17 Fla. L. Weekly Supp. 1128a
Online Reference: FLWSUPP 1711ALBE
Insurance — Personal injury protection — Coverage — Endorsement providing for non-statutory no-fault coverage, which by its terms became effective when no-fault statute expired during policy term and remained effective until first renewal on or after effective date, replaced policy provision requiring insurer to reimburse in accordance with no-fault law and controls reimbursement for accident occurring after enactment of 2008 version of no-fault statute — No merit to argument that 2008 no-fault statute controls reimbursement of medical expenses incurred after renewal of policy where accident occurred when endorsement controlled
BEST AMERICAN DIAGNOSTIC CENTER, INC., (Ana Alberto), Plaintiff(s), vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant(s). County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-016447 COCE (53). June 3, 2010. Robert W. Lee, Judge. Counsel: Caroline Perlegas, Marks & Fleischer, P.A., Fort Lauderdale, for Plaintiff. Michael Rosenberg, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT AND ENTERING FINAL JUDGMENT OF DECLARATORY RELIEF AS TO COUNT I OF PLAINTIFF’S COMPLAINT
THIS CAUSE having come on to be heard before me on Plaintiff’s Motion for Final Summary Judgment, and the Court having reviewed the Motion and court file; reviewed the relevant legal authorities; and heard the argument of counsel; and been sufficiently advised in the premises, the court finds as follows:
On March 12, 2008, Plaintiff, BEST AMERICAN DIAGNOSTIC CENTER, INC., provided two MRIs to Ana Alberto for injuries related to her January 3, 2008 motor vehicle accident. The policy issued by Defendant covering the January 3, 2008 accident was issued August 23, 2007 for a six month period through February 23, 2008. Defendant reduced the allowable amount for the medical services to 200% of the participating physician’s fee schedule under Medicare Part B pursuant to Fla. Stat. §627.736(5)(a)(2)(2008) and calculated these amounts by capping the technical portion at the Outpatient Prospective Payment System (OPPS) amount.
The contract issued by the Defendant contained Policy Form 9810.7 with endorsements 6127HH, 6893MM, 6296GG, and 6910.3. Policy Form 9810.7 with endorsement 6910.3 provided the following with regard to reimbursement of medical expenses arising under No Fault Coverage:SECTION II — NO-FAULT — COVERAGE P ANDMEDICAL PAYMENTS — COVERAGE C
We will pay in accordance with the No Fault Act for bodily injury to an insured, caused by an accident resulting from the ownership, maintenance or use of a motor vehicle.
1. Medical Expenses. 80% of all reasonable expenses incurred for:
(1) medically necessary medical, surgical, X-ray, dental, ambulance, hospital, professional nursing and rehabilitative services, eyeglasses, hearing aids and prosthetic devices; and
necessary remedial treatment and services recognized and permitted under the laws of the state for an injured person who relies upon spiritual means through prayer alone for healing, in accordance with his or her religious beliefs.
To determine whether a charge is reasonable we may consider usual and customary charges and payments accepted by the provider, 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.
We will not pay any charge that the No-Fault Act does not require us to pay, or the amount of any charge that exceeds the amount the No-Fault Act allows to be charged.
No Fault Act means the Florida Motor Vehicle No Fault Law and any amendments(9810.7).
Endorsement 6296GG titled “Non Statutory No Fault Coverage Transition Endorsement” was effective on the date of loss. The 6296GG endorsement provides, in pertinent part:62966GG NON-STATUTORY NO-FAULTCOVERAGE TRANSITION ENDORSEMENT
This endorsement is a part of your policy. Except for the changes it makes, all other terms of the policy remain the same and apply to this endorsement. This endorsement becomes effective on October 1, 2007 and expires on your first renewal on or after October 1, 2007. However, if Florida motor vehicle no-fault law is extended or reenacted on or before October 1, 2007, whether in its current form or in a modified form, then this endorsement will be null and void.
3. NO-FAULT — COVERAGE P as found in the policy booklet and endorsement 6910.3 is replaced by the following:
NON-STATUTORY NO-FAULT COVERAGE
This policy provides Non-Statutory No-Fault Coverage if “P” with a number beside it appears in the “Coverages” space on the declarations page. . .
Insuring Agreement
We will pay the following expenses, losses, and benefits for bodily injury that is sustained by an insured and caused by a motor vehicle accident:
1. Medical Expenses. 80% of all reasonable expenses incurred for:
1. medically necessary medical, surgical, X-ray, dental ambulance, hospital, professional nursing and rehabilitative services, eyeglasses, hearing aids and prosthetic devices; and
2. necessary remedial treatment and services recognized and permitted under the laws of the state for an injured person who relies upon spiritual means through prayer alone for healing, in accordance with his or her religious beliefs.
To determine whether a charge is reasonable we may consider usual and customary charges an payments accepted by the provider, reimbursement levels in the community and various fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the treatment, service, or supply.
Plaintiff filed an action for declaratory relief seeking the court’s determination as to whether Defendant’s insurance contract incorporated the permissive payment limitation contained in Fla. Stat. §627.736(5)(a)(2)(2008) such that the contract would limit the amount of reimbursement to less than 80% of the Plaintiff’s reasonable charges. Plaintiff alleges the contract’s express promise does not limit reimbursement to the optional fee schedule enacted in Fla. Stat. §627.736(5)(a)(2)(2008) and therefore Defendant’s payment does not preclude the provider from seeking payment of the “reasonable amount” in excess of the fee schedule amount. Defendant contends Fla. Stat. §627.736(5)(a)(2)(2008) allows insurers the option to reimburse medical services according to amounts related to 200% of the Medicare Part B fee schedule and they can decide at the time the bills are received which reimbursement schedule they wish to apply.
Defendant further alleges the language of the policy is sufficient to incorporate the permissive language of the statute. For the reasons stated herein, this Court agrees with the Plaintiff1.
In 2003, four years before the instant policy was issued, the Legislature amended the Florida No-Fault Act and incorporated an express repeal provision. See 2003 Florida Laws ch. 2003-411 Section 19. This provision was made part of the No-Fault Statute, and states:
“Effective October 1, 2007, sections 627.730, 627.731, 627.732, 627.733, 627.734, 627.736, 627.737, 627.739, 627.7401, 627.7403, and 627.7405, Florida Statutes, constituting the Florida Motor Vehicle No-Fault Law, are repealed, unless reenacted by the Legislature during the 2006 Regular Session and such reenactment becomes law to take effect for policies issued or renewed on or after October 1, 2006.
(2) Insurers are authorized to provide, in all policies issued or renewed after October 1, 2006, that such policies may terminate on or after October 1, 2007, as provided in subsection (1).”
In this case, Defendant issued a policy of insurance with endorsement 6296GG providing for “Non-Statutory No-Fault Coverage” which, by its terms, became effective when the No-Fault Statute expired on October 1, 2007 during the policy period. Endorsement 6297GG governs Defendant’s reimbursement obligations in this case. As detailed above, the endorsement was to become effective October 1, 2007 unless the No-Fault Law was extended or reenacted on or before October 1, 2007. The 2008 No-Fault Statute was not extended or re-enacted on or before October 1, 2007. (See Law 2007-234(October 11, 2007) enacting the new No Fault Act, effective January 1, 2008). As such, by its own terms, 6296GG “Non Statutory No Fault Coverage Transition Endorsement” controls Defendant’s reimbursement obligations for the January 3, 2008 motor vehicle accident as this endorsement was effective from October 1, 2007 through its expiration upon the first renewal on or after October 1, 2007, which in this case was February 23, 2008. By its terms, this endorsement replaced the Insuring Agreement provision contained in endorsement 6910.3 (which required Defendant to reimburse “in accordance with the No-Fault Act”) and provided a broader form of coverage, requiring Defendant to pay 80% of all medically necessary medical services, notwithstanding of the existence of the No-Fault Act and it does not incorporate any future enactments of the No-Fault Statute.
This Court finds no merit in Defendant’s argument that the application of Fla. Stat. §627.736(5)(a)(2)(2008) is proper because the subject medical services were performed on March 12, 2008, after the renewal. It is clear by the terms of the policy that the subject medical services are covered as the accident occurred during the policy period in which the 6296GG endorsement controlled. The Defendant’s reimbursement obligation is fixed by the endorsement in effect on the date of the accident or loss. The policy promises payment of “eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services. . .” Fla. Stat.§627.736(5)(a)(2), however, provides that “the insurer may limit reimbursement to 80 percent of the following schedule of maximum charges: . . .” and includes various fee schedules for treatments, such as emergency room services (limited to 80% of 75% of the hospital’s usual and customary charge2), non-hospital inpatient services other than emergency care (limited to 200% of Medicare Part A Prospective Payment applicable to the specific hospital3), and for “all other medical services, supplies, and care, 200 percent of the allowable amount under the participating physicians schedule of Medicare Part B” for “all other medical services, supply, and care” in Fla. Stat. §627.736(5)(a)(2)(f)(2008). Fla. Stat. §627.736(5)(a)(2)(2008) leaves no room for interpretation, and sets forth fixed payment schedules for services provided. It does not take into account the “reasonableness” of the provider’s fee4.
The Court further finds that it is required to look to the language of the policy to determine Defendant’s reimbursement obligations. State Farm Florida Insurance Company v. Nichols, 21 So. 3d 904 (Fla. 5th DCA 2009); Wright v. Auto-Owners Insurance Company, 739 So. 2d 180 (Fla. 2d DCA 1999)(The language of the policy, not the statute, determines the coverage provided entitled the insured to coverage because the policy language was broader than the statute and provided greater benefits than the statutory minimums); Sturgis v. Fortune Insurance Company, 475 So. 2d 1272 (Fla. 2d DCA 1985)(An insurance contract can always provide a greater benefit than that required by statute as the statute only establishes minimal coverage and once those requirements are met, parties are free to contract between themselves to add any additional responsibility). The statute does not operate independent of the contract. Nothing in the contract indicates the insurer was going to cap reimbursement to something less than the reasonable charge as set forth in Fla. Stat. §627.736(5)(a)(2)(2008). As such, the provisions of the insurance policy control, which provides that the insurer shall pay 80% of reasonable expenses for medically necessary services.
The Court finds no merit in Defendant’s argument that the reimbursement limitation set forth in Fla. Stat. §627.736(5)(a)(2)(2008) becomes automatically incorporated by virtue of Fla. Stat. §627.7407. In this case, the endorsement provides that the insurer shall pay 80% of reasonable expenses for medical services and that several different factors may be utilized in determining a reasonable amount. Nothing in the contract indicates that the insurer was going to limit payments by applying Fla. Stat. §627.736(5)(a)(2)(2008) as the policy itself does not make reference to the Medicare Part B Fee Schedule or Fla. Stat. §627.736(5)(a)(2)(2008). Although the subject policy was issued in 2007, the 6296GG endorsement replaced the statutory No-Fault endorsement (6910.3) with the Non-Statutory Endorsement that provided broader benefits effective upon expiration of the expiration of the 2007 statute (October 1, 2007). Since Defendant is attempting to apply a more limited reimbursement than provided for in the policy by applying Fla. Stat. §627.736(5)(a)(2)(f)(2008), the policy controls. The “incorporation” provision contained in the re-enactment of the No Fault Act in 2008 was designed to ensure a uniform date that all motor vehicle insurance policies would have mandatory No-Fault coverage. The statute’s incorporation requirement is satisfied by language promising broader reimbursement that exceeds the minimum coverage that the statute permits.
Fla. Stat. §627.736(5)(a)(2)(2008) was enacted during the policy term, but after the policy’s inception. It is evident that when taken as a whole, the 2008 PIP Statute is substantially different than the 2007 PIP Statute which was in effect at the inception of the subject insurance contract. Menendez v. Progressive Express Ins. Co. Inc., __So. 3d __, 2010 WL 1609785 (Fla. 2010). The 2008 PIP Statute clearly affects the substantive rights of Ana Alberto as set forth in her insurance contract with the Defendant. Id. As such, the insurer cannot apply the subsequently enacted statute, as to do otherwise would affect the substantive rights to payment (namely, the contracted payment amount).
Therefore, it is this Court’s holding that the insurer was to pay 80% of reasonable expenses in accordance with the applicable language of the insurance policy at issue. Plaintiff’s action for Declaratory Relief seeks declaratory decree on the threshold issue of whether Defendant’s policy allows it to apply the payment limitation set forth in Fla. Stat. §627.736(5)(a)(2)(2008). As such, this Court does not reach the issue of the whether Defendant properly calculated the amount remitted pursuant to Fla. Stat. §627.736(5)(a)(2)(2008).
It is hereby ORDERED AND ADJUDGED that Plaintiff’s Motion for Final Summary Judgment is hereby GRANTED as to Count I. The court Enters a Final Declaratory Judgment as to Count I of the Complaint in favor of the Plaintiff, and declares that the policy of insurance issued by the Defendant provided “contractual” No Fault benefits. Defendant is obligated to reimburse Plaintiff at 80% of the reasonable amount for the MRI services performed by the Plaintiff. Further, policy issued by the Defendant did not contractually limit Defendant’s reimbursement obligation under Fla. Stat. §627.736(5)(a)(2)(2008) and Defendant is therefore not permitted to limit payment in accordance with that schedule. Therefore, the Defendant is obliged to pay 80% of the reasonable amount for the services charged by the provider as set forth in its contractual language. The court retains jurisdiction to enforce the policy and determine the amount Defendant is obliged to pay for the services at issue. The court also reserves jurisdiction to award Plaintiff’s attorneys fees and costs.
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1Because the Court reaches the conclusion that Fla. Stat. §627.736(5)(a)(2)(2008) cannot be applied to Plaintiff’s services, the issue of whether the Defendant correctly calculated the amount payable by applying the “OPPS” cap is irrelevant.
2Fla. Stat. §627.736(5)(a)(2)(b)(2008).
3Fla. Stat. §627.736(5)(a)(2)(d)(2008).
4Thus consideration given to the usual and customary charges and payments accepted by the provider, reimbursement levels in the community, etc., as articulated in the policy’s definition of how “reasonable charges are to be determined” is irrelevant.
