16 Fla. L. Weekly Supp. 965a
Online Reference: FLWSUPP 1610GABA
Insurance — Personal injury protection — Coverage — Version of PIP statute in effect at time PIP policy was executed, which provided for payment of 80% of reasonable charges, rather than version of statute in effect at time of treatment after expiration of policy, which provides for payment of 80% of Medicare fee schedule, is applicable — Amendment at issue is not remedial amendment but substantive amendment that should not be applied retroactively
GERALD T. STASHAK, (Patient: Daniel Gaballa), Plaintiff, vs. GEICO GENERAL INSURANCE COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 502008SC007303XXXXMB. August 4, 2009. Nancy Perez, Judge. Counsel: Chad Christensen, Ellis, Ged & Bodden, P.A., Boca Raton, for Plaintiff. Dale S. Parker, Banker Lopez Gassler, P.A., St. Petersburg; and Daniel P. Madden, Williams, Leininger & Cosby, P.A., West Palm Beach, for Defendant.
ORDER ON PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT
THIS CAUSE came on to be heard on July 6, 2009 upon Plaintiff’s Motion For Final Summary Judgment, and the Court having reviewed the pleadings, heard argument of counsel, and otherwise being fully advised, the Court finds as follows:
STATEMENT OF UNDISPUTED MATERIAL FACTS
1. Plaintiff filed the instant breach of contract lawsuit seeking Personal Injury Protection (“PIP”) benefits pursuant to F.S. §627.736 (2007) and an insurance contract issued by GEICO General Insurance Co. (hereinafter “GEICO”).
2. On July 24, 2007, Daniel Gaballa was involved in a motor vehicle accident.
3. On the date of the accident, Mr. Gaballa had automobile insurance with GEICO.
4. The policy period of Mr. Gaballa’s automobile insurance contract with GEICO was from March 18, 2007-September 18, 2007.
5. The insurance policy number is 4075-83-45-90 and the policy was in full force and effect on the date of the accident.
6. The insurance coverage under the automobile policy provided $10,000 in PIP benefits. Defendant afforded personal injury protection benefits for the July 24, 2007 accident.
7. Following the automobile accident, Mr. Gaballa received medical care and treatment from Plaintiff on October 31, 2007, November 28, 2007, and January 23, 2008.
8. On October 31, 2007 Mr. Gaballa executed an Assignment of Benefits in favor of the Plaintiff, which assigned all rights and benefits under the above referenced insurance policy to Plaintiff.
9. Plaintiff timely submitted its bills for date of service October 31, 2007 to GEICO in the amount of $955.00.
10. GEICO allowed the full $955.00 and paid Plaintiff $764.00 on November 20, 2007, which is 80% of the charges as required under the insurance policy and F.S. §627.736 (2007).
11. Plaintiff timely submitted its bills for date of service November 28, 2007 to GEICO in the amount of $395.00.
12. GEICO allowed the full $395.00 and paid Plaintiff $316.00 on December 10, 2007, which is 80% of the charges as required under the insurance policy and F.S. §627.736 (2007).
13. Plaintiff timely submitted its bills for date of service January 23, 2008, to GEICO in the amount of $450.00.
14. GEICO reduced this bill and only allowed $122.02, which is 200% of the participating physician’s Medicare Part B Fee schedule for the year 2008.
ISSUE PRESENTED
Whether GEICO is permitted to reduce plaintiff’s bill to 200% of the participating physicians fee schedule under Medicare Part B based on the 2008 version of F.S. §627.736 that became effective on January 1, 2008 when the policy at issue was effective from March 18, 2007-September 18, 2007 and the accident occurred on July 24, 2007.
CONCLUSIONS OF LAW
“As a general rule, the statute in effect at the time an insurance contract is executed governs the substantive issues arising in connection with that contract.” Hassen v. State Farm, 674 So.2d 106, 108 (Fla. 1996); Progressive Express Ins. Co., Inc. v. Menendez, 979 So.2d 324, (Fla. 3rd DCA 2008); Esancy v. Hodges, 727 So.2d 308 (Fla. 2nd DCA 1999). Additionally, when a law effects substantive rights, liabilities, and duties, that law is presumed to apply prospectively. Progressive Express Ins. Co., Inc. v. Menendez, 979 So.2d at 330. “The policy rationale underlying this presumption is that “the retroactive operation of statutes can be harsh and implicate due process concerns.” Id. “For this reason, if a statute operates retrospectively, the courts will not apply it to pending cases absent clear legislative intent.” Id. “Even when the Legislature does expressly state that a statute is to have retroactive application, the [Florida Supreme] Court has refused to apply a statute retroactively if the statute impairs vested rights, creates new obligations, or imposes new penalties.” State Farm Mutual Automobile Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995) (citations omitted). “Just because the Legislature labels something as being remedial, however, does not make it so.” Id.
The relevant portion of F.S. §627.736 (2007) provides as follows:
(1)(a) Medical benefits. — Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices, and medically necessary ambulance, hospital, and nursing services.
(5) CHARGES FOR TREATMENT OF INJURED PERSONS. —
(a) Any physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies rendered, and the insurer providing such coverage may pay for such charges directly to such person or institution lawfully rendering such treatment, if the insured receiving such treatment or his or her guardian has countersigned the properly completed invoice, bill, or claim form approved by the office upon which such charges are to be paid for as having actually been rendered, to the best knowledge of the insured or his or her guardian. In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like services or supplies. With respect to a determination of whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, and reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.
F.S. §627.736 (2007) was repealed as of October 1, 2007. The current version of F.S. §627.736(5)(a)(2), which became effective on January 1, 2008, provides:
The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:. . .200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.
Recently, in Physicians Group, LLC (a/a/o Paul Androski) vs. GEICO, 15 Fla. L. Weekly Supp. 1207c, (12th Jud. Cir. Sarasota County October 22, 2008), this exact issue was addressed. In Physician’s Group, the insurance contract was in effect from August 23, 2006-February 23, 2007. The accident occurred during the policy period and medical treatment continued into 2008. The Court held that the PIP statute (F.S. §627.736) in effect at the time the contract was executed controls the rights and liabilities of the parties to the contract, citing Lumbermens Mutual Casualty Company v. Ceballos, 440 So.2d 612 (Fla. 3rd DCA); Hausler v. State Farm Mutual Automobile Ins. Co., 374 So.2d 1037 (Fla. 3rd DCA 1979). Further, the Court held that the re-enacted 2008 version of the PIP Statute contained substantive changes in the law that should not be applied retroactively. The statutory changes do not merely define or clarify the term “reasonable” in relation to medical benefits; it imposes new obligations on the policyholders and their medical providers. The amended statute further provides a fee schedule, which as applied in this case, would allow the insurance company to pay thousands of dollars less in benefits than under the prior “80%” version of the statute. Such a change, which affects the rights and obligations of both the insurance companies and the policyholders, cannot fairly be deemed a remedial amendment, citing State Farm Mutual Automobile Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995). The amendments do not merely alter the process of applying and enforcing the parties’ rights and liabilities; they substantially re-define the actual rights and liabilities, citing Alamo Rent-A-Car Inc. v. Mancusi, 632 So. 2d 1352, 1358 (Fla. 1994). See also, Boca Raton Orthopedic Group, Inc. (Alice Alper) v. Geico General Insurance Company, (15th Jud. Cir. Palm Beach County, FL May 12, 2009); The Imaging Center of West Palm Beach v. GEICO General Ins. Co. (15th Jud. Cir. Palm Beach County, FL July 13, 2009); Explorer Ins. Co. v. Physicians Group, LLC, 16 Fla L. Weekly Supp. 317a (13th Jud. Cir. Circuit Hillsborough County 2009); This opinion is persuasive and this Court finds in accordance with same.
Moreover, GEICO’s position that the 2008 version of F.S. §627.736 applies to any dates of service in the year 2008 even if the insurance policies were not in effect on January 1, 2008 is contrary to F.S. §627.7407 (2008), wherein the legislature states under what circumstances the re-enacted version of F.S. §627.736 (2008) should apply.
F.S. §627.7407 (2008) is titled“Application of the Florida Motor Vehicle No-Fault Law”, and states in pertinent part:
(2) Any personal injury protection policy in effect on or after January 1, 2008, shall be deemed to incorporate the provisions of the Florida Motor Vehicle No-Fault Law, as revived and amended by this act.
(4) Each motor vehicle insurer shall provide personal injury protection coverage to each of its motor vehicle insureds who is subject to subsection (1) beginning on January 1, 2008. . .
(6) This section does not apply the Florida Motor Vehicle No-Fault Law, as revived and amended by this act, prior to January 1, 2008. . . .
(7) The legislature finds that in order to protect the public health, safety, and welfare, it is necessary to revise or endorse policies in effect on January 1, 2008, to add personal injury protection coverage as required by this section, and to provide a uniform date for motor vehicle owners to obtain or continue such coverage and for insurance policies to provide such coverage.
(8) The Legislature recognizes that the Florida Motor Vehicle No-Fault Law was repealed on October 1, 2007, and that vehicle owners are not required to maintain personal injury protection coverage on or after that date until January 1, 2008.
It is clear from the above language that the 2008 version of F.S. §627.736 does not apply in this case as the policy period ended prior to January 1, 2008. Florida case law cited herein and F.S. §627.7407 (2008) do not support GEICO’s position that the payment limitations of F.S. §627.736 (2008) apply in this case. In this case, F.S. §627.736 (2007) was in effect at the time the policy was entered into between GEICO and the insured and at the time the automobile accident occurred. As such, GEICO was required to pay 80% of the medical charges billed by Plaintiff for dates of service in the year 2008.
IT IS ORDERED AND ADJUDGED:
Plaintiff’s Motion for Final Summary Judgment is GRANTED. The Court shall retain jurisdiction to award attorney’s fees and costs.
