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Work is underway on what promises to be the largest insurance issue state lawmakers will tackle in the 2012 session. Personal injury protection claims are going up even as the number of traffic accidents is declining.

State law requires all Florida drivers to carry 10-thousand dollars worth of PIP, or personal injury protection insurance. So when a wreck happens the injured has medical coverage regardless of who’s at fault.

Doctors are the gatekeepers in charge of blocking fraudulent claims… But not all are honest.

A PIP workgroup headed by Insurance consumer advocate Robin Westcott is looking for ways to stop the bad doctors from abusing the system.

“This is a 10 thousand benefit, what do you want to provide with a 10-thousands dollar benefit. Who are you there to protect,” said Westcott.

PIP fraud happens several different ways but one of the most common scenarios is people stage an auto accident, then begin shopping for a doctor willing to bill the insurance company for thousands of dollars in fake medical work. The doctor and claimant then split the cash. The fraud is so common, clinics know as PIP mills are springing up.

“There is this universe of providers out there that you can’t really link back,” said Westcott.

Insurance companies collected 2.3 billion dollar in PIP payments in 2010 and paid it all out in claims. Add administrative costs and everyone’s rates go up to cover the losses. Governor Rick Scott says the system needs to be fix.

“The cost has gone up. We’ve got to deal with that,” said Scott.

PIP is expected to be the biggest insurance issue of the 2012 legislative session. Legislation has already been filed to help reduce the fraud in the system, but there’s another option. Lawmakers could eliminate the mandate on PIP insurance and allow drivers to decided if they want to buy the no fault coverage.