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How to fight staged accidents

By Jay MacDonald · Bankrate.com
Friday, February 17, 2012
Posted: 10 am ET

One year ago, Hillsborough County in Florida's Tampa Bay had 775 staged accidents, the second highest in the nation behind New York City. The $15.5 million price tag for those bogus medical claims drove auto insurance premiums in the county up $350 or more, according to the National Insurance Crime Bureau, or NICB.

First, county leaders got mad. Then they got busy. Twelve months later, they've cut the number of staged accidents by 62 percent. This is how they did it.

Having grown frustrated with efforts to fight the scourge at the state level, Hillsborough County Commissioner Kevin Beckner went in search of a community-based solution with the help of county attorneys, detectives, the local antifraud squad and the NICB. After brainstorming for more than a year with the medical, legal and insurance communities, the group zeroed in on a loophole in state statutes that was allowing fraudulent clinics to operate without a license.

The team then drafted a county ordinance that specifically targets only those clinics that receive more than 90 percent or $200,000 of their gross income from personal injury protection, or PIP, providers. Under the ordinance, these clinics are now required to obtain a county license and must identify the managing physician and all employees and provide background information.

"Our ordinance has had impressive results," Beckner writes in the Tampa Bay Times. "Within a month of its passage, 79 suspected fraudulent clinics closed, with another 32 closing the next month."

Not coincidentally, the NICB reports a dramatic decrease in the number of questionable auto insurance claims, from a monthly average of 40 to nearly zero after the ordinance went into effect.

Beckner encourages other communities frustrated by political stalemates at the state level to embrace the same approach to solve local problems.

"Just as important as the ordinance itself is the process that got us here," he writes. "The bipartisan collaboration of individuals both from the public and private sector set aside their political ideology and self-interest to focus on achieving one goal – eradicating PIP insurance fraud in Hillsborough County."

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