19 Fla. L. Weekly Supp. 432a
Online Reference: FLWSUPP 1906MIAMInsurance — Personal injury protection — Coverage — Policy issued during statutory gap period — Retroactive application of 2008 version of PIP statute to policy issued prior to enactment of statute was unconstitutional infringement on parties’ right to contract with one another where effect of application of 2008 statute was substantial reduction in coverage
MIAMI MEDICAL GROUP, INC., Appellant, v. U.S. SECURITY INSURANCE COMPANY, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 10-046AP. February 22, 2012. An appeal from the County Court of Miami-Dade County. Norma S. Lindsey, Judge. Counsel: Virginia M. Best, Lopez & Best, Marlene S. Reiss, P.A., and Greg Pessin, P.A., for Appellant. David B. Pakula, for Appellee.
(Before KORVICK, GENDEN and BRENNAN, JJ.)
(BRENNAN, Judge.) THIS CAUSE is before this court on an appeal of a County Court order which granted Summary Judgment in favor of US SECURITY INSURANCE and denied Summary Judgment to MIAMI MEDICAL GROUP on the issue of whether F.S. 627.736(5)(a)(2), as enacted on January 1, 2008, permits an insurer to provide payments for medical services rendered under the Medicare Part B/Worker’s Compensation Fee Schedule in Florida’s Motor Vehicle No-Fault Law, when the insurance contract makes no reference to such fee schedule.
U.S. Security Insurance Company issued an automobile insurance policy on November 8, 2007, during a “gap” period when Florida’s Motor Vehicle No-Fault Law and PIP coverage requirements were not in effect.1 A new version of the Florida No-Fault Law and PIP coverage requirements became effective on January 1, 2008, and provided that the new law would apply to insurance policies in effect on January 1, 2008.
The claimant was involved in an automobile accident on January 23, 2008 and sought treatment through Miami Medical Group. Claimant assigned her benefits from the insurance policy to Miami Medical Group, who sought payment from U.S. Security Insurance. Miami Medical asserted that it was entitled to receive 80% of the reasonable expenses subject to the deductible and 80% co-insurance rate, and calculated that U.S. Security should have paid $8,779.75 on the claims.
In calculating coverage payments, U.S. Security applied the new fee schedule included in the newly modified section 627.736(5)(a)(2) of the Florida No-Fault Law which became effective January 1, 2008. Miami Medical provided medical treatment to Claimant from February 8, 2008 through April 14, 2008, and billed U.S. Security $10,974.69 for those services. After applying a $1,000 deductible under the policy, U.S. Security applied the Medicare Part B/Worker’s Compensation fee schedule pursuant to section 627.736(5)(a)(2) of the Florida Statute. Based upon this fee schedule U.S. Security reduced the medical bill from $10,974.69 to $6,347.71, and applying the 80% co-insurance rate of the policy, paid Appellant $5,156.08.
On March 11, 2009, Miami Medical filed suit to collect the remaining amounts it alleged it was due under the insurance contract. U.S. Security filed an Answer and Affirmative Defenses asserting that it had rendered payment in full for any and all benefits due under the policy and sought dismissal of the suit. The Parties filed cross-motions for summary judgment on the issue of whether the Medicare Part B/Worker’s Compensation fee schedule applied to the medical bills. The trial court found that the Medicare Part B/Worker’s Compensation fee schedule applied to the medical bills, denied Miami Medical’s Motion for Summary Judgment, granted U.S. Security’s Motion for Summary Judgment, and entered final judgment in favor of U.S. Security.
It is the position of Miami Medical that retroactive application of the new fee schedule unconstitutionally impaired the insurance contract. This appeal followed.
This court is satisfied that the 2008 version of Florida’s No-Fault statute indicates it is to be retroactively applied, because the plain language of the act clearly indicates that is what the legislature intended. Specifically, F.S. 627.7407 (2) states “Any personal injury protection policy in effect on or after January 1, 2008, shall be deemed to incorporate the Provisions of the Florida No-Fault Law, as revived and by the act.”2 In light of this, the initial question presented here is whether retroactive application of the statute on these facts impairs the rights and obligations agreed upon by the parties in the renewal contract issued November 8, 2007.
The law in effect at the time an insurance policy is issued governs issues arising under the policy. Lumbermens Mut. Casualty Co. v. Ceballos, 440 So. 2d 612 (Fla. 3d DCA 1983). With this principle in mind, the Florida Supreme Court in Menendez found that assessing the constitutionality of a retroactive application of a law should be accomplished by comparing the law at the time the insurance policy was issued with the law as amended. Menendez, 35 So. 3d at 877-78. The Court stated, “[i]n order to answer [whether retroactive application of the statute ‘attaches new legal consequences to events completed before its enactment’], we compare section 627.736 as it existed at the time the insured’s’ insurance policy was issued with the 2001 amendment.” Id.
In this case, the No-Fault Law was not in effect at the time the policy was initially issued, so the comparison to determine “impairment” should be made between the language of the insurance policy regarding reimbursement schedules, and section 627.736(5) of the Florida No-Fault Law put in effect on January 1, 2008. Therefore, the court must examine the impact the statutory changes in calculating coverage have on what was stated in the terms of the contract to which both the insured and the insurer agreed.
The contract in question provided coverage for “80% of medical expenses”, and medical expenses were defined in the contract as “reasonable expenses” for a variety of “necessary” medical services. Nothing in the policy defines what constitutes reasonable, nor does the policy provide a method for objecting to the reasonableness or necessity of the coverage. However, in essence, application of the Medicare Part B/Worker’s Compensation fee schedule resulted in coverage being reduced by thousands of dollars. Because the impact of this retroactive application is substantial, the trial court erred in granting summary judgment in favor of U.S. Securities Insurance Company.
CONCLUSION
The plain language of F. S. 627.736(5)(a)(2), as enacted on January 1, 2008, clearly indicates the legislature intended that it be retroactively applied. The impact of this retroactive application, however, is an unconstitutional infringement upon parties’ rights to contract with one another, and violates Article I, section 10 of the Florida Constitution. Specifically, retroactive application changes, without notice, the nature of the insurers’ obligations regarding payment of claims for reimbursement for medical expenses, potentially changes the nature of the coverage obligations of the insured by altering access to medical services, and shifts payment obligations from the insurer to the insured. For these reasons, this court reverses the trial court’s granting of summary judgment in favor of U.S. Security Insurance, and directs the trial court to enter summary judgment in favor of Miami Medical.
Appellate Attorneys Fees
Accordingly, Miami Medical Group, Inc., as the prevailing party, is hereby GRANTED attorney’s fees and costs incurred on appeal. This matter is remanded to the trial court to determine the amount of a reasonable fee. (KORVICK and GENDEN, JJ., concur)
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1Appellant argues the insurance policy in question is a renewal policy originally issued circa 2005. See Miami Medical’s Initial Brief at 9. However, “upon each renewal of an insurance policy[,] an entirely new and independent contract of insurance is created.” Geico Indem. Co. v. Physicians Group, LLC, 47 So. 3d 354, 356 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D1850a] (quoting Marchesano v. Nationwide Prop. & Cas. Ins. Co., 506 So. 2d 410, 413 (Fla.1987). Thus, the relevant date for the purposes of this analysis is November 8, 2007.
2The previous version of the law had sunset on October 1, 2007, creating a three month gap period where the Florida Motor Vehicle No-Fault Law did not govern automobile insurance policies.
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