Report on Insurance Fraud Related
To Personal Injury Protection
IN THE SUPREME COURT OF THE STATE OF FLORIDA - CASE NO. 95,746
SECOND INTERIM REPORT
OF THE
FIFTEENTH STATEWIDE GRAND JURY
(This document has been re-formatted for the Internet)
I. INTRODUCTION
This is the second interim report of the Fifteenth Statewide Grand Jury. In this report we examine the issue of fraud in the personal injury protection insurance line (hereinafter "PIP" ). For the purpose of this report we define PIP fraud as follows: (1) illegal solicitation of accident victims for the purpose of filing for PIP benefits and motor vehicle tort claims; (2) brokering patients between doctors, lawyers and diagnostic facilities, as well as the attendant fraud, which can include the filing of false claims; (3) billing insurance companies for treatment not rendered; (4) using phony diagnostic tests or misusing legitimate tests; (5) inflating charges for diagnostic tests or procedures through brokers; and (6) filing fraudulent motor vehicle tort lawsuits.
We have taken testimony from a variety of sources including investigators from the Department of Insurance, Division of Insurance Fraud (DIF); insurance company fraud investigators; lawyers; chiropractors; representatives of the Board of Chiropractic Medicine; representatives of The Florida Bar; accident victims; MRI brokers; and individuals engaged in the practice of illegal solicitation. In our investigations of this criminal activity, we examined the types, extent, causes and effects of the illegal behavior. In this report we outline our findings and suggest recommendations to protect the public and prevent this fraud and abuse in the future
II. FINDINGS
A. SCOPE OF PROBLEM All drivers in Florida are required to carry a minimum of $10,000 in PIP insurance with a maximum deductible of $2,000. The object is to have all drivers and their passengers at least minimally covered for injuries suffered as a result of a motor vehicle accident. The $10,000 personal injury policy is intended to provide not only protection and peace of mind for the insured, it also relieves taxpayers from shouldering the burden of caring for injured drivers and passengers, who do not otherwise have health care insurance.
Unfortunately, a number of greedy and unscrupulous legal and medical professionals have turned that $10,000 coverage into their personal slush fund. Paying kickbacks for patients, abusing diagnostic tests, grossly inflating costs by engaging in sham transactions and filing fraudulent claims of injury, these individuals think nothing of enriching themselves by exploiting the misfortunes of others. The result is loss of coverage and marginal medical treatment for those who are injured, as well as higher insurance rates for all drivers.
Over 20 years ago a Dade County Grand Jury criticized this practice of "ambulance chasing." At that time, mandatory PIP coverage was only $1,000 not the $10,000 minimum we have today. Unfortunately not much else has changed as "ambulance chasing" is alive and well throughout Florida. Numerous investigations underway by DIF reveal that the practice of patient solicitation and brokering by organized groups of lawyers, medical professionals, and professional solicitors known as "runners" is occurring in counties as diverse as Duval, Hillsborough, Leon, Broward, and Palm Beach to name a few. Though patient solicitation is illegal, it is not necessarily a fraudulent act in and of itself. We see however, a strong correlation between illegal solicitation and the commission of a variety of frauds, including phony or inflated billing, unnecessary or inappropriate diagnostic testing, and trumped up lawsuits. 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. Correspondingly, lawyers who engage in perpetuating this practice, or who seek out the victims to encourage the lawsuits, are also challenged to uphold their professional standards while counseling their client.
We must pause here to say that we do not intend to cast aspersions on all personal injury lawyers, chiropractors, or other professionals who provide necessary and important legal and medical care to motorists and automobile passengers in Florida. This is not a condemnation of any lawful practice or the vast majority of professionals who abide by the law and their respective codes of ethics. We have, however, learned that the illegal behavior is so rampant that those who are acting illegally are causing tremendous harm to the citizens of this State. It is the conduct of this group to which our concerns are addressed. To the law abiding professionals, we direct our plea for assistance in combating this scourge.
Where illegal accident victim solicitation occurs, the bulk of the people solicited are those whose names appear in traffic accident reports. As discussed below, the wholesale availability of these reports is a major contributing factor to this illegal activity. The other major contributing factor, it seems to us, is that the laws prohibiting this conduct have been ineffective in providing strong enough consequences to prohibit it. Despite the best efforts of many individuals in both the legal and health care professions, there appear to be few consequences for doctors and lawyers caught soliciting. Prosecutions have been difficult and disciplinary actions are rare. The punishment imposed provides little disincentive, and the behavior is unabated.
B. RELEVANT FLORIDA STATUTES Florida has a variety of statutes in place to combat ambulance chasing" and the fraud to which it inevitably leads. Among the statutes are:
1. F. S. §817.234(8) (Solicitation) prohibits anyone from soliciting business for the purpose of filing a motor vehicle tort claim, or claims for PIP benefits. This statute was only recently amended to make it a third degree felony, punishable by up to five (5) years in prison.
2. F.S. §119.105 (Protection of Victims of Crimes or Accidents ) This statute is part of the public records law and while allowing access to anyone who wishes to view or to have a copy of police reports, it prohibits the use of such reports for a commercial purpose. Violation of this statute is punishable as a first degree misdemeanor, with up to one year in the county jail.
3. F. S. §817.505 (Patient Brokering Prohibited) makes it unlawful for anyone to pay anything, directly or indirectly to induce the referral of patients from a health care provider or facility, or to solicit any kind of payment directly or indirectly in return for referring a patient to a health care provider or facility. This statute is a third degree felony, punishable by up to five (5) years in prison.
Recent court decisions have weakened the legislative intent and effect of these statutes, and criminals have employed strategies to avoid the statutes altogether. Both of these factors indicate the need for some legislative change which we will discuss later in our report.
C. PATIENT SOLICITATION Investigations by the Florida Department of Insurance, Division of Insurance Fraud as well as the Special Investigative Units of various insurance companies have revealed a typical scenario for the solicitation of accident victims. The following paragraphs generally describe how patient solicitation occurs in Florida. [See also Exhibit 1]
Most traffic accidents in Florida result in an accident report being filed with the local law enforcement agency. Individuals called "runners" contact the law enforcement agency to pick up copies of all accident reports filed with that agency. The "pickups" occur anywhere from a daily to a weekly basis, depending on how quickly the agency makes the reports available to the public. Most of the time the runners have made arrangements with the local agencies to have all reports copied and ready to be picked up. A typical law enforcement agency may have hundreds of records copied and stacked waiting for pickup from up to a dozen runners on any given day. Because accident reports are public records under Chapter 119, Florida Statutes, law enforcement agencies have no choice but to comply with the requests.
The runners subsequently use the reports to personally solicit accident victims or to turn a list of victims' names over to a third party who will solicit. These solicitations generally take the form of either harassing or invasive telephone calls or intimidating personal visits to the insured's home. Whether by telephone or in person, the solicitor generally misleads the victims into thinking they are speaking to their insurance company and that the visit to a doctor or chiropractic clinic is mandatory. The runner will often also refer victims to an auto body shop and a lawyer, all in return for kickbacks. The biggest payoff, though, comes from medical professionals who typically pay between $250.00 and $500.00 to the runner per referral. Other times victims are induced to believe they will receive large settlements for their injuries, whether real or not, but only if they visit the specific doctor or chiropractor immediately. Some runners dispense with formalities and offer the victims money to visit the doctor or clinic.
Some runners pick up accident reports for so-called "accident journals." These periodicals have nothing in common with any legitimate newspapers or periodicals. They are nothing more than a list of the names, addresses and phone numbers of people involved in accidents which have been summarized from the accident reports. These "journals" are then sold to chiropractors and lawyers to be used for a mail solicitation, or to solicitors who will call or visit victims directly.
Once they appear for medical care, the victims are given a battery of diagnostic tests which rarely vary regardless of the reported injury. Some tests are of dubious value; others, like video fluoroscopy, we have learned, can be dangerous if not administered correctly. Whatever the test, they all have one thing in common; they're extremely expensive and are primarily for the purpose of draining PIP benefits.
Some doctors or chiropractors will in turn refer the patient to a lawyer with whom they have a business relationship. This typically does not involve a money exchange, rather the doctor will expect referrals back from the lawyer.
Last year, the Fourth District Court of Appeal announced its decision in Bradford v. State, 740 So.2d 569 (Fla. 4th DCA 1999). In that case the court upheld the constitutionality of F.S. §817.234(8) prohibiting patient solicitation, but only when the solicitation was done with the intent of filing a fraudulent PIP or motor vehicle claim. DIF has informed us that patient solicitation investigations and prosecutions around the state have been stalled in order to uncover these additional facts. One filed case in Duval County was dismissed on the basis of Bradford, and several major cases have not been filed because of this decision. We heard testimony that some runners, aware of the Bradford decision, openly and brazenly plied their trade.
Recently, the Fourth District Court of Appeal ruled in yet another solicitation case, Hansbrough v. State, (757 So.2d 1282 (Fla. 4th DCA 2000), that it was receding from Bradford and that in fact fraudulent intent was never an element of F.S. §817.234(8). While this decision puts the law back where it was prior to Bradford, the Fourth District Court of Appeal has in its opinion, asked the Supreme Court of Florida to review the case and determine whether fraud is, after all, a necessary element of F.S. §817.234(8).
D. ACCIDENT REPORTSProbably the single biggest factor contributing to the high level of illegal solicitations is the ready access to public accident reports in bulk by runners. These reports provide runners, and the lawyers and medical professionals who use them, the ability to contact large numbers of potential clients at little cost and with almost no effort. As a result, virtually anyone involved in a car accident in Florida is fair game to the intrusive and harassing tactics of solicitors. Such conduct can be emotionally, physically, and ultimately, financially destructive.
Pursuant to Florida Statute §119.105 all police reports, which includes auto accident reports, in the State of Florida are considered to be public records unless they are part of a continuing investigation. Once that investigation is complete, any citizen can request to inspect or copy any and all police reports within the possession of any law enforcement agency. Officials who fail to comply with the public records requests can be sued for costs and legal fees as well as be liable for a civil infraction. That statute, however, prohibits any individual from using the information contained within the report for a commercial purpose, including solicitation. Nevertheless, the law has been widely flouted by individuals engaged in the practice of solicitation, perhaps because a violation of the statute is only a first degree misdemeanor. We received as evidence a survey of law enforcement agencies in Southeast Florida, West Florida, and Central Florida which revealed that the majority of bulk accident reports are acquired by just a few categories of individuals, all tied to the solicitation trade. [See Exhibit 2]
Since December of 1998, the United States District Court for the Southern District of Florida has enjoined the enforcement of F.S. §119.105. In its order granting the preliminary injunction, the court held that Florida's law was an unconstitutional restriction on the First Amendment right of free speech. Sal Pellegrino, D.C. v. Michael J. Satz as State Attorney for Broward County, 98-7356-Civ. Since that time, runners have been able to acquire and use police reports for commercial purposes with impunity.
Some runners attempt to disguise their use of these police reports by claiming they would be used to publish what they called "transportation news" or "accident journals". These periodicals are nothing more than flimsy two or three page copies of a list of the names, addresses and phone numbers of accident victims, which information is summarized from the police reports. These "journals" are then sold at high prices to chiropractors, lawyers, auto body shops and even other solicitors for the specific purpose of soliciting the accident victims. This easy access to these reports so soon after the accident gives unscrupulous individuals an opportunity to directly contact victims of accidents with specific information about their accident.
Several states have struggled with many of the same issues we are facing and have taken action to restrict the dissemination of police reports to the general public. In 1994, Kentucky, for example, made accident reports confidential with few exceptions, including one for the media. The statute specifically banned the commercial use of these reports. Predictably, the statute was challenged as unconstitutional by a group of personal injury lawyers, chiropractors and an "accident journal" publisher. In that case, Amelkin v. Kentucky, 158 F.3d 893 (6th Cir., 1999), the Sixth Circuit Court of Appeals discussed the reasons and circumstances behind the Kentucky statute. The court wrote, "Accident reports soon became a prime source for attorneys and chiropractors in Kentucky to identify prospective clients. . . . The efforts to solicit potential clients through the procurement and use of accident reports became so incessant that those involved in traffic accidents immediately began receiving large stacks of direct mail solicitations from various attorneys and chiropractors." The court noted that because of these activities a ". . .public groundswell developed against the release of accident reports to attorneys and chiropractors. One editorial described the attorneys who used such accident reports as 'greedy, money grabbing lawyers' who seemed to 'prey on the misfortune of others.' Ky Bench & Bar, Summer 1993 at 7. In addition to the solicitations tarnishing the image of the legal community in the eyes of the public, some who received a mailbox full of such letters grew concerned over their personal privacy and safety." Amelkin at 896.
California has also sought to restrict the use of police reports for commercial purposes including solicitation. In 1996, California amended its statute to authorize the release of police reports to individuals only when those individuals sign an affidavit under penalty of perjury that they will only use the information for one of five prescribed purposes, and that the information will not be used directly or indirectly to sell a product or service. California Government Code §6254(f)(3). The amended statute was also challenged as unconstitutional by the publisher of yet another "accident journal". That challenge eventually made its way to the Supreme Court of the United States. In that case, decided in December of 1999, the Supreme Court upheld the validity of California's statute. Los Angeles Police Department v. United Reporting Publishing Corporation, 120 S.Ct. 483 (1999).
E. RUNNERS In addition to the ban on solicitation imposed by F.S. §817.234(8), doctors, lawyers, and chiropractors are prohibited by their respective ethical rules from contacting potential clients or patients in person or by telephone. As a result unethical practitioners will turn to runners to do the dirty work.
Runners generally will work for a specific lawyer, auto body shop, or chiropractor though sometimes they will freelance and work for more than one individual. Most of these runners work for chiropractors who typically pay $250.00 to $500.00 per referral. Lawyers and auto body shops generally pay less.
Runners use a variety of practices to convince individuals to go to a specific doctor or chiropractic clinic for treatment. Sometimes victims are led to believe that the solicitor works for their insurance company and that they must appear as directed or risk loss of insurance benefits.
Scare tactics are often employed. Runners emphasize that the individual may be suffering from some hidden injury that will only manifest itself later, perhaps at a time too late for coverage or treatment. Many others will be promised implicitly or explicitly that they stand to make large sums of money, but only if they appear, and continue to appear, for treatment. Sometimes, either alone or in combination with the above tactics, victims are given money in order to induce their cooperation. Most often runners contact individuals over the telephone, but others are brazen enough to actually contact the individuals at their home or place of business. Often these personal solicitations can become quite intimidating. One witness testified that in the past year she had been confronted at home by an aggressive solicitor who browbeat her and threatened her with loss of her car, her home and possible criminal prosecution if she did not do as was directed. This solicitor made three visits to this victim's home over a period of three days in order to coerce her cooperation, which was emotionally upsetting to the victim and her family.
We also learned of one incident where a runner was encouraged by his employer, a law firm, to attend a hospital's course on becoming a lay cleric, in order to hasten contact with injured victims or grieving family members at hospitals. In that case, the runner actually contacted the grieving parents of a young child severely injured in an automobile accident. The runner met the family members in the intensive care waiting room where he prayed with them and offered solace, after which he produced a lawyer's business card to the shocked parents. Clearly, no tactic appears to be beneath the sensibilities of these runners. The tremendous financial incentive may be one reason. One runner testified to us that he made an average of $20,000 per week referring patients to a chiropractor. In order to reach this magic plateau, he only had to bring in 30 individuals at $500 per referral, for which he also received a $5,000 bonus.
The same financial incentive leads health care professionals to use runners. As an example, we heard testimony that a one person chiropractic office may average gross billings of $200,000 per year. By using runners to bring in a steady stream of patients, that same office may generate $700,000 to $800,000 in billings per year.
F. DIAGNOSTIC TESTING Once individuals come in for treatment at a doctor's or chiropractic office they are generally given a variety of tests which vary little, regardless of the symptoms or injuries. Some tests are of marginal utility or validity, but all are extremely profitable. One popular test employed by medical professionals engaged in patient solicitation and brokering are nerve conduction studies. One chiropractor who testified before us explained how he paid a technician approximately $100 per patient to conduct these nerve conduction studies in his office. The chiropractor would then bill the insurance company $900 for these same studies. This enormous markup for diagnostic tests is not customary among legitimate medical professionals.
Another test commonly employed by doctors and chiropractors who solicit patients is video fluoroscopy, a test many experts decry as virtually useless as employed in the treatment or diagnosis of auto accident victims. Video fluoroscopy, we have learned, is essentially a motion picture x-ray which can last several minutes. Manufacturers of these fluoroscopy machines claim that the exposure from these devices is lower than that of an x-ray; but because the individuals are being bathed in the gamma radiation for as long as 15 minutes in one session, the total amount of radiation exposure can be many times greater than that of a typical x-ray. A video fluoroscopy machine can be leased for as little as $1,500 per month and the tests billed at over $650 per five minute examination. The profit potential makes this test extremely attractive to unscrupulous medical practitioners.
Other diagnostic tests come and go in popularity, but what they all have in common is that they are extremely expensive, highly profitable, and generally employed to drain the $10,000 coverage as quickly as possible. In fact one nationally syndicated diagnostic company boasts in its literature that it can teach professionals to reach "policy limits in 90 minutes." The question triggered by such a statement is why medical professionals, ostensibly dedicated to providing the best medical treatment possible to their patients, would ever be concerned about reaching policy limits quickly or otherwise. The enormous profit potential in ordering these tests can only have a corrosive influence on a doctor's independent medical judgment.
G. MRI BROKERINGThe brokering of certain diagnostic tests creates another opportunity for unscrupulous medical professionals to profit from these tests. MRI or Magnetic Resonance Imaging tests have long been used by the medical establishment and have a long history of benefits to patients. Because of a glut of MRI facilities in many populated areas of this state, the price of MRIs has come down over the years. Taking advantage of the excess capacities of MRI facilities, some unscrupulous individuals have formed what they call MRI brokerage businesses. What these businesses do is negotiate a deal with an MRI facility or multiple MRI facilities to perform MRI tests, for a price of roughly $350-$450. The MRI broker will then bill out these same tests to an insurance company for as much as $1,700. They do so by indicating in the billing documents that the broker is actually the facility administering the test, sometimes going so far as cutting and pasting documents, removing the letterhead from the real MRI facility and substituting their own.
Because there is no fee schedule set by the government in PIP claims, and because of the strict rules regarding PIP claims, as discussed below, insurance companies must pay almost any amount billed. For example, a lumbar MRI scan would typically be billed on average at $1,700 to a PIP insurer. Medicare, however, would only pay $592 for that same test, a workers compensation carrier would only pay $546, and a typical preferred patient plan would on average pay $653.
MRI brokers provide no real service other than scheduling an appointment which any doctor's office can do, or for that matter for which any patient can do on their own. Even MRI brokers who testified before us readily admitted that a patient could take their prescription for an MRI to any facility, just as that same patient could take a drug prescription to any pharmacy. Given that they are providing absolutely no benefit to the process, MRI brokers must somehow induce a doctor or chiropractor to refer their patients to them. All too often that inducement is in the form of a kickback. Typically an MRI broker involved in paying kickbacks will pay $200.00 for each patient referred.
At least one court has taken notice of this MRI brokering practice. In the case of Nuwave Diagnostics, Inc. vs. State Farm Mutual Automobile Insurance Company, Broward County Circuit Case No. 97-09174, the court disallowed two charges of $1,500 for MRI scans billed by the Plaintiff, an MRI broker. The facts in that case, as recited in the court's opinion, were that the broker contracted with an MRI facility to pay $400 per scan. The broker would then refer patients to the facility which would perform the MRI scans. Thereafter, the broker would bill the insured's PIP carrier $1,500 for each scan. The Court rejected, as a legal fiction, the broker's claim that it had provided the MRI services. The Court further found that the brokering activity outlined in that case constituted a clear violation of F.S. §817.505. The court concluded that the $1,100 markup charged by the broker was nothing more than a kickback.
Some unethical MRI diagnostic centers pay doctors and chiropractors the kickback directly rather than through a broker. In either scenario, medical professionals who accept this kickback are in no position to exercise independent professional judgment in the ordering of these exams. Nor are their patients, unaware of the kickback scheme, able to give informed consent to such tests.
H. PERSONAL INJURY LAWYERS Florida's PIP Statute imposes a rigid 30 day rule on insurance companies. F.S. §627.736 mandates that PIP claims must be paid within 30 days or the claim is considered overdue and the insurance company will be liable in a suit to recover these PIP benefits. The company will also be responsible for paying plaintiff's legal fees, which can add thousands to the amount of the settlement. Insurance companies complain that 30 days is rarely enough time to investigate and demonstrate that the claim is fraudulent. For this reason, many insurance companies have resigned themselves to paying any sort of PIP claim no matter how outlandish. In the past, this has included paying inflated MRI claims that they knew, or believed to be, brokered.
Doctors and chiropractors who engage in patient brokering and solicitation generally have relationships with one or more lawyers who will file suit on the 31st day if the claim is not paid. Because of these aggressive tactics, insurance companies are hesitant to challenge what they consider to be suspicious claims. Many personal injury attorneys benefit from a relationship with such chiropractors and doctors. Unethical lawyers will often refer clients to a doctor or chiropractor they know will make a finding that their client has been permanently injured. Such a finding is crucial under Florida law because it allows the insured to sue for pain and suffering and thereby recover much more money than simply reimbursement for medical treatment. The lawyers, of course, will make 30-40% of these recoveries. The doctors' or chiropractors' reward for consistently finding permanent injury in these referrals from lawyers is their opportunity to drain the $10,000 coverage with often bogus, and always highly profitable diagnostic tests.
>Lawyers will also protect the doctor's or chiropractor's interest in the PIP deductible, which can be as high as $2,000, insuring that any settlement from the insurer will first pay for any outstanding bill by the medical professional. By the time all the bills are paid and the lawyers receives their cut, insureds generally receive very little money for all their trouble.
I. PROFESSIONAL DISCIPLINE Patient solicitation and brokering by doctors, lawyers or chiropractors is banned by the ethical rules of each profession. While we are certain that the great majority of these professionals practice ethically and honorably, we find the prevalence of solicitation and brokering significant enough to justify serious attention to the problems by each professions' disciplinary boards. It does not appear to us, however, that the discipline handed out to date, either in number or in punishment, is enough to dissuade unethical professionals from participating in patient solicitation.
1. Board of Chiropractic Medicine All complaints against chiropractors are initially funneled to the Agency for Health Care Administration (AHCA) for review. If the complaint is legally sufficient, it is referred to an AHCA attorney under contract to the Department of Health to perform prosecutorial functions before the Board of Chiropractic Medicine. The attorney investigates the case and brings his/her findings before a probable cause panel. The panel consists of two members of the Board of Chiropractic Medicine and the Board's counsel, who is an Assistant Attorney General. If there is probable cause, the case moves forward. Ultimately the chiropractor can (1) enter into an agreement with the prosecutor, (2) request an informal hearing before the Board, or (3) request a formal hearing before the Hearing Officer. In all cases where the behavior has been proven or admitted, the chiropractor comes before the Board which ultimately imposes the discipline.
The Board generally meets six times a year in two-day sessions to hear all business, including disciplinary matters. On average the Board may hear 4-5 disciplinary cases each time. The cases vary from malpractice to poor record keeping. On average, patient solicitation cases may be 20% of disciplinary cases in a given year or 5-6 cases per year. Given that there are over 4,000 licensed chiropractors in the state of Florida, and given what we know about the level of criminal activity in the field, we find this number of disciplinary cases to be grossly inadequate and under-representative.
While the Board has the ability to suspend, or even revoke, a license for such activity the typical penalty is more likely to be a fine, which has been recently raised from $1,000 maximum per count to $5,000 maximum per count. Investigative costs and a period of probation during which the chiropractor can continue to work, is also typical. We find that these penalties are inadequate and serve as no deterrence. As we said before, a single chiropractor could boost gross income several hundred thousand dollars a year by using runners to keep the practice stocked with patients. A $5,000 fine per count, for one of the very unlucky few prosecuted in a given year, is simply an insignificant slap on the wrist, easily absorbed in the overhead.
Last year approximately thirty disciplinary cases were heard by the Board. Five cases resulted in suspended or revoked licenses, none for patient brokering. This is inconsistent with the Board's stated position that patient brokering is extremely serious.
While any sort of discipline would serve to chagrin legitimate professionals who takes pride in their work, we do not believe those are the sort of individuals engaged in this unethical conduct. Chiropractors who brazenly solicit dozens of patients and expose them to batteries of expensive and unnecessary tests or treatments, motivated solely by profit, are highly unlikely to be affected by this discipline. We see no reason why the Board should want to keep such people within its ranks, given the negative effect they have not only on the public at large but also on the reputation and continued vitality of the profession itself.
We understand the Board is also frustrated with the small number of disciplinary cases being brought before them. In fact, because of the lack of cases, the Board has recently reduced its meetings to one day sessions. One reason for the low numbers may be how overwhelmed the Board's prosecutors are. The lone prosecutor assigned to the board (this year a second, part-time prosecutor will be added) carries several hundred disciplinary cases. Coupled with a high turnover rate (four different prosecutors were assigned to the board last year) it's easy to identify this as a potential choke point. If the chiropractors aren't prosecuted, the Board can't be expected to act.
2. The Florida Bar The numbers are not much different when we examine the situation with lawyers. Complaints against attorneys are made to the local Florida Bar office. If the complaint is found to be legally sufficient it is referred to the local Bar Grievance Committee, made up of six lawyers and three lay members. The committee may assign a bar investigator to assist in the investigation. If the investigation determines that an ethical violation has occurred a formal complaint is filed. Upon filing the complaint, the Chief Judge of the Supreme Court appoints a referee (a sitting judge) to hear the complaint. If the matter proceeds to a hearing the referee will recommend the discipline to be imposed. Either party may appeal that recommendation to the Supreme Court of Florida.
Since 1989, The Florida Bar has found five attorneys to have been involved in patient solicitation or brokering. In all five cases the Bar recommended disbarment, but the penalty was ultimately reduced by the Supreme Court.
We do not think it is a stretch to say that far more than five lawyers have been involved in patient brokering over the last ten years. While we commend The Florida Bar for its strong stance on discipline, even the Bar representative acknowledged that this is a minuscule number given the approximately 40,000 lawyers in Florida, and the reported level of illegal behavior in this realm. The evidence we have heard strongly suggests a much higher number of lawyers are involved in the practice, and we encourage The Florida Bar to be more vigilant.
III. CONCLUSION
Fueled by the easy flow of insurance money, and enabled by greedy and disreputable lawyers, chiropractors and doctors, PIP fraud is taking a large bite out of every Floridian's insurance budget. The huge profits from this fraud allow runners to make a killing, as much as $20,000 a week to simply call names on police reports and have them come in to see a chiropractor or doctor. Inflated charges for worthless diagnostic tests line the pockets of unprincipled doctors. As a result all manner of shady characters are drawn to the sleazy trade of patient referrals, marginal medicine and worthless MRI brokering. Most of the time the accident victim is left with no coverage and little to show for time spent at the medical facility.
Complex problems require innovative solutions and constant attention. The Florida Legislature, the Department of Insurance, The Board of Chiropractic Medicine, The Florida Bar, the insurance industry, law enforcement, and prosecutors have provided both, in varying degrees. We are grateful that all representatives of the professional, commercial, and regulatory groups who appeared before us were forthright about the obstacles which have made even their best efforts ineffective in stemming the tide of this illegal and detrimental activity. By way of encouraging a fresh look at prevention and deterrence options, we urge consideration of the following recommendations, which we believe will close the gaps, tighten the reinforcements, and provide financial and professional disincentives to continued PIP fraud in Florida.
IV. RECOMMENDATIONS
A. Recommendations to the Legislature1. Amend Florida Statute 119.05, Protection of victims of crimes or accidents, to prohibit the release of accident reports to anyone other than the victim, their insurance company, a radio or TV station licensed by the FCC or a professional journalist as defined in F.S. §90.5015. This will close the door to access by solicitors with no legitimate need for the reports.
2. Increase the penalty for violation of Florida Statute 119.05 from a first degree misdemeanor under the current statute to a third degree felony.
3. Require the regulation and licensing of all medical facilities.
4. Consider adopting a fee schedule for reimbursement under the PIP statute similar to the schedule employed in the worker's compensation statute.
5. Give insurers an additional 30 days to pay PIP claims, at least in those instances where the insurer certifies the claim is being reviewed for possible fraud. This will give insurers more opportunity to identify and deny fraudulent claims.
6. Make all charges for magnetic resonance imaging (MRI) tests unenforceable against the recipient of such services, an insurer, a third-party payor, and any other person or entity unless such charges are billed and collected by the 100-percent owner or the 100-percent lessee of the equipment used to perform such services. This will remove any incentive for creating useless brokering services.
7. Amend Florida Statute s.817.234(8) to state that no insurer or auto accident victim is obligated to pay for any services rendered by any medical provider or attorney who has solicited the victim or caused the victim to be solicited contrary to Florida Statutes. Any such billings for such services are rendered null and void and unenforceable as a matter of law. This will remove the financial incentive to solicit patients.
B. Recommendations to Professional Groups
1. Place more emphasis on the unprofessional practice of patient brokering and kickbacks in their continuing education curriculum.
2. Recognize the existence and extent of the problem and demonstrate the organizations' intolerance for such behavior, and potential for censure.
C. Recommendations to the Board of Chiropractic Medicine
1. Proactively identify and discipline chiropractors engaged in patient brokering or solicitation.
2. Impose greater discipline on those caught engaged in patient brokering or solicitation including the greater use of license revocation as a penalty.
3. Ask for more resources, including prosecutors, to commit to the investigation and discipline of chiropractors engaged in patient brokering and solicitation.
D. Recommendations to The Florida Bar
1. Raise public awareness of the issue of patient brokering and solicitation by attorneys.
2. Proactively identify and discipline lawyers involved in patient brokering or solicitation.
E. Recommendations to the Insurance Industry
1. Improve audit procedures to identify suspicious billing patterns.
2. Take a stronger stance against paying claims where there is reason to believe fraud or solicitation has occurred.
3. Raise public awareness of patient solicitation and encourage reporting by insureds contacted by solicitors.
4. Keep policy holders informed about the laws concerning patient brokering and solicitation through the use of enclosures in their billing statements.
THIS REPORT IS RESPECTFULLY SUBMITTED to the Honorable Belvin Perry, Jr., Presiding Judge of the Fifteenth Statewide Grand Jury, this _____ day of _______________, 2000.
___________________________________
ROLAND P. PICCONE
Foreperson
Fifteenth Statewide Grand Jury of Florida
I, MELANIE ANN HINES, Statewide Prosecutor and Legal Adviser, Fifteenth Statewide Grand Jury of Florida, hereby certify that I, as authorized and required by law, have advised the Grand Jury which returned this report on this _____ day of _______________, 2000.
________________________________
MELANIE ANN HINES
Statewide Prosecutor
Legal Adviser
Fifteenth Statewide Grand Jury of Florida
I, OSCAR GELPI, Special Counsel and Assistant Legal Adviser, Fifteenth Statewide Grand Jury of Florida, hereby certify that I, as authorized and required by law, have advised the Grand Jury which returned this report on this _____ day of ______________, 2000.
__________________________________
OSCAR GELPI
Special Counsel
Assistant Legal Adviser
Fifteenth Statewide Grand Jury of Florida
THE foregoing Report on Insurance Fraud in Florida in the Area of Personal Injury Protection was returned before me this _____ day of ____________, 2000 and is hereby sealed until further order of this court, upon proper motion of the Legal Adviser.
Further, upon the Legal Adviser's oral motion for the disclosure for the purposes of furthering justice of the Report on Insurance Fraud in Florida in the Area of Personal Injury Protection, the Legal Adviser is ordered to disclose the testimony and proceedings recounted in the foregoing document in furtherance of the criminal investigative and civil administrative responsibilities of the Fifteenth Statewide Grand Jury.
__________________________________
Belvin Perry, Jr.
Presiding Judge
Fifteenth Statewide Grand Jury of Florida
IN THE SUPREME COURT OF THE STATE OF FLORIDA
CASE NO. 95,746
IN RE Second Interim Report
ERRATA SHEET
I, Richard Bogle, Chief Assistant Statewide Prosecutor and Assistant Legal Adviser, Fifteenth Statewide Grand Jury, hereby certify that a scrivener's error appears in the sixth line of the second paragraph of page 8 of the document entitled: IN THE SUPREME COURT OF THE STATE OF FLORIDA, CASE NUMBER 95,746, SECOND INTERIM REPORT OF THE FIFTEENTH STATEWIDE GRAND JURY, REPORT ON INSURANCE FRAUD IN THE AREA OF PERSONAL INJURY PROTECTION. Said sentence should read:
"In that case, Amelkin v. McClure, 168 F.3d 893 (6th Cir. 1999), the Sixth Circuit Court of Appeals discussed the reasons and circumstances behind the Kentucky statute."
_________________
Date
______________________________
Richard B. Bogle
Chief Assistant Statewide Prosecutor
Assistant Legal Adviser
Fifteenth Statewide Grand Jury of Florida
STATE OF FLORIDA )
COUNTY OF ORANGE )
Sworn to and subscribed before me by Richard Bogle, who is personally known to me, this _____ day of September, 2000.
______________________
Amy L. Romero
Notary Public
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