Proper Application of PIP Deductibles

An issue that comes up frequently in PIP cases is the application of the deductible to the payment of PIP claims. Florida Statute. 627.739(2) states that “[t]he deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1).”

Although this language is clear in that the deductible must be applied to 100 of the expenses, many insurers continue to improperly apply the deductible. This results in a loss to the bottom line of many medical providers. Take an example where a medical provider has provided $3,000 to a patient with a $1,000 deductible. If the deductible is applied properly, the medical provider is entitled to 80% of $2,000 in reimbursement from the insurer. If fee schedule reductions reduce the $3,000 to $2,400, the medical provider is reimbursed at 80% of $1,400.

Rather than receiving $1,600, the medical provider receives $1,120. This is a difference of $480, an amount that can quickly add up with a number of patients.