Will PIP Suits Go the Way of the Dodo?

House Bill 837 (HB 837) was signed into law on March 24, 2023, and it stands to dramatically alter the landscape of Florida Personal Injury Protection (PIP) and Personal Injury claims going forward. Despite the law’s passage nearly six months ago, there’s still some confusion about whether medical providers will still be able to file PIP Suits.

HB 837’s passage did not alter Section 627.736, Florida Statute (The PIP Statute) in any way, shape, or form. PIP coverage is still required for all private passenger automobiles registered in the State of Florida. The benefit limits are still the same, the requirements to qualify for coverage are still the same, the billing requirements are still the same, the reimbursement amounts are still the same.

Medical providers still have legal standing to bring a cause of action on a PIP claim if the patient has executed a valid Assignment of Benefits (AOB). As the assignee of a PIP claim, medical providers are still able to file pre-suit demands for unpaid or underpaid, overdue charges. If the insurance company pays benefits in response to pre-suit demands, they still are required to pay the statutory penalty, along with interest and postage cost reimbursement. Medical providers who have accepted an AOB may still file PIP Suits if the insurance company doesn’t pay all the benefits owed after receiving a pre-suit demand letter.

Now, I realize that at this point in the article, I may have confused you with what I’ve stated so far. At this point, you may be saying to yourself: “If the PIP Statute wasn’t altered or abolished, and if medical providers can still file PIP Suits, then why is everyone panicking?” The answer to this question is simple. While the PIP Statute in and of itself wasn’t changed, what was changed was the medical providers’ ability to collect attorney’s fees and costs when prevailing in a PIP Suit. How was this changed? Don’t worry, I will explain.

Section 627.428, Florida Statutes, allowed for one-way prevailing party attorney’s fees for the Plaintiff in a lawsuit against their insurance company. This statute was repealed with the passage of HB 837. Repealing Section 627.428, Florida Statutes, literally takes the teeth out of the ability to enforce the PIP Statute, because without the prospect of collecting separate attorney’s fees and costs, it becomes impossible from an economic standpoint for an attorney to litigate PIP claims. It is unlikely an attorney can work off an acceptable percentage of the PIP recovery because of the relatively small balances being pursued. The legislature did this with the explicit intent of drastically reducing the volume of PIP litigation in Florida.

There is one instance where one-way prevailing party attorney’s fees for the Plaintiff are available; however, this doesn’t apply to PIP claims that have been assigned to medical providers. HB 837 created Section 86.121, Florida Statutes. This new statute states that it will permit an award of attorney’s fees to a named insured, omnibus insured, or beneficiary under a policy in a declaratory relief action after an insurer has made a total coverage denial of the claim. The right is not transferable or assignable to anyone other than the named insured, and a “reservation of rights” is not considered a “coverage denial” under this section.

The legislature made it clear that HB 837 does not impair any right under an insurance contract in effect on or before March 24, 2023. This means that, even if an automobile accident giving rise to a PIP claim

occurs after March 24, 2023, HB 837 would not apply if the underlying insurance contract commenced or renewed prior to March 24, 2023. The Statute of Limitations for PIP breach of contract claims is still five years, so at this time, there’s still a window of approximately 4 ½ years’ worth of older PIP claims that may be pursued with the ability to collect prevailing party attorney’s fees and costs for the Plaintiff in litigation.

So does all of this mean that PIP Suits will go “extinct,” like the dodo? I would say no, but their numbers will be drastically reduced without the ability to collect attorney’s fees and costs.

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