Tag Archives: Insurance Policies

Florida Doctor Arrested for Allegedly Defrauding Nine Auto Insurers

According to a statement from the Florida Department of Financial Services, Dr. Celestino Santi was arrested for allegedly defrauding nine auto insurance companies our of more than $500,000 in unlicensed medical billing.

Investigators reveal that Santi was allegedly acting as a “straw owner” of Accident Care Center of Boggy Creek to disguise the identity of the unlicensed, true owner of the motor vehicle accident medical treatment center.

Click here to read the article.

Filed under Fraud, Personal Injury Protection (PIP)

Tesla Announced Launch of Its Insurance

Tesla announced the launched of its own insurance and claims that it will provide customers with lower rates because of the safety features in its vehicles. According to Tesla, “because Tesla knows its vehicles best, Tesla Insurance is able to leverage the advanced technology, safety, and serviceability of our cars to provide insurance at a lower cost.”

Click here to read the article.

Filed under Technology

Couple Denied Coverage After Water Heater Leak Under Policy’s Earth Movement Exclusion

Barbara and Charles Hatch had a water heater leak about 4,000 gallons of water flooding their home. Their insurance company, GeoVera Specialty Insurance Co., inspected the claim and issued payment to mitigate the damage. However, after then work had begun the Hatch’s discovered damage to the foundation and structure of the home.

Upon further inspection, GeoVera denied coverage based on the Hatch’s policy that excludes under the earth movement, which caused the foundation and structural damage. The district court ruled the structural damage to the Hatches’ home was excluded as the company claimed and GeoVera was entitled to summary judgment on that portion of the Hatches’ claim. In its decision, the district court explained that, under the policy, any damage caused by the accidental discharge of water from the water heater, including the structural damage to the Hatches’ home, was covered “unless otherwise excluded.”

Click here to read the article.

Filed under Property (Homeowners)

Update: Florida Governor Signs AOB Reform Bill

In recent years, lawmakers deliberated changes to the AOB process but could not reach an agreement, amidst heavy lobbying by groups on both sides of the issue. This year, however, the House and Senate came to an agreement and sent the bill to Florida Governor Ron DeSantis. DeSantis signed House Bill 7065 on Thursday, marking the end to a seven-year battle by the industry and reform advocates. This law takes effect on July 1, 2019.

Click here to view our earlier post on what the bill entails or contact us to discuss the implications of this significant change in Florida law.

Filed under Property (Homeowners)

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.

Filed under Property (Homeowners)

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.

Filed under Legislation, Property (Homeowners)

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. 

Filed under Personal Injury Protection (PIP)

Overreaching Assignments & Their Impact on Your Claims Handling

Recently, there has been an uptick in changes to the language in the assignment of benefit contracts which emergency mitigation companies are having Insureds sign.

One of the changes in the contracts is that the Insured’s execution of the assignment of benefits authorizes the carrier to not only directly pay them for their services, but to also include them on all checks regardless of the coverage they are for. For example, if the carrier pays the insured under Coverage A for repair, Coverage C for contents, or Coverage D for additional living expenses, this contractual language may require that the AOB company be listed on these checks.

A second change in the contracts is that the assignment of benefits may have a single sentence seeking to exceed any emergency services cap the carrier’s policy may have. Once the carrier receives this contract, the clock begins ticking on the time frame for the carrier to respond. If the carrier fails to respond within the timeframe detailed in the policy, this cap is waived.

With an influx of insurance claims due to recent natural disasters, being aware of these changes is key to how you handle these claims. Hopefully, this overreaching on behalf of the AOB companies will be the final push needed to have some laws passed to regulate this AOB realm.

If you have any questions on this issue, please feel free to contact our First Party Property Team at info@roiglawyers.com.

ROIG Lawyers attorneys have provided presentations on Assignment of Benefits as well as other areas that are beneficial to our clients in the Property Insurance industry. For more information on how to schedule a complimentary Continuing Education course via webinar or live presentation, please contact the Marketing Department of ROIG Lawyers.

Filed under Legislation, Property (Homeowners)

Helping You Navigate the Choppy Waters of Hurricane Claims

Our thoughts continue to be with all those affected by Hurricane Irma. We recognize many of you will face challenges in the days and weeks ahead. In staying true to our values of loyalty and teamwork, we want to let you know that ROIG Lawyers is here to help.

With the upcoming influx of property and insurance claims to be filed, top-of-mind awareness among claim handling professionals is key in identifying fraudulent and inflated hurricane claims.

We have a close-knit group of statewide First Party Property attorneys dedicated to providing quality and proactive legal services to our clients in the area of property defense. We utilize a proactive approach in which we litigate to property claims and moreover, if the need arises, we have experienced trial attorneys on our team ready to take files through trial.

We are also available to provide complimentary in-house CE courses to our clients and colleagues as a value-added service. We do this to ensure that our clients and prospective clients are making informed decisions based on the most up to date and relevant information. These are a few of the courses that may be of most interest to you and your team.

  • Public Adjusters and SIU, 2 credit hours
    This course will inform and update insurance adjusters on the role of a public adjuster when investigating a homeowner’s claim. The course will educate adjusters on the statutory authority for public adjusters as well as ethical requirements. Adjusters will be educated on common tactics and provided with examples of ways adjusters can assist with a fraudulent claim. Finally, adjusters will be educated on the potential pitfalls associated with alleging insurance fraud.
  • Water Mitigation Claims, 1 or 2 credit hours
    This course will provide a basic overview of the various requirements of water mitigation services pursuant to the Institute of Inspection Cleaning and Restoration Certification (“IICRC”). Specifically, the course addresses the types of machines used, the categories and classes of losses, and various SIU issues to be aware of when adjusting these types of losses.
  • Examinations Under Oath and the Law, 2 credit hours
    This course will inform insurance adjusters about examinations under oath and how and why they are used in practice. Additionally, the course indicates the information insurance adjusters should gather in anticipation of an Examination Under Oath.

If you have any questions, concerns, or to schedule a complimentary CE course, please contact the Marketing Department of ROIG Lawyers at marketing@roiglawyers.com.

ROIG Lawyers will continue to stand with you and as always, we thank you for standing by us.

ROIG Lawyers is a minority-owned litigation firm with a primary focus on Insurance Defense Litigation. We serve as primary counsel for numerous national and regional carriers and corporations related to all aspects of insurance litigation from seven offices throughout the state of Florida. ROIG Lawyers does not intend 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. E-mail list/s from ROIG Lawyers are intended to provide information of general interest to the public and are not intended to offer legal advice about specific situations or problems.  You should consult a lawyer with regard to specific legal issues that require attention.

Filed under Property (Homeowners)

Insurance Agent Allegedly Sold Fraudulent Insurance Policy

According to the Palm Beach Post, Fred Thomas Jr., 39, is facing charges of fraud and embezzlement between $300 and $2,000 after he allegedly sold a Palm Beach County woman fraudulent/fake car insurance during a three-year period. Thomas was arrested by the Florida Highway Patrol on Interstate 95 for driving with a suspended license when the trooper found an active warrant for Thomas in the insurance fraud case.

Click here for the full article.

Filed under Uncategorized