Press Releases
September 5, 2007
Florida’s no-fault system fosters abuse that drives high
auto insurance rates
Ending no-fault will limit the ability of health care
providers to overcharge auto accident victims
Tallahassee – Under Florida’s current no-fault system,
there are few restrictions on what hospitals can charge auto accident
victims for care. Oftentimes the result is excessive and unnecessary
charges billed to accident-related care.
“The lack of restrictions on what hospitals can charge
is one of the biggest flaws in Florida’s no-fault system
and the primary reason why we pay the sixth highest auto insurance
rates in the nation,” said Christopher Moya, spokesman for
Floridians for Lower Insurance Costs.
Claims by Florida hospitals that they will lose millions in uncompensated
care as a result of the elimination of Florida’s no-fault
system are misleading and amount to little more than scare tactics
being employed by hospitals to preserve a system that allows them
to reap excessive profits for treating auto accident victims.
“It’s not surprising hospitals are fighting so hard
keep no fault. We’re seeing 1,000 percent markups billed
to insurers for accident care,” Moya said. “These
costs are passed on to Florida drivers in the form of higher premiums.”
Florida’s no-fault system forces drivers to pay nearly
$1.7 billion annually in higher auto insurance premiums.
Auto accidents in Florida are the only instance in which there
are few standard charges for patient care. An industry survey
evaluating typical hospital emergency room charges submitted to
auto insurers for accident-related care between February 2006
and March 2006 highlights the abuses, finding a wide variation
in the charges hospitals billed auto insurers for the EXACT same
procedures.
Examples include:
- An emergency room visit ranging from $20, the lowest billed
price to $577, the highest billed price.
- A trauma-level emergency room visit ranging from $388 to
$3,672.
- An X-ray of the spine ranging from $107 to $885.
- A CT-scan of the spine ranging from $462 to $4,201.
- A CT-scan of the head ranging from $460 to $5,300 the highest
billed price.
In addition to abusing the system by significantly marking up
accident-related care, the Florida Hospital Association’s
exaggerated claim of $350 million in lost revenue is misleading.
The figure skews the real revenues generated from accident-related
care because it represents the total amount hospitals billed for
care provided to auto accident victims, not the actual amounts
they received from insurers for no-fault claims.
Eliminating Florida’s broken no-fault auto insurance system
will give consumers greater choice in selecting the auto insurance
coverages that best suit their needs, including paying for accident-related
care. Beginning in October, Florida drivers will finally begin
saving on their auto insurance when they are no longer forced
to pay for Florida’s costly and broken no-fault auto insurance
system.
The reality is most Florida drivers don’t even need this
coverage because they already have medical payments coverage,
uninsured motorist coverage, Medicare, Medicaid or private health
care coverage - all of which would cover the cost of medical bills
resulting from an auto accident. Additionally, 92 percent of Florida
drivers already carry bodily injury liability coverage, according
to the National Association of Insurance Commissioners.
However, these facts and the savings resulting from the elimination
of an entire fraud industry when no-fault ends are being overshadowed
by exaggerated claims about the costs of treating auto accident
victims.
“Florida hospitals provide critical, emergency care to
accident victims, however, the price of that care should not mean
the sky’s the limit,” Moya said. “Florida drivers
shouldn’t be treated as second-class citizens subject to
extraordinary costs and multiple, unnecessary procedures.”
Floridians for Lower Insurance Costs is a coalition of more
than 10,000 individual consumers, businesses and trade associations
throughout Florida.
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