19 Fla. L. Weekly Supp. 925a

Online Reference: FLWSUPP 1911NEGRInsurance — Personal injury protection — Coverage — Medical expenses — Where policy provides that insurer will pay 80% of reasonable medical expenses and does not say that insurer will pay in accordance with permissive fee schedule of section 627.736(5)(a)2.f., insurer is not entitled to limit reimbursement to permissive statutory fee schedule — Even if insurer is correct that PIP statute is incorporated into policy, resulting ambiguity regarding which method insurer would use to calculate reimbursement must be resolved in favor of insured to require that insurer pay greatest amount possible under policy language

USAA CASUALTY INSURANCE COMPANY, Appellant, v. DPI OF NORTH BROWARD, LLC a/a/o Rachel Negrette, Appellee. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. 11-10404CACE(03). L.T. Case No. 09-03112COCE(55). May 15, 2012.OPINION

(RODRIGUEZ-POWELL, Judge.) THIS CAUSE came before the Court, sitting in its appellate capacity, upon appeal by Appellant, USAA Casualty Insurance Company (“USAA”), of the county court’s entry of final summary judgment in favor of Appellee, DPI of North Broward, LLC (“DPI”). The Court, having considered the briefs filed by the parties and being duly advised in the premises, dispenses with oral argument and finds as follows:

Florida’s Motor Vehicle No-Fault Law requires insurers to provide certain personal injury protection (“PIP”) benefits. § 627.736(1), Fla. Stat. (2008). Subsection 627.736(1)(a) requires insurers to pay “[e]ighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services.” However, under section 627.736(5)(a)(2)(f), an insurer may limit reimbursement to providers of MRI services to eighty percent (80%) of “200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.”

On May 14, 2008, USAA issued an insurance policy providing PIP benefits to Rachel Negrette (“insured”) through November 14, 2008. The policy provided that USAA “will pay, in accordance with the Florida Motor Vehicle No-Fault Law,” eighty percent (80%) of reasonable expenses for medically necessary medical services. The policy further stated that “[i]n determining what is reasonable, [USAA] will consider the following: 1) the actual charge, 2) the charge negotiated with a provider, or 3) the charge determined by a statistically valid database . . . .”

On May 16, 2008, the insured was injured in a motor vehicle accident. As a result, the insured received two (2) MRIs from DPI on August 23, 2008. The insured assigned to DPI her PIP benefits under the USAA policy. DPI billed USAA $3,324.45 for the MRIs. However, USAA applied the reimbursement fee schedule set forth in section 627.736(5)(a)(2)(f) of the 2008 Florida No-Fault Law and paid DPI a total of $2,204.63. On March 10, 2009, DPI filed a breach of contract action against USAA seeking monetary damages for the unpaid PIP benefits.

Both parties moved for summary judgment. USAA argued that the 2008 amendments to the Florida No-Fault Law entitled it to use the Medicare fee schedule formula set forth in section 627.736(5)(a)(2)(f) to calculate the reimbursement owed to DPI. DPI argued that USAA could not limit its reimbursement of PIP benefits pursuant to section 627.736(5)(a)(2)(f) because it did not expressly elect to do so in the language of the policy. As a result, DPI argued that USAA was obligated under the terms of the policy to pay 80% of the amount charged.

The county court entered summary judgment for DPI. Citing State Farm Fla. Ins. Co. v. Nichols, 21 So. 3d 904 (Fla. 5th DCA 2009) [34 Fla. L. Weekly D2275b], the court concluded that, because the policy did not expressly reference or adopt the permissive reimbursement fee schedule set forth in section 627.736(5)(a)(2)(f), USAA was obligated to pay 80% of the amount charged. This appeal followed.

Matters of contractual and statutory interpretation are questions of law to be decided by the trial court. Borden v. E.-European Ins. Co., 921 So. 2d 587, 591 (Fla. 2006) [31 Fla. L. Weekly S34a]; McPhee v. The Paul Revere Life Ins. Co., 883 So. 2d 364, 367 (Fla. 4th DCA 2004) [29 Fla. L. Weekly D2174a]. “The standard of review governing a trial court’s ruling on a motion for summary judgment posing a pure question of law is de novo.” Major League Baseball v. Morsani, 790 So. 2d 1071, 1074 (Fla. 2001) [26 Fla. L. Weekly S465a]; Progressive Auto Pro Ins. Co. v. One Stop Med., Inc., 985 So. 2d 10, 12 (Fla. 4th DCA 2008) [33 Fla. L. Weekly D1052a].

Under Florida law, the scope and extent of insurance coverage is defined by the plain language and terms of the policy. Siegle v. Progressive Consumers Ins. Co., 788 So. 2d 355, 359 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1125a], approved, 819 So. 2d 732 (Fla. 2002) [27 Fla. L. Weekly S492a]; Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005) [30 Fla. L. Weekly S633a]; Grant v. State Farm Fire & Cas. Co., 638 So. 2d 936, 937 (Fla. 1994). “If an insurer intends to restrict coverage, it should use language clearly stating its purpose.” Ward v. Nationwide Mut. Fire Ins. Co., 364 So. 2d 73, 77 (Fla. 2d DCA 1978); see Garcia v. Fed. Ins. Co., 969 So. 2d 288, 290-92 (Fla. 2007) [32 Fla. L. Weekly S657a].

USAA argues that it was entitled to rely on the fee schedule formula to determine the reasonableness of the amount charged notwithstanding the absence of a contractual provision electing to do so because the formula was automatically incorporated into the policy by virtue of the 2008 amendments to the Florida No-Fault Law.¹ Therefore, the question presented in this appeal is whether USAA can limit its reimbursement pursuant to the fee schedule outlined in section 627.736(5)(a)(2)(f) when the policy provides that USAA will pay 80% of reasonable expenses for medically necessary medical services and does not specifically reference the fee schedule.

This issue was decided by the Fourth District Court of Appeal in Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]. In Kingsway, the insurance policy provided that the insurer would “pay in accordance with the Florida Motor Vehicle No Fault. Law, as amended, . . . 80% of medical expenses.” However, the insurer relied on section 627.736(5)(a)(2)(f) and reimbursed the medical service provider the lesser amount of 80% of 200% of the Medicare Part B schedule. The Fourth District found that the insurer was obligated to pay 80% of medical expenses as stated in the policy because the policy “made no reference to the permissive methodology of subsection 627.736(5)(a)(2).” Kingsway, 63 So. 3d at 67-68.

In reaching its conclusion, the Fourth District rejected the insurer’s argument that, “because the PIP statute was incorporated into the policy, it had the unilateral right to ignore the only payment methodology referenced in the policy.” Id. at 67. The Fourth District explained that, under the 2008 Florida No-Fault Law, an insurer is required to pay 80% of all reasonable expenses, but has the safe-harbor option to limit its reimbursement obligation and pay a fixed fee for individual services. Because the statute provides both a mandatory and a permissive method of reimbursement, the Fourth District held that an insurer seeking to avail itself of the permissive safe-harbor option must clearly and unambiguously indicate in the language of the policy its intent to do so. Id. at 68. “[W]hen the insurance policy provides greater coverage than the amount required by statute, the terms of the policy will control.” Id.

As in Kingsway, the policy here provided that USAA would pay 80% of reasonable medical expenses. The policy did not say USAA would pay 80% of 200% of Medicare Part B Schedule as provided in section 627.736(5)(a)(2). The fact that the 2008 statute would allow USAA to opt for the lesser amount does not permit USAA to do so when the policy specifically provided for payment of 80% of reasonable medical expenses. DCI MRI, Inc. v. Geico Indem. Co., 79 So. 3d 840, 842 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D170e]; Geico Indem. Co. v. Virtual Imaging Servs., Inc., 79 So. 3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a].

In addition, the policy did not state that USAA would consider the Medicare fee schedule when determining whether the amount charged for medical services constituted a reasonable expense. The policy plainly stated that USAA would consider the following three factors: 1) the actual charge, 2) the charge negotiated with a provider, or 3) the charge determined by a statistically valid database. USAA did not negotiate with DPI, and did not employ a statistically valid database. Therefore, under the express terms of the contract, “the actual charge” was a reasonable expense which USAA agreed to pay. The language indicating that USAA would “pay, in accordance with the Florida Motor Vehicle No-Fault Law” was insufficient to place the insured on notice that USAA intended to pay less than 80% of the actual charge as stated in the policy. See Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63, 68 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a] (“If the [Insurer] wanted to take advantage of the permissive fee schedule, it should have clearly and unambiguously selected that payment methodology in a manner so that the insured patient and health care providers would be aware of it.”).

Furthermore, incorporating section 627.736(5)(a)(2) into the policy would create an ambiguity regarding the amount USAA would pay for medical services. The policy states that USAA will pay 80% of reasonable medical expenses. However, if section 627.736(5)(a)(2) is incorporated into the policy, the policy would also state that USAA will pay 80% of 200% of the allowable amount under the Medicare fee schedule. This would provide USAA with two alternative reimbursement methods without clarifying which method USAA will use. “A policy indicating that an insurer may distribute reimbursements according to one method without clarifying alternative methods or identifying the factors to be considered in selecting among methods is ambiguous.” Geico Indem. Co. v. Virtual Imaging Servs., Inc., 79 So. 3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]. It is well settled that ambiguities in insurance contracts are resolved in favor of the insured. See, e.g., State Farm Mut. Auto. Ins. Co. v. Menendez, 70 So.3d 566, 570 (Fla. 2011) [36 Fla. L. Weekly S469a]; Goldsby v. Gulf Life Ins. Co., 158 So. 502, 502 (Fla. 1935). Therefore, even if USAA were correct that section 627.736(5)(a)(2) is incorporated into the policy, the resulting ambiguity regarding which method USAA would use to calculate the reimbursement owed to DPI supports the conclusion that USAA was obligated to pay DPI the greatest amount possible under the language of the policy. Geico Indem. Co. v. Virtual Imaging Servs., Inc., 79 So. 3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]. Accordingly, it is hereby

ORDERED AND ADJUDGED that the county court’s final judgment is AFFIRMED.

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¹Section 627.7407(2), Florida Statutes (2008) states that “[a]ny 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.”

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