ORLANDO, Fla. -

Florida’s new auto insurance law takes effect Sunday. At the heart of the law is the reform of personal injury protection (PIP) coverage, in an effort by the state to crack down on insurance fraud.

Jessica Velez of Kissimmee suspected insurance fraud after she and her mother were in a car accident and dialed a so-called lawyer hotline. The hotline referred her to a pain clinic.

"We went to the doctor’s office and then that’s where we met the lawyer,” she said.

The doctor and the lawyer came to the same conclusion. “If I wanted to continue the case, I had to go to therapy for three of four months…even if I was feeling better,” Velez explained.

The pain clinic/lawyer relationship, particularly when it involves auto insurance benefits, worries state authorities.

“I don’t know an attorney who in a phone conversation could diagnose my issue and know a specific clinic to send me to,” Jeff Atwater, Florida’s Chief Financial Officer, told Local 6.

Atwater helped push for changes to the state’s insurance law, specifically PIP reform. Under the new law, only emergency medical conditions will warrant the full $10,000 in treatment from PIP coverage. Consequently, pain clinics and lawyers will have to stop making advertising claims that they can guarantee accident victims $10,000. This provision, state authorities told Local 6, is a direct response to pain clinics that exhaust an accident victim’s PIP money whether or not the victim needs treatment.

Jazzmil Rodriguez said that was the case after her accident.

“I think it’s a scam,” she said. “I think the chiropractors are charging up their fees, billing it to insurance, and cutting the attorneys a fee.”

That may be a strong accusation, but effective January 1st, 2013, the new law will cap chiropractic and physical therapy treatments at $2,500. Neither will be able to bill for the full $10,000 in PIP. Other changes coming in January include

  • A requirement that victims seek treatment within 14 days of an accident
  • Massage therapy and acupuncture will no longer be covered by PIP
  • Only certain medical providers will be eligible to treat PIP patients

The first changes to the law, which will take effect Sunday, include

  • Tougher licensing standards for medical clinics
  • A new state anti-fraud task force led by CFO Atwater
  • Stiff penalties for providers caught defrauding the system
  • A requirement that crash reports written and filed by police contain the names of all passengers in the vehicles, so that people not involved in the crash cannot go to a clinic claiming they need treatment

The law has some opposition. Consumer advocates say it gives victims less choice of treatment and favors insurance companies’ bottom line. Some providers say it gives them less flexibility.

However, the law could save all Florida drivers money. It includes a requirement that insurance companies reduce PIP premiums at least 10 percent by October 1, 2012, or provide ample documentation why they cannot. The law further requires companies to reduce PIP premiums 25 percent by 2014.