Florida's Second District Court of Appeals has effectively ended Hillsborough County's attempt to regulate clinics that enabled an epidemic of staged auto accidents. The appellate court upheld an injunction issued in January that blocked enforcement of the ordinance.
Back in January a Circuit Court judge issued a temporary injunction against the county preventing it from enforcing licensing requirements for clinics that do most of their business treating people injured in auto accidents.
The County Commissioners passed the ordinance in September 2011 in an effort to stop staged accidents which were used to collect money under Florida’s personal injury protection (PIP) insurance law. Florida law requires auto drivers to carry $10,000 in PIP insurance. Law enforcement and the insurance industry said criminal rings defrauding the system were aided by fake clinics that billed insurance companies for bogus treatment. The Hillsborough ordinance requires that operators of certain clinics obtain a county licence, offer proof that they are associated with a medical doctor, don't employ convicted felons in any positions and submit to random inspections.
About 70 clinics had been approved for licences under the ordinance, which exempted medical providers whose businesses don't rely on crashes or that carry some other forms of accreditation. Enforcement of the ordinance has been on hold since the lower court ruling late last year.
The county noted that there was a 62 percent decrease in the number of staged accidents following the introduction of the ordinance. Many of the fraudulent clinics just closed which impacted on the number of staged accidents and questionable claims.
About 30 facilities argued that the county ordinance unlawfully sought to pre-empt state law under which they are licensed by treating the clinic owners in Hillsborough County differently than any other clinic owners in the state They also said it had an arbitrary and subjective process for people challenging the denial of a licence, subjected them to unlawful searches from a broad array of law enforcement and included other requirements that made it all but impossible for otherwise legal clinics to operate.
It is still unknown how the county will respond to the decision.
As Ontario moves towards the licensing of clinics operating in the auto insurance system, there may be some lessons to learn from the Hillsborough experience.
Statutory authority to introduce a licensing system for all clinics in Ontario is a much better approach than Hillsborough going out on its own. FSCO has been given jurisdiction to license the clinics by the Legislature. However, in developing and enforcing business standards for clinic owners and operators, the regulator needs to be cautious and ensure that it does not act in an arbitrary or subjective manner. Reputation alone cannot be the basis for denying a licence.
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