact Stephen Mellor of Roig Lawyers at 954-354-1541 or by email at smellor@roiglawyers.com. Stephen G. Mellor is a partner in the Deerfield Beach office of Roig Lawyers who primarily focuses on out-of-state policy claims for insurance carriers. 

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Filed under Personal Injury Protection, PIP, Uncategorized

Survey Finds More Insurers Fighting Fraud with Data Analytics

According to a survey by Coalition Against Insurance Fraud, insurers are turning to analytics to fight insurance fraud which they believe is on the rise. Of the 84 carriers surveyed, 65% reported an increase in fraud over the past three years, 10% said fraud decreased and 25% said it remained the same.

Survey results also say that 21% of the carriers plan to invest in artificial intelligence. There has also been an increase in the use of unstructured data.

Click here to read the article.

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Accused Fraudster Uses Delay Taxes While Victims Continue to Pay

According to the Federal Trade Commission, accused health insurance scammer Stephen J. Dorfman, CEO of Hollywood-based Simple Health Plans LLC, is using “procedural maneuvers” to delay turning over his firm to a court-appointed receiver, giving customers an opportunity to cancel their “worthless” insurance policies.

Dorfman and his company are being accused of duping customers into buying what they thought were comprehensive health insurance plans. Many of them are still paying millions of dollars a month for a product comprised of worthless discount plans and limited-benefit hospital indemnity coverage that pays no more than $3,200 a year.

Click here to read the article.

Click here for a related post.

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Filed under Healthcare Fraud

Orlando Woman Arrested for Arson and Burning to Defraud

Tondra Shenika Roberts was arrested for allegedly setting her car on fire on Christmas Eve. According to police reports, Roberts said the vehicle was supposed to be repossessed and she left the keys inside in case someone showed up to take it.

Investigators found the key in the ignition of the abandoned car as well as a box of matches on the driver’s seat and an empty Heineken bottle with a paper towel inside of it. Lab reports from the car came back positive for gasoline. Roberts said she filed an insurance claim for the damage.

Roberts is facing felony charges of arson and burning to defraud an insurer.

Click here to read the article.

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Filed under Fraud