Posts Tagged ‘health clinic’

Staged accidents put Florida at top of scammer list

Friday, June 25th, 2010

It comes to no surprise to us that Florida leads the nation in phony accident claims. The National Insurance Crime Bureau says that these types of rip-offs increased 46 percent between 2007 and 2009.

Florida was the leader with 3,006 staged accidents over the two-year period. Tampa was the worst city for fraud, followed by Miami and Orlando.

The Miami CBS affiliate reports that the problem is huge in South Florida. The video report shows how unsuspecting drivers can become victims of fraud.

And the South Florida Sun-Sentinel quoted the NICB report as saying, “Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars. Unless someone becomes suspicious, many of these staged accidents go undetected.”

We have long been suspicious of these type of accidents, and of the claims filed by medical service providers. As we previously reported, people will recruit insured drivers to fake accidents so that bogus Personal Injury Protection (PIP) claims can be filed. In these cases, the people involved never suffer any injury and never see a doctor or receive medical treatment.

The rise in staged accidents means insurance premiums are also going up. Insurance companies like ours must pass along the costs to safe, honest drivers. Part of the solution is stronger law enforcement. This year, the Florida Department of Financial Services worked with NICB and local police to arrest 27 people who were charged in faking accidents and medical claims.

The other step that’s needed: legal reform. The Florida legislature must make it harder for drivers and medical clinics to set up phony schemes. And the state must eliminate the financial incentives for plaintiff attorneys to sue when claims are not paid. Right now, the clinics and attorneys have all to gain and little to lose when an insurance company challenges their claims. Until there are strong deterrents to fraud, Florida drivers will continue to pay for drivers, clinics and lawyers who cheat.

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CEO Richard Parrillo, Sr., speaks out on PIP fraud in national magazine

Thursday, March 18th, 2010

The continuing exposes of personal injury protection (PIP) fraud by United Auto Courts Report are getting national attention. United Automobile Insurance Company (UAIC) CEO Richard Parrillo, Sr., was interviewed in March 2010 by Claims, a national magazine for the insurance industry.

UAIC’s efforts to fight PIP abuses by drivers, health clinics and attorneys geared up with the launch of this blog in December. Claims interviewed Parrillo about PIP fraud and what needs to be done to stop it. Here are excerpts from Parrillo’s interview. In it, he says:

  • PIP attorneys and clinics have been exploiting the system for as long as PIP has been in place.
  • In recent years, the [accident] runners have been replaced with more blatant solicitation efforts. Now, hotlines and advertisements such as 800-NEED HELP or 800-411-PAIN draw the accident victim in with promises of automatic payments of “$10,000 in benefits and lost wages.
  • Plaintiff PIP attorneys have told us directly that they share the fees with the [health] clinics.
  • The county courts reward plaintiffs’ attorneys for churning fees and performing unnecessary work to prosecute their cases. This phenomenon of inexplicable attorney-fee awards has fueled the fraud and abuse that permeates the PIP system.
  • PIP fraud and abuse is so widespread in Florida, it’s hard to say that the problem can ever be solved. … Of course, attorney-fee reform will have to occur for there ever to be hope of solving this problem.

For more of the interview, read the entire article on the Claims magazine Web site.

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Police investigation exposes staged car crashes

Tuesday, March 16th, 2010

Staged car crashes are big business. Just ask Josue Baez of Tampa. The 23-year-old told investigators he was paid $500 to pretend to be a crash victim and was promised $10,000 when a lawsuit went through.

His faked accident, which led to an arrest and guilty plea, was one of hundreds in Florida in 2009, say authorities trying to crack down on staged car wrecks.

The accidents have only one purpose: to rip off insurance companies. Crime rings see an easy way to make money through Personal Injury Protection (PIP) coverage.

About 30 percent of the roughly 12,000 complaints to Florida’s state insurance fraud division in 2009 were for PIP fraud, Alex Sink, the state’s chief financial officer, told the Tampa Tribune.

Here’s how the fraud works, according to investigators: A person offers cash to individuals to stage a car accident. The same person directs the individuals to a specific health clinic for diagnosis and treatment, even if there are no injuries.

The clinic files PIP insurance claims that can total more than $10,000 per person, the legal limit for PIP coverage. A clinic can make millions of dollars per year filing claims, Captain Steven Smith of the state Division of Insurance Fraud told the Tribune.

In some instances, the supposedly injured individuals sign over their legal claims to the clinic, which then sues the insurance company. Their attorneys earn as much as $500 an hour for filing legal paperwork on these fraudulent claims.

Drivers pay $200 to $300 per year in higher insurance premiums because of fraudulent claims, Amy Moore, a spokesperson for Allstate, told the Tampa Tribune.

UAIC is committed to getting PIP premiums under control. The company cannot do it alone and neither can law enforcement officers at state and local levels. Florida needs court reform and laws that remove the financial incentive for fraud. And those that abuse the legal system need to be punished.

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