18 Fla. L. Weekly Supp. 597a
Online Reference: FLWSUPP 1807SAPP
Insurance — Personal injury protection — Deductible — Under current version of PIP statute, deductible is deducted from 100% of amount billed before application of any percentage limitation
FLAGLER HOSPITAL, INC., (As assignees of Devin Sapp), Plaintiff, vs. PEAK PROPERTY & CASUALTY INSURANCE CORPORATION, Defendant. County Court, 7th Judicial Circuit in and for St. Johns County. Case No. SP10-1878, Div. 66. April 7, 2011. Charles J. Tinlin, Judge. Counsel: Bobbie Celler, Celler Law, P.A., Lighthouse Point, for Plaintiff.
AMENDED ORDER GRANTING PLAINTIFF’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT
This matter came before the Court for hearing on March 9, 2011, upon the Plaintiff’s Amended Motion for Partial Summary Judgment. In this action the Plaintiff is seeking to recover assigned Personal Injury Protection (PIP) benefits from the Defendant for medical services rendered by the Plaintiff to Devin Sapp on January 30, 2010, whom the Defendant insured at the time of his motor vehicle accident. The policy that Sapp purchased from the Defendant had a $1,000.00 deductible for PIP benefits coverage. At issue is what amount is owed by the Defendant to the Plaintiff pursuant to sections 627.736(5)(a)2.b and 627.739(2) Florida Statutes.
Section 627.736(5)(a)2.b states:
2. The insured may limit reimbursement to 80 percent of the following schedule of maximum charges:
b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges.
Section 627.739(2) states:
The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736.
It is the Plaintiff’s position that the insured’s $1,000.00 deductible should be deducted from the entire amount due before the percentage reductions are applied pursuant to section 627.736. It is the Defendant’s position that the $1,000.00 deductible should be applied after the 75% reduction is applied. The Plaintiff is moving for partial summary judgment on this issue alleging that as a matter of law its calculations are the legally proper formula to determine amounts due for medical services under the current PIP statutes.
The total amount of the medical services provided and charged by the Plaintiff is $2,484.91. Under the Plaintiff’s application of the above statutes the formula to determine the amount due is:
$2,484.91 minus $1,000.00 (deductible) = $1,484.91 x 75% = $1,113.68 x 80% = $890.95 owed by the Defendant.
The Defendant only paid the Plaintiff $690.95 leaving a balance due, according to the Plaintiff, of $200.00. Under the Defendant’s theory of application of the statutes the formula for proper payment is:
$2,484.91 x 75% = $1,863.68 minus $1,000.00 (deductible) = $863.68 x 80% = $690.95 owed.
This issue was previously addressed by the Florida Supreme Court in International Bankers Insurance Company v. Arnone, et al, 552 So.2d 908 (Fla. 1989), rehearing denied. There the Court was addressing the application of the deductible amounts to an earlier version of sections 627.739(2) and 627.736(1) and found that the deductible amount would be subtracted from the 80% of the medical expenses. However, the statutes have since been amended and now section 627.739(2) reads, in pertinent part, that “The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736.” (emphasis added). Neither counsel for the Plaintiff nor counsel for the Defendant could provide any case law that specifically addressed this issue as presented.
The insured’s (Sapp) insurance policy states under its PIP section “We will pay, in accordance with the Florida Motor Vehicle No-Fault Law, to or for the benefit of the injured person: (1) Medical benefits, (2) Disability benefits. . .” Further, the section entitled: “Limits of Liability” under subsection (5) states:
The deductible amount shown in the Declarations Page will be subtracted from the total amount of all losses and expenses for medical expenses, work loss and replacement services expenses before the application of any percentage limitation set forth in (1) and (2) of this Limit of Liability section for each eligible injured person to whom the deductible applies and who sustains bodily injury as the result of any one motor vehicle accident. .
According to the Senate Staff Analysis, section 627.739 F.S. was amended from its earlier version relating to PIP deductibles to change the calculation of the PIP deductible to require that it must be applied to 100 percent of medical expenses, rather than to the current 80 percent of expenses that PIP pays. That analysis goes on to provide this example of the changes and states:
This provision has the effect of requiring PIP to pay more in benefits than it does now if a deductible is elected. For example, under current law: $5,000 medical bill, PIP pays 80 percent, or $4,000, minus $2,000 deductible = $2,000. Under this provision: $5,000 medical bill, minus $2,000 deductible, is $3,000. PIP pays 80 percent x $3,000 = $2,400.
In West’s Florida Practice Series, 7 Fla. Prac, Motor Vehicle No-Fault Law (PIP) sec 2:2 (2010-2011 Ed.), subsection (c) states in pertinent part:
For policies written or renewed prior to October 1, 2003, the case of International Bankers Ins. Co. v. Amone, 552 So.2d 908 (Fla. 1989), required that deductibles be subtracted from the benefits payable after the 80% payable figure was computed and not calculated of the top of the total bill . . . which is best explained by [an] example . . . involving . . .a $2,000.00 deductible under the pre-October 2003 system:
Total Bill = $10,000.00 x 80% (standard PIP coverage) = $8.000.00 – $2.000.00 deductible = $6,000.00 payable from PIP.
That section goes on to state “However using the same example to calculate the application of deductibles for policies written on or after October 1, 2003, the computations would be as follows:
Total Bill = $10.000.00 – $1,000.00 (maximum of PIP deductible) = $9,000.00 x 80% = $7,200.00 payable from PIP.
Based on the foregoing, the Court finds that the Plaintiff correctly applied the insured’s deductible to 100 percent of the amount billed for medical services it provided ($2,484.91) and, as such, it is hereby
ORDERED AND ADJUDGED that the Plaintiff’s Amended Motion for Partial Summary Judgment is GRANTED as to the issue of the application of the insured’s deductible pursuant to section 627.739(2) Florida Statutes.
