17 Fla. L. Weekly Supp. 292b
Online Reference: FLWSUPP 1704MODI
NOT FINAL VERSION OF OPINION
Subsequent Changes at 17 Fla. L. Weekly Supp. 389a
Insurance — Personal injury protection — Coverage — Version of PIP statute in effect at time of treatment, which provides for payment of 80% of 200% of Medicare Part B fee schedule, rather than version in effect at time policy was executed, which provided for payment of 80% of reasonable charges, is applicable — Question certified whether the fee schedules included in the legislature’s January 1, 2008 reenactment/revision to the Florida no-fault law apply to policies which were in effect on or after January 1, 2008
DCI MRI, INC. a/a/o ANTHONY MODICA, Plaintiff, vs. GEICO INDEMNITY COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 502009CC002650 XXXXSB. January 26, 2010. James L. Martz, Judge. Counsel: Dale L. Parker. Harley Kane.
REVERSED. Certified question answered in negative. 37 Fla. L. Weekly D170e
FINAL JUDGMENT AND CERTIFIED QUESTION
THIS CAUSE having come before the Court on Plaintiff’s and Defendant’s cross Motions for Summary Judgment on January 4, 2010, and the Court having heard arguments from counsels for Plaintiff and Defendant, and otherwise being fully advised in the premises hereby,
FINDS, ORDERS AND ADJUDGES as follows:
1. By Joint Stipulation of the Parties, the undisputed facts in this case demonstrate as follows:
A. Anthony Modica was covered by a policy of insurance renewed by GEICO on August 8, 2007 (with a policy period of 9/20/07 through 3/20/08).
B. On January 16, 2008, Mr. Modica was involved in a motor vehicle accident in which he sustained personal injuries.
C. Mr. Modica received an MRI from the Plaintiff which was medically necessary, related to the motor vehicle accident, and covered.
D. The date of service at issue occurred after January 1, 2008.
E. The Plaintiff timely submitted its charges to the Defendant for reimbursement.
F. GEICO timely paid the Plaintiff’s bill based on 200% of the applicable Medicare Part B fee schedule as set forth in Florida Statutes §627.736(5)(a)(2)(f) (2008).
2. The Plaintiff alleges that GEICO should have calculated the reimbursements for its bills at 80% of the charged amount ($1,800.00), rather than limiting the reimbursements in accordance with the formula described in §627.736(5)(a)(2)(f). Fla. Stat. (2008).
A. In support of its position, the Plaintiff has argued that GEICO may not utilize the fee schedule provisions in the new PIP statute because the Insured’s policy does not specifically reference §627.736(5)(a)(2) (2008) or incorporate a specific fee schedule.
B. The Plaintiff has stipulated that the constitutionality of the new PIP statute is not at issue as applied to these facts.
3. Plaintiff’s position is incorrect for several reasons.
4. Firstly, there is no requirement in the PIP statute that insurers amend their policies to specifically reference §627.736(5)(a)(2) (2008) before applying the statutorily authorized fee schedules. The statute states: “The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges . . . .” §627.736(5)(a)(2) Fla. Stat. (2008). This language is permissive, not prohibitive. “Absent some clear warrant for doing so in the statutory context, such permissive provisions should not be read to impose an implied prohibition.” Nationwide Mutual Ins. Co. v. Jewell, 862 So. 2d 79, 85 (Fla. 2d DCA 2003)(cited approvingly by Allstate Insurance Company v. Holy Cross Hospital, Inc., 961 So. 2d 328 (Fla. 2007)) (Emphasis added).
5. Second, the 2008 PIP Statute retains the requirement that charges submitted by the medical providers be reasonable and only gives an option to the insurer to pay those charges at the applicable 200% Medicare Part B Fee Schedule should the insurer choose to do so.
A. Accordingly, payments made pursuant to the fee schedule provisions of the 2008 PIP statute are consistent with the insurer’s obligation (under both the policy and §627.736(1)(a) (2008)) to pay eighty percent of reasonable medical expenses.
B. The Florida Supreme Court has said, “payment at a reduced rate does not violate subsection (1)(a) so long as the insurer pays ‘eighty percent of all reasonable expenses.‘§627.736(1)(a), Fla. Stat. (emphasis supplied).” Holy Cross Hospital, Inc., 961 So. 2d at 335.
C. The insured’s right to coverage and the value of the policy of insurance, are not affected or reduced by GEICO’s utilization of the fee schedule provisions set forth in §627.736(5)(a)(2). Fla. Stat. (2008).
D. Paying providers based on this fee schedule actually benefits the insured. For example, the insured’s limited benefits will provide for more treatment and the insured’s co-pays for said treatment will be reduced. In addition, the insured may not be sued for recovery of unpaid charges (balance billed) by the provider.
E. Additionally, GEICO’s utilization of the statutory fee schedules actually will not result in limiting the insured’s access to medical care. Doctors accepting Workers’ Compensation, Medicare, and/or Medicaid would be able to bill, and be paid, more under the 2008 PIP fee schedule.
F. Regardless, there has never been any expectation that all doctors should or would accept PIP.
G. The premise that a very small percentage of insureds might be harmed by the application of the PIP fee schedule is outweighed by the fact that the vast majority will benefit from its application by receiving additional treatment for the same $10,000.00 benefit. In addition to maximizing the $10,000.00 benefit, providers cannot “balance bill” over the unpaid 20% of the fee schedule. Therefore, the insured owes less out-of-pocket. For example, if the insured owes $100 as 20% on the “reasonable fee” and only owes $10 as 20% of the fee schedule amount, then the insured saves $90 under the fee schedule. If there are only 1,000,000 GEICO PIP insureds in Florida, then these insureds save $90,000,000 by applying the PIP fee schedule. PIP insured’s with other carriers would also benefit from these savings.
H. That is an issue which must be left to the legislature. The legislature surely considered what appropriate reimbursement rates would be, and it created a fee schedule which — in most instances — pays twice the amount that Medicare pays.1 Accordingly, Plaintiff’s argument does not provide a valid basis for ignoring the fee schedules in this case.
6. Third, even if GEICO would otherwise have been required to reference the fee schedule provisions in its policy, both the 2008 PIP statute and the policy itself unequivocally provide for incorporation of the statutory fee schedule provisions.
A. Specifically, Section 19 of the enacting legislation states in its pertinent part: “This act revives and reenacts, with amendments, the Florida Motor Vehicle No-Fault Law, which expired by operation of law on October 1, 2007. This act is intended to be remedial and curative in nature and to minimize confusion concerning the changes made by this act to ss. 627.730-627.7405, Florida Statutes.” Ch. 2007-324, §19 Laws of Fla. (2007).
B. Further, in section 21 (now §627.7407), the legislature specifically stated:
(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. (Emphasis added.)
(3) An insurer shall continue to use the personal injury protection forms and rates that were in effect on September 30, 2007, until new forms or rates are used as authorized by law.
(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. With respect to a person who does not have a personal injury protection policy in effect on such date, the initial endorsement shall not be considered a new policy and shall be issued for a period that terminates on the same date as the person’s other motor vehicle insurance coverage. Except as modified by the insured, the deductibles and exclusions that applied to the insured’s previous personal injury protection coverage with that insurer shall apply to the new personal injury protection coverage. The insurer is not required to provide the coverage if the insured does not pay the required premium by January 1, 2008, or such later date that the insurer may allow.
(5) No later than November 15, 2007, each motor vehicle insurer shall provide notice of the provisions of this section to each motor vehicle insured who is subject to subsection (1). The notice is not subject to approval by the Office of Insurance Regulation. The notice must clearly inform the policyholder:
(a) That beginning on January 1, 2008, Florida law requires the policyholder to maintain personal injury protection (“PIP”) insurance coverage and that this insurance pays covered medical expenses for injuries sustained in a motor vehicle crash by the policyholder, passengers, and relatives residing in the policyholder’s household.
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(c) That if the policyholder already has personal injury protection coverage, that coverage will be amended effective January 1, 2008, to incorporate legally required changes without any additional premium and that the policyholder is not required to take any further action.
(d) That, if the policyholder does not currently have personal injury protection coverage, the current motor vehicle policy will be amended to incorporate the required personal injury protection coverage effective January 1, 2008.
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(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. However, for lawsuits for injuries arising out of an auto accident that occurs between the effective date of this act and December 31, 2007, inclusive, the limitation on lawsuits and tort immunity provided in s. 627.737, Florida Statutes, shall apply if, and only if, the plaintiff and the defendant are insured for personal injury protection coverage that meets the requirements of Florida Motor Vehicle No-Fault Law that was in effect on September 30, 2007.
(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. In order to avoid revising in-force policies, enforcement would depend on policyholders electing to add such coverage, or providing a nonuniform date for coverage to be mandatory as policies renew which results in unequal treatment under the law, or delaying the effective date for at least 1 year to provide a uniform date after all policies have renewed, any of which options would result in a much greater number of uninsured vehicles, an inability of accident victims to obtain medical care, a greater level of uncompensated medical care, higher costs to other public and private health care systems, and greater numbers of persons being subject to penalties for noncompliance. Ch. 2007-324, §21, Laws of Fla. (2008)(emphasis added).
C. The Supreme Court of Florida has repeatedly stated that legislative intent is the polestar that guides a court’s inquiry under the No-Fault Law. United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82, 85 (Fla. 2001); Blish v. Atlanta Cas. Co., 736 So. 2d 1151, 1155 (Fla.1999). Such intent is derived primarily from the language of the statute. Cason v. Florida Dep’t of Mgmt. Servs., 944 So. 2d 306, 312 (Fla. 2006). “Where the wording of the [No-Fault] Law is clear and amenable to a logical and reasonable interpretation, a court is without power to diverge from the intent of the Legislature as expressed in the plain language. . . .” Warren v. State Farm Mut. Auto. Ins. Co., 899 So. 2d 1090, 1095 (Fla. 2005) (quoting Rodriguez, 808 So. 2d at 85). Here, the legislative intent to incorporate the new provisions of the 2008 PIP statute into the existing framework of existing policies is clearly set forth in the statute itself.
D. The amendments contained in the 2008 statutes were “intended to be remedial and curative in nature.” Ch. 2007-324, §19 Laws of Fla. (2007). The enacting legislation specifically stated that it was necessary to immediately revise all PIP polices in order to avoid “unequal treatment under the law.” Ch. 2007-324, §21 Laws of Fla. (2007). Furthermore, the 2008 statute expressly states that the policy at issue,“shall be deemed to incorporate the provisions . . . [of] this act.” Fla. Stat. §627.7407(2) (2008) (Emphasis added).
E. Furthermore, the statute requires that insurers continue using forms in effect prior to implementation of the new PIP statute. Plaintiff argues that GEICO should have amended its policy if it intended to apply the statutory fee schedules, but at the time this policy was written GEICO was prohibited from altering its existing policy forms until new forms were approved by law, pursuant to §627.7407(3). Fla. Stat. (2008).
F. If Plaintiff’s argument were correct, the fee schedules would be a purely superfluous legislative act. The legislature would have placed them in the statute, intending that they could only be used if insurers wrote them into their policies (despite having deemed them incorporated into all existing PIP policies), while at the same time directing insurers not to write anything into their policies. That would be an absurd result. As stated by the Florida Supreme Court, “it is axiomatic that courts should endeavor to avoid giving [a statute] an interpretation that will lead to an absurd result.” Tampa-Hillsborough County Expressway Auth. v. K.E. Morris Alignment Service, Inc., 444 So. 2d 926, 929 (Fla. 1983).
7. Lastly, Plaintiff’s position is also incorrect because the Insured’s policy specifically contemplates — and more importantly incorporates — amendments to the PIP statute.
A. The insurance policy at issue states: “the Company will pay, in accordance with the Florida Motor Vehicle No-Fault Law, as amended . . .” (Emphasis added.)
B. Where an insurance policy is clear and unambiguous, it should be construed according to its plain meaning without resorting to judicial construction. As the Fourth District Court of Appeal recently stated:
[I]f the language found in an insurance policy is not ambiguous or otherwise susceptible of more than one meaning, the court’s task is to apply the plain meaning of the words and phrases used to the facts before it. The courts, therefore, are not free to rewrite an insurance policy or add meaning to it that is not really there. Flaxman v. Government Employees Insurance Company, 993 So. 2d 597, 599 (Fla. 4th DCA 2008) (quoting Classic Concepts, Inc. v. Poland, 570 So.2d 311, 312 (Fla. 4th DCA 1990)).
C. The only possible plain meaning of the “as amended” policy language is to incorporate subsequently enacted amendments into the policy contract. Specifically in this instance, Florida Statutes §627.736(5)(a)(2)(f) (2008). Failure to give effect to the statutory fee schedules would render the language purely superfluous.
D. Accordingly, the policy in this case clearly and unambiguously sets forth the express intention of the parties (GEICO and the Insured) that any subsequent amendments to the PIP statute were to become part of the controlling document and therefore govern the reimbursements at issue. Century Village, Inc. v. Wellington, E, F, K, L, H, J, M, & G, Condominium Association, 361 So. 2d 128, 133 (Fla. 1978).
WHEREFORE Defendant’s Motion for Summary Judgment is hereby GRANTED and Plaintiff’s Motion is DENIED, as payments were properly made pursuant to the 2008 PIP Statute. Final Judgment is hereby awarded to Defendant. Plaintiff shall take nothing by this action and Defendant shall go hence without day.
CERTIFIED QUESTION
The Court, having considered Defendant’s Motion for Certification to the Fourth District Court of Appeal, further FINDS, ORDERS AND ADJUDGES as follows:
8. 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 these 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.
9. 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.
10. 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,2 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.
11. Lastly, while the Plaintiff has not specifically argued the point, challenges to legislative acts raise questions of constitutional significance.
12. 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 and future cases, but will also serve to avoid 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.
13. For the foregoing reasons, this Court certifies the following question to the Fourth District Court of Appeal:
WHETHER THE FEE SCHEDULES INCLUDED IN THE LEGISLATURE’S JANUARY 1, 2008 REENACTMENT/REVISION TO THE FLORIDA NO-FAULT LAW APPLY TO POLICIES WHICH WERE IN EFFECT ON OR AFTER JANUARY 1, 2008.
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1The legislature apparently disagrees with Plaintiff’s claim, as it has in the past stated: “The Legislature finds that the Florida Motor Vehicle No-Fault Law is intended to deliver medically necessary and appropriate medical care quickly and without regard to fault, and without undue litigation or other associated costs. The Legislature further finds that this intent has been frustrated at significant cost and harm to consumers by, among other things, fraud, medically inappropriate over-utilization of treatments and diagnostic services, inflated charges, and other practices on the part of a small number of health care providers and unregulated health care clinics . . . .” Regional MRI of Orlando, Inc. v. Nationwide Mut. Fire Ins. Co., 884 So. 2d 1102, 1111 (Fla. 5th DCA 2004)(quoting Ch. 2001-271, §1 Laws of Fla.).
2State Farm Mut. Auto Ins. Co. v. Lee, 678 So. 2d 818 (Fla. 1996).
