19 Fla. L. Weekly Supp. 928a

Online Reference: FLWSUPP 1911KEITInsurance — Personal injury protection — Coverage — Medical expenses — MRI — Where PIP policy provides that insurer will pay 80% of reasonable medical expenses, and statutory fee schedule limiting amount medical providers could charge for MRI services was automatically repealed through sunsetting after policy was issued but prior to insured’s accident, insurer was not entitled to limit reimbursement under statutory fee schedule — Insurer had no vested right or legitimate expectation in continuing statutory fee limitations beyond date of sunsetting where insurer knew of scheduled sunsetting before policy was issued

USAA CASUALTY INSURANCE COMPANY, Appellant, v. MILLENNIUM RADIOLOGY, LLC a/a/o Kayla Keiter, Appellee. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. 10-22312CACE(18). L.T. Case No. 08-17104COCE(50). May 30, 2012.

OPINION

(SINGER, Judge.) THIS CAUSE came before the Court, sitting in its appellate capacity, upon appeal by Appellant, USAA Casualty Insurance Company (“USAA”), of the trial court’s entry of final summary judgment in favor of Appellee, Millennium Radiology, LLC. 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:Facts

On July 28, 2007, USAA issued a policy providing personal injury protection benefits to Kayla Keiter (“insured”) through January 28, 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 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 . . . .”

The No-Fault Law in effect at the time the contract was executed required insurers to pay “[e]ighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services.” § 627.736(1)(a), Fla. Stat. (2007). Section 627.736(5)(b)(5) limited the amount MRI providers could charge for services rendered to “200 percent of the allowable amount under the participating physician fee schedule of Medicare Part B.” However, effective October 1, 2007, two months after the Keiter policy was issued, the entire No-Fault Law was automatically repealed by a “sunset” provision enacted as part of the 2003 amendments to the No Fault Law.¹

On November 30, 2007, four months after the policy was issued and two months after the statute was repealed, the insured was injured in a motor vehicle accident. As a result, the insured received an MRI from Millennium on January 28, 2008. The insured assigned to Millennium her PIP benefits under the USAA policy. Millennium billed USAA $2,150.00 for the MRI. However, USAA applied the expired fee limitations set forth in section 627.736(5)(b)(5) and paid Millennium a total of $1,104.66. On November 3, 2008, Millennium filed suit in county court seeking monetary damages for the unpaid PIP benefits and declaratory relief regarding the parties’ rights and obligations under section 627.736(5)(b)(5), Florida Statutes (2007).

Both parties moved for summary judgment. USAA argued that its reimbursement obligation was limited by the statutory cap on charges for medical services because section 627.736(5)(b)(5) was incorporated into the contract by virtue of the policy language stating that USAA “will pay in accordance with the Florida Motor Vehicle No-Fault Law.” USAA asserted that, because the limits were incorporated into the policy before the statute was repealed, it was entitled to rely on those limitations when calculating the reimbursement owed to Millennium for services rendered after the statute had been repealed.

Millennium argued that USAA could not limit its reimbursement pursuant to section 627.736(5)(b)(5) because the fee limitations regulated conduct of a non-party to the insurance contract and could not be incorporated to alter the obligations of the insured and the insurer towards one another. As a result, Millennium argued that USAA was obligated to pay 80% of the amount charged as stated in the policy because the fee limitations were not in effect at the time the MRI services were rendered.

The county court entered summary judgment for Millennium. In reaching its conclusion, the county court reasoned as follows:

This court agrees with the Plaintiff’s argument that the limitations on the amount an MRI provider may charge pursuant to Fla. Stat. § 627.736(5)(b)(5) (2007) was a statutory regulation of a third party (the MRI provider) which existed outside of the contract and did not affect the insurer’s reimbursement obligations to the insured under the contract.

. . . .

[Section 627.736(5)(b)(5)] operates externally from the contract by limiting the amount a third party (MRI Providers) may charge to someone who is afforded this coverage based upon a particular date of service. By regulating the amount MRI providers may charge rather than the reimbursement an insurer is required to pay, the promise in the contract is unaffected. . . . Thus, this section of the Florida No Fault statute was not incorporated into the agreement between the insurer and the insured even though it existed at the time the contract was entered into. Therefore, the amount a provider may charge does not alter or affect the contractual obligations or expectations of the insured or the insurer toward one another. The amount a provider may charge for MRI services is not a contractual obligation since it does not affect the rights or duties of the parties to the contract. See Florida Beverage Corp. v. Division of Alcoholic Beverages and Tobacco, Dept. of Business Reg., 503 So. 2d 396 (Fla. 1st DCA 1987) (Where law that is repealed after contract formation affects the substantial obligations between the parties to the contract, then the repeal will not be effective to impair the obligations of the contract).

. . . .

Here, the policy provides for payment of 80% of medical expenses and does not contain any language that any fee schedule limitation would be applied to medical services, nor does the policy specifically address MRI services. As such, Defendant is obligated to pay 80% of reasonable medical expenses unencumbered by Fla. Stat. § 627.736(5)(b)(5).

R. at 327-34 (emphasis in original). This appeal followed.Analysis

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].

Generally, when parties contract upon a matter which is the subject of statutory regulation, the existing statutory limitations and requirements become part of the contract and define the parties’ contractual rights and obligations toward one another. See Foundation Health v. Westside EKG Assocs., 944 So. 2d 188, 195 (Fla. 2006) [31 Fla. L. Weekly S669b]; Northbrook Prop. & Cas. Ins. Co. v. R & J Crane Serv., Inc., 765 So. 2d 836, 839 (Fla. 4th DCA 2000) [25 Fla. L. Weekly D1956a]. However, an insurer may provide greater coverage than is statutorily required. Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63, 68 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; Carguillo v. State Farm Mut. Auto. Ins. Co., 529 So. 2d 276, 278 (Fla. 1988); Sturgis v. Fortune Ins. Co., 475 So. 2d 1272, 1273-74 (Fla. 2d DCA 1985). Therefore, the scope and extent of insurance coverage is defined by the plain language and terms of the policy, not the statute. 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]; Kingsway, 63 So. 3d at 68; Wright v. Auto-Owners Ins. Co., 739 So. 2d 180, 181 (Fla. 2d DCA 1999) [24 Fla. L. Weekly D2033a]. Accordingly, statutory provisions that would restrict coverage to less than what is clearly stated in the policy will not be incorporated. See Kingsway, 63 So. 3d at 68 (“[W]hen the insurance policy provides greater coverage than the amount required by statute, the terms of the policy will control.”); Wright, 739 So. 2d at 181 (“[T]he language of the policy, not the statute, determines the coverage provided . . . .”). “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].

In this case, the policy provided that USAA would pay 80% of reasonable medical expenses. The policy did not say USAA would pay 80% of 200% of the Medicare Part B Schedule set forth in section 627.736(5)(b)(5). 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 Millennium, and did not employ a statistically valid database. Therefore, under the plain language 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 Ward, 364 So. 2d at 77; Wright, 739 So. 2d at 181 (policy stating the insurer “will pay, in accordance with the No-Fault Law” not construed to limit coverage to the minimum amount required by law). Because incorporating the statutory fee limitations would reduce the amount USAA would pay for medical services to less than the amount stated in the policy, section 627.736(5)(b)(5) was not incorporated into the policy even though it existed at the time the contract was executed. As a result, USAA had no contractual right to the statutory fee limitations.

Furthermore, USAA had no vested right or legitimate expectation in continuing the fee limitations beyond October 1, 2007. Vested rights generally arise where a party has taken detrimental action in reasonable reliance on the state of the law prior to a legislative change. See Doe v. America Online, Inc., 718 So. 2d 385, 388 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D2314a]. In this case, the event that triggered the No-Fault Law’s automatic repeal occurred long before USAA issued the subject policy. Therefore, USAA knew that the No-Fault Law and its limitations would cease to exist shortly after this policy went into effect. However, USAA did nothing to protect itself against the repeal of the statute. Although USAA asserted that it had a vested right to the fee limitations, it failed to establish the elements necessary to prove the existence of a vested right. See Coventry First, LLC v. State, Office of Ins. Reg., 30 So. 3d 552, 558 (Fla. 1st DCA 2010) [35 Fla. L. Weekly D383a] (“A vested right must be ‘more than a mere expectation based on an anticipation of the continuance of an existing law; it must have become a title, legal or equitable, to the present or future enforcement of a demand.’ ” (quoting Div. of Workers’ Comp. v. Brevda, 420 So. 2d 887, 891 (Fla. 1st DCA 1982))). Consequently, the amount Millennium could charge for its services was controlled by the date the services were rendered, not the date the contract was executed. Because the statutory limitations were not in effect at the time the MRI was performed, the county court correctly concluded that USAA was “obligated to pay 80% of reasonable medical expenses unencumbered by Fla. Stat. § 627.736(5)

(b)(5).”

Accordingly, it is hereby

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

__________________

¹The “sunset” provision stated the following:

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.

Ch. 2003-411, §19, Laws of Fla. (2003).

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