These are some of the conclusions of Pinnacle Actuarial Resources, Inc. (Pinnacle), in its actuarial analysis of HB 119. Enacted in the 2012 Florida legislative session, HB 119 directed the Office of Insurance Regulation (OIR) to engage an independent actuary to calculate the savings expected from HB 119. OIR selected Pinnacle, which released its final report on August 20, 2012.
Pinnacle divided the statutory changes into 16 principal categories (including 13 potential cost-savers), which begin to take effect next year (2013). The summary data reported by Pinnacle reflects the following minimum and maximum impacts of the legislative changes:
Impact Analysis of HB119. Note: -% impact means costs are expected to decrease.]
#6 - Limitations on Non-Emergency Conditions. HB 119 imposes a $2,500 cap on non-emergency treatment. Pinnacle studied 2012 claim data and determined that approximately 30% of PIP claims are non-emergency and that 97% of non-emergency claims currently exceed the $2,500 limitation of HB119, as follows:
Impact Analysis of HB 119].#7- Massage Therapy Exclusion. As the new law takes effect, PIP will no longer pay for massage therapy or acupuncture treatment. Pinnacle reviewed seven years of PIP medical payments, focusing particularly on years 2010 and 2011. In those last two years, massage therapy has accounted for 13.2% of medical payments (acupuncture only 0.2%). Pinnacle concludes, however, "that not all of the payments currently being coded as massage therapy will be eliminated from the system and there will be leakage” with a likely future increase in coding for chiropractic manipulation (in lieu of massage therapy). Because of this leakage, Pinnacle discounts its estimate of loss savings to a range of 6.9% to 10.4%. [See pages 26-27 of Impact Analysis of HB 119].
Other Loss Costs. No other single change under HB 119 is predicted to save more than 2% (on the high side). The combined impact of the other categories could be as low as 1% (or as much as 7%).
This summary was prepared by Perry Cone and posted at TallyInsLaw.com.
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