Pinnacle Report Raises Caution

Tallahassee –The Florida’s Office of Insurance Regulation released a study by Pinnacle Actuaries concluding that the new anti-fraud law, when implemented, should reduce consumer prices.  The somewhat optimistic report contained a number of caveats that suggest substantial imprecision with respect to the magnitude and timing of any consumer benefits.  For one, the study acknowledges that key provisions of the anti-fraud law do not take effect until January 2013 and some as late as July 2013.  Until these provisions are implemented, fraud cannot be reduced, which means that consumers will not realize these savings for some time to come.

The report’s findings also seem a bit optimistic given the recently disturbing signs that some medical providers are trying to exploit potential loopholes in the new law.  The report oversimplifies the determination of what would be deemed a medical emergency and what would not.  In addition, the report largely ignores the litigious nature of the issue, which is likely to increase legal costs and impose delays in implementing fraud-fighting tools.   

ACI’s president Steve Pociask states, “The major risk is that the current cottage industry of bogus medical clinics and their cadre of trial lawyers will undermine the good intent of the law.”  Pociask adds, “The reality is that cost savings will not materialize until fraud is first reduced.” 

The American Consumer Institute Center for Citizen Research is a 501(c)(3) nonprofit educational and research institute.  For more information, visit www.aciflorida.org.

 

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