March 2007

Report says diagnostic and chiropractic treatment drives Florida no–fault claim costs higher

Recent growth in the frequency and cost of diagnostic tests and chiropractic treatment have helped fuel rapid growth in personal injury protection (PIP) claim costs in Florida, according to a new study from the Insurance Research Council (IRC).

The study, “Florida Auto Injury Insurance Claim Environment, 2007 Final Report,” documents the use and cost of chiropractic treatment. The percentage of PIP claimants receiving chiropractic treatment grew from 33 percent in 2002 to 44 percent in 2005. The cost implications of this trend were magnified by rapidly increasing charges from chiropractors. Average total chiropractor charges for PIP claimants grew 35 percent throughout the three-year period, from $4,837 to $6,510.

The growing utilization and cost of diagnostic services and chiropractic treatment contrast sharply with an apparent decline in the seriousness of auto injuries. According to the study, 71 percent of PIP claimants had no disability resulting from their injuries in 2005, compared with 67 percent in 2002 and 66 percent in 1997. Seventy-three percent of PIP claimants reported a sprain or strain as their most serious injury in 2005, compared with 68 percent in 2002 and 61 percent in 1997. Fractures, lacerations, concussions, and other more serious injuries were less likely to be reported in 2005 than earlier.

Another important finding is that PIP claimants in Florida hired attorneys more frequently in 2005 than three years earlier. The study found that 45 percent of claimants in 2005 hired attorneys, compared with 34 percent in 2002. Claimants with attorneys were much more likely to receive chiropractic treatment and to have an MRI than claimants without attorneys.

Source: Insurance Research Council, www.ircweb.org

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