17 Fla. L. Weekly Supp. 842a

Online Reference: FLWSUPP 1709BURT

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 200% of Medicare fee schedule, controls reimbursement — Statutory amendment at issue is not remedial amendment but substantive amendment that should not be applied retroactively — Question certified

BERNARD S. BURTON, D.C., P.A., (Patient: Robin Dubowitz), Plaintiff, vs. GEICO GENERAL INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE 09-00379 (54). May 24, 2010. Lisa G. Trachman, Judge. Counsel: Chad L. Christensen, Ellis, Ged & Bodden, P.A., Boca Raton, for Plaintiff. Julie H. Terry, Roig, Tutan, Rosenberg & Zlotnick, P.A., for Defendant.

ORDER GRANTING SUMMARY JUDGMENT FOR PLAINTIFF

THIS CAUSE having come before the Court on Defendant’s Motion for Summary Judgment and Plaintiff’s Cross-Motion for Summary Judgment on April 19, 2010, and the Court having heard argument from counsel, and otherwise being fully advised in the premises hereby, 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 and medical payment benefits pursuant to F.S. §627.736 and an insurance contract issued by Defendant, GEICO GENERAL INSURANCE COMPANY, (hereinafter “GEICO”).

2. On May 7, 2007, Robin Dubowitz was involved in a motor vehicle accident.

3. On the date of the accident, Robin Dubowitz, had automobile insurance with GEICO.

4. The policy period of Robin Dubowitz’s automobile insurance contract with GEICO was from 12/23/06 to 6/23/07.

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 and $5,000.00 in medical payments coverage. Defendant afforded personal injury protection benefits and medical payments for the May 7, 2007 accident.

7. Following the automobile accident, Robin Dubowitz received medical care and treatment from Plaintiff from 5/7/07-5/29/08.

8. Robin Dubowitz 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 dates of service from 5/7/07-5/29/08.

10. GEICO reduced the allowable amount for the dates of service in the year 2008 to 200% of the 2008 participating physicians fee schedule under Medicare Part B.

11. GEICO paid Plaintiff at 100% of the billed charges for Robin Dubowitz’s dates of service in the year 2007.

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 when the policy at issue was effective from 12/23/06 to 6/23/07, and the accident occurred on May 7, 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 in effect at the time the contract was entered 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.

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.

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). This opinion is persuasive and this Court finds in accordance with same. 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. 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 do not support GEICO’s position that the payment limitations of F.S. §627.736(5)(a)(2), which became effective January 1, 2008 apply in this case. In this case, the law that was in effect at the time the policy was entered into between GEICO and the insured and at the time the automobile accident occurred controls. As such, GEICO was required to pay 100% of the medical charges billed by Plaintiff for dates of service in the year 2008 pursuant to the PIP coverage and medical payments coverage.

IT IS ORDERED AND ADJUDGED:

The Court rules in accordance with its prior decisions on this issue.

WHEREFORE, Defendant’s Motion for Summary Judgment is DENIED. Plaintiff’s Motion for Final Summary Judgment is GRANTED. This Court shall retain jurisdiction to award attorney’s fees and costs.

CERTIFIED QUESTION

The Court, having considered Defendant’s Motion for Certification of the Fourth District Court of Appeal, further FINDS, ORDERS AND ADJUDGES as follows:

1. The Court finds that the issue presented by this case should be certified to the Fourth District Court of Appeal to prevent inconsistent results among the State’s 67 Counties and 20 Judicial Circuits. This issue is capable of great repetition in County Courts throughout the State of Florida and, without controlling precedent from a District Court, will be subject to inconsistent results. Since PIP disputes generally concern coverage amounts of less than $10,000, primary jurisdiction for theses cases rests with the County Courts, and appellate jurisdiction with the Circuit Courts. Thus, the normal appellate process cannot lead to a decision which will govern the entire state.

2. Furthermore, this Defendant alone is currently litigating this issue in hundreds of lawsuits throughout several different counties in the State. Given the Florida Department of Highway Safety and Motor Vehicles’ estimates that approximately 250,000 auto accidents involving personal injuries occur annually in Florida, and given the mandatory nature of PIP insurance and the number of insurance carriers operating within the State, this issue will likely be considered by every County, and thus appealed to, every Circuit Court in Florida.

3. In addition, the dispute concerns a January 1, 2008 change to the PIP law. Since PIP claims are subject to a five (5) year statute of limitations, and since that limitations period does not begin to run until the date of the actual “breach” of the contract occurs,¹ claims of this nature may continue to arise until the year 2015, or later as the statute has now been in effect for two years.

4. Lastly, while the Plaintiff has not specifically argued the point, challenges to legislative acts raise questions of constitutional significance.

5. For those reasons, the Court believes that a District Court decision will not only ensure uniformity in this disputed area of law for all pending future cases, but will also serve to avid the needless waste of judicial resources for County and Circuit Courts throughout the State, as well as the resources of Florida’s PIP insurers and countless known and presently unknown insured individuals.

6. Specifically, because of the continuing conflict within the Seventeenth Judicial Circuit on both the County Court and Circuit appellate levels; the probability that parties will continue to obtain conflicting rulings based upon the “luck of the draw of which County Judge they are assigned at the trial level and which Circuit Judge they are assigned on appeal: and the fact that this issue likely comes up weekly in each county court civil division, this Court certifies to the Fourth District Court of Appeal as being of great public importance:

WHETHER THE FEE SCHEDULES INCLUDED IN THE LEGISLATURE’S JANUARY 1, 2008 RE-ENACTMENT/REVISION TO THE FLORIDA NO-FAULT LAW APPLY TO AN INSURANCE POLICY THAT WAS EFFECTIVE FROM DECEMBER 23, 2006-JUNE 23, 2007.

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¹State Farm Mut. Auto Ins. Co. v. Lee, 678, So. 2d 818 (Fla. 1996)