17 Fla. L. Weekly Supp. 1124b
Online Reference: FLWSUPP 1711LAMO
Insurance — Personal injury protection — Coverage — Where policy issued after enactment of 2008 version of PIP statute provides that insurer will pay 80% of reasonable expenses for medical services and does not indicate that insurer was going to limit reimbursement to 200% of allowable amount under Medicare fee schedule as permitted by 2008 statute, policy terms control reimbursement
NATIONAL NUCLEAR CENTER, INC., D/B/A, HOLLYWOOD DIAGNOSTIC CENTER, (Marie Lamothe), Plaintiff(s), vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant(s). County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-017569 COCE 54. April 22, 2010. Lisa Trachman, Judge. Counsel: Amir Fleischer, Marks & Fleischer, P.A., Fort Lauderdale, for Plaintiff. Fernando Roig, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT AND ENTERING FINAL JUDGMENT OF DECLARATORY RELIEF AS TO COUNT IOF PLAINTIFF’S AMENDED 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 being otherwise fully advised in the premises, the court finds as follows:
On April 7, 2008, Plaintiff, NATIONAL NUCLEAR CENTER, INC., D/B/A, HOLLYWOOD DIAGNOSTIC CENTER, provided a lumbar MRI to Marie Lamothe for injuries related to her March 19, 2008 motor vehicle accident. Pursuant to an assignment of benefits, Plaintiff billed Defendant $1,800.00 for the MRI provided to its insured, Marie Lamothe. In response, Defendant reduced the bill to $870.52 and paid $696.42 (representing 80% of the “approved amount”). Defendant alleges and maintains it “paid the appropriate amount pursuant to Florida Statute §627.736(5)(A)(2) (f) and (5)(A) (3).” Defendant issued the policy covering Marie Lamothe on January 16, 2008 for a six month policy period through July 16, 2008.
The policy language, as stipulated by the parties, states as follows:
What we pay
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:
a. medically necessary medical, surgical, X-ray, dental, ambulance, hospital, professional nursing and rehabilitative services, eyeglasses, hearing aids and prosthetic devices; and
b. 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.
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 herein, this Court agrees with the Plaintiff.
The 2008 version of Fla. Stat. § 627.736 provides both required benefits and an optional limitation of reimbursement. Fla. Stat. §627.736(1)(a) requires 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 charge1), non-hospital inpatient services other than emergency care (limited to 200% of Medicare Part A Prospective Payment applicable to the specific hospital2), 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). Fla. Stat. §627.736(5)(a)(2) 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 fee3.
The policy itself does not make reference to the Medicare Part B Fee Schedule or Fla. Stat. § 627.736(5)(a)(2). Defendant maintains the language “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 does not require us to pay, or the amount of any charge that exceeds the amount the No-Fault Act allows to be charged” sufficiently incorporates the payment limitation in Fla. Stat. §627.736(5)(a)(2) by making reference to the “amount of any charge that exceeds the amount the No Fault Act allows to be charged.” This language, however, is inapplicable to the 2008 version of the No Fault Statute as the statute does not restrict or limit amounts that may be charged4.As demonstrated by the Plaintiff, the 2003-2007 version of the No Fault Act did contain restrictions on the amounts providers were allowed to charge insureds and insurers. There are four instances in the 2003-2007 version of the No Fault Statute which the legislature limited amounts that were permitted to be charged:
Fla. Stat. §627.736(5)(b)(2)(2003-2007)“Charges for medically necessary cephalic thermograms, peripheral thermograms, spinal ultrasounds, extremity ultrasounds, video fluoroscopy, and surface electromyography shall not exceed the maximum reimbursement allowance for such procedures as set forth in the applicable fee schedule or other payment methodology established pursuant to s.440.13”
Fla. Stat. §627.736(5)(b)(3)(2003-2007),“Allowable amounts that may be charged to a personal injury protection insurance insurer and insured for medically necessary nerve conduction testing . . . shall not exceed 200 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001,. . .”
Fla. Stat. §627.736(5)(b)(4)(2003-2007)“Allowable amounts that may be charged to a personal injury protection insurance insurer and insured for medically necessary nerve conduction testing that does not meet the requirements of subparagraph 3. shall not exceed the applicable fee schedule or other payment methodology established pursuant to s. 440.13”
Fla. Stat. §627.736(5)(b)(5)(2003-2007), “Effective upon this act becoming a law and before November 1, 2001, allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services shall not exceed 200 percent of the allowable amount under Medicare Part B for year 2001, for the area in which the treatment was rendered. Beginning November 1, 2001, allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services shall not exceed . . .” (Emphasis added).
The 2008 statute, however, contains none of these restrictions. There is no longer a limit on the amount the No Fault Act “allows” to be charged (other than a reasonable amount in accordance with Fla. Stat. § 627.736(5)(a)(1)) and there is no use of the terms “shall”, “shall not exceed”, or “may be charged” for services amounts of charges. Plaintiff submitted a Request for Judicial Notice of a letter from State Farm to the Office of Insurance Regulation dated September 23, 2003, as recorded in the public records of the Office of Insurance Regulation OIR File Number: FCC 03-12255 along with first page of State Farm’s Language Comparison of endorsement 6910.2, explaining the language in endorsement 6910.2 which first added the language “amount of any charge that exceeds the amount the No Fault Act allows to be charged” to the policy in order to demonstrate Defendant’s intent to incorporate the 2003 changes to 5(b)(stated above).
In this case, the policy provides that the insurer shall pay 80% of reasonable expenses for medical services. The policy language even quotes the statutory language in Fla. Stat. 627.736(5)(a)(1) of how a determination of reasonableness may be made. Nothing in the contract indicates that the insurer was going to limit payments as permitted by Fla. Stat. §627.736(5)(a)(2).
The court finds that the case of State Farm Florida Insurance Company v. Nichols, 21 So. 3d 904 (Fla. 5th DCA 2009) controls. In Nichols, the court looked to the language of the policy, not the statute, in determining an insurer’s responsibility where State Farm issued policies which required State Farm to pay the full amount of an appraisal award within sixty days of the award. State Farm, like the Defendant here, relied on a statute which states an insurer “may limit” payment and withhold funds until the homeowners entered into contracts for repairs. The policy, however, required State Farm to pay the full amount, regardless of the existence of repair contracts. The court held that the language of the statute was permissive, not mandatory, and the language of the policy controlled and that the insurer had to pay according to the language of the insurance contract. The holdings and analyses in 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) and 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) are also instructive.
While Fla. Stat. §627.736(1)(a) is mandatory, Fla. Stat. §627.736(5)(a)(2) includes the permissive language “may limit.” This court holds that Fla. Stat. §627.736(5)(a)(2) is permissive, and not mandatory. As such, the provisions of the insurance policy control, which provides that the insurer shall pay 80% of reasonable expenses for medically necessary services. 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). If the insurer had wished to take advantage of the opportunity afforded by the Legislature to limit reimbursement according to fixed formulas established by the permissive fee schedule, rather than a “reasonable” payment, then the contract must have included language that unequivocally limited reimbursement to the schedule set forth in Fla. Stat. §627.736(5)(a)(2). Suggesting that a policy can simultaneously incorporate a limited reimbursement fixed by a fee schedule while at the same time promise that it will reimburse a reasonable amount that is not limited by a fixed fee schedule renders the contract illusory. This court further disagrees with Defendant’s position that the statute operates independent of the contract to allow the insurance company to decide, as each bill is received, whether to pay it at 80% of the reasonable amount or a fixed reimbursement limited to 200% of Medicare. This could result in not only different providers treating the same insured being paid at different reimbursement levels, it could result in the same provider providing the same service, governed by the same policy, billing at the same amount, ultimately being reimbursed by the insurance company in different amounts. Such a result would render the promise ambiguous and meaningless.
As such, 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.
Therefore, it is hereby ORDERED AND ADJUDGED that Plaintiff’s Motion for Final Summary Judgment is hereby GRANTED. The court Enters a Final Declaratory Judgment as to Count I of the Amended Complaint declaring that the Defendant is obligated to reimburse Plaintiff at 80% of the reasonable amount for the MRI services performed by the Plaintiff and that the limited reimbursement schedule contained in Fla. Stat. §627.736(5)(a)(2)(2008) was not selected by Defendant in its contract and Defendant is therefore not permitted to limit payment in accordance with that schedule. 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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1Fla. Stat. §627.736(5)(a)(2)(b)(2008)
2Fla. Stat. §627.736(5)(a)(2)(d)(2008)
3Thus 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.
4The only other limitation is a generic prohibition that a provider may not charge an amount in excess of what is customarily charged for the services or supply at issue. Fla. Stat. §627.736(5)(a)(1).
