16 Fla. L. Weekly Supp. 870b
Online Reference: FLWSUPP 169VERNE
Insurance — Personal injury protection — Coverage — Version of PIP statute in effect at time PIP policy was executed, which provides 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 — Statutory amendment at issue is not remedial amendment but substantive amendment that should not be applied retroactively
THE IMAGING CENTER OF WEST PALM BEACH, LLC., (Patient: Edgard Vernet), Plaintiff, vs. GEICO GENERAL INSURANCE COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 502008SC008922XXXXMBRF. July 13, 2009. Debra Moses Stevens, Judge. Counsel: Chad L. Christensen, Ellis, Ged & Bodden, P.A., Boca Raton, for Plaintiff. Dale Parker, Banker, Lopez, Gassler, PA; Daniel Madden, Williams, Leininger & Cosby, P.A, for Defendant.
ORDER ON PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT
THIS CAUSE came on to be heard on June 10, 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 Insurance Co. (hereinafter “GEICO”).
2. On September 18, 2007, Edgard Vernet was involved in a motor vehicle accident.
3. On the date of the accident, Mr. Vernet had automobile insurance with GEICO.
4. The policy period of Mr. Vernet’s automobile insurance contract with GEICO was from June 22, 2007-December 22, 2007.
5. The insurance 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 September 18, 2007 accident.
7. Following the automobile accident, Mr. Vernet received medical care and treatment from Plaintiff on March 14, 2008.
8. Mr. Vernet 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 March 14, 2008 to GEICO for an MRI of the lumbar spine (CPT code 72148).
10. GEICO reduced this bill and only allowed $1,175.06, which is 200% of the 2008 participating physicians fee schedule under Medicare Part B.
11. The allowable amount for the MRI under F.S. §627.736 (2007), is $1,527.57.
12. GEICO reduced Plaintiff’s bill for date of service March 14, 2008, based upon the 2008 version of F.S. §627.736 which did not become effective until January 1, 2008.
13. GEICO paid Daniel Fortunato DC at 80% of the billed charges for Mr. Vernet’s dates of service from 10/1/07-12/20/07.
14. The parties have stipulated that there are no issues of fact and that there is only an issue of law to be decided by the Court.
ISSUE PRESENTED
Whether GEICO is permitted to reduce plaintiff’s bill to 200% of the 2008 participating physicians fee schedule under Medicare Part B based on the 2008 version of F.S. §627.736 which became effective on January 1, 2008 when the policy at issue was effective from June 22, 2007-December 22, 2007 and the accident occurred on September 18, 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.
F.S. §627.736 (2007), provides the minimum amount that must be reimbursed for MRIs as follows:
5. Allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services shall not exceed 175 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually on August 1 to reflect the prior calendar year’s changes in the annual Medical Care Item of the Consumer Price Index for All Urban Consumers in the South Region as determined by the Bureau of Labor Statistics of the United States Department of Labor for the 12-month period ending June 30 of that year, except that allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services provided in facilities accredited by the Accreditation Association for Ambulatory Health Care, the American College of Radiology, or the Joint Commission on Accreditation of Healthcare Organizations shall not exceed 200 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually on August 1 to reflect the prior calendar year’s changes in the annual Medical Care Item of the Consumer Price Index for All Urban Consumers in the South Region as determined by the Bureau of Labor Statistics of the United States Department of Labor for the 12-month period ending June 30 of that year. This paragraph does not apply to charges for magnetic resonance imaging services and nerve conduction testing for inpatients and emergency services and care as defined in chapter 395 rendered by facilities licensed under chapter 395.
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) [16 Fla. L. Weekly Supp. 677a]; Explorer Ins. Co. v. Physicians Group LLC, 16 Fla. L. Weekly Supp. 317a (13th Jud. Cir. Circuit Hillsborough County 2009).
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 the MRI services provided by plaintiff at 200 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually on August 1 to reflect the prior calendar year’s changes in the annual Medical Care Item of the Consumer Price Index for All Urban Consumers in the South Region as determined by the Bureau of Labor Statistics of the United States Department of Labor for the 12-month period ending June 30 of that year. See F.S. §627.736(5)(b)5 (2007).
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.
