What Is The Process For A Demand Letter In A PIP Case?

As a health care provider, you are going to run into patients who have been in an auto accident. When that happens you are going to bill PIP insurance. After that, you’re going to look at your bill and realize you have not been paid properly and you will be forced to send a formal demand.  Demand letters are a tricky component of your practice. Demand letter litigation is unclear, vague, and inconsistent.

A “demand letter” is a document that serves to announce that you are entitled to more money, and must be sent to the insurance company prior to filing a lawsuit. The letter stands between your receiving PIP benefits and finding an attorney to file a PIP Suit.

The battle is learning how to create a demand letter that contains enough of the essential terms as required by Florida Statutes (2012) Section 627.736(10)(b).

What is a demand letter?

A demand letter is a pre-lawsuit letter sent directly to the insurance company. In the law, the need to file a demand letter is called a “condition precedent.”  This means you must meet the condition of filing a proper demand letter to the PIP insurance company before you are entitled to file a lawsuit to get your benefits. The need to file a demand letter started about 15 years ago.  The actual letter must state it is a “demand letter” and it must meet all of the requirements of Florida statute 627.736.

Strategically a properly formulated demand letter will drive additional reimbursement. Not only does the demand letter tell the insurance company they “messed up” but it serves to warn the PIP carrier that failure to pay the overdue benefits is the final pre-suit step before a PIP suit is filed.

Who will prepare a demand letter?

By properly training your staff you can file your own demand letters to the insurance company.  These letters must be sent by certified mail return receipt requested. They also must be sent to a special PIP demand letter address. Each PIP insurance company has a special address just for PIP demand. There is a website you must check each day before sending your PIP demands because the insurance companies change the address for PIP demands at least once or twice per year. As crazy as it sounds they do this to make it hard on doctors and hospitals to collect their PIP benefits.  Go to: www. floir.com To figure out where to send your demands.

The other option is to outsource the analysis and creation of demands to a billing company or law firm that will happily handle this for you. The cost of having an outsourced vendor do your demands is often nominal, or even free, depending on the business model you choose.  We have found outsourcing demands to a specialty vendor to be a “best practices method” for maximizing the revenue cycle segment of PIP insurance. Very few medical offices have the personnel who have the time or training to properly submit their demands consistently. They further don’t have the time to track the demand responses, and they especially do not have the bandwidth to respond to the new “6(b)” information requests that are permitted under the new PIP statute.

What happens after the demand letter is sent to the insurance company?

The insurance company has 30 days after receipt of “notice by the insurer” (demand letter) to decide whether to pay the amount in dispute as noted in the demand letter. If the insurance company decides to pay the disputed sum they must also pay a statutory interest payment and a penalty of 10 percent of the overdue amount paid by the insurer, and repay the postage. All of these requests must be included in the demand letter.   See: Florida Statutes Section 627.736 (10(d)(2012).

If you create a professional and proper demand, and you follow up with any unpaid demands by outsourcing to a PIP attorney, you will find over a short period of time your PIP revenue going up. Insurance companies track those medical providers who fight to get fully paid by PIP. Once they know you are serious they will start paying you the money you are due.

If you need any help or have any questions please don’t hesitate to call the LaBovick Law Group. We are always seeking out the newest case law and adapting to the dynamic nature of the law. We have a passion for maximizing medical revenue for our hospital and doctor clients and we are here to help when help is needed! Please don’t hesitate to call.

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