20 Fla. L. Weekly Supp. 289a

Online Reference: FLWSUPP 2003VEGAInsurance — Personal injury protection — Coverage — Permissive fee schedule of section 627.736(5)(a)2 can be applied where policy language specifically and unambiguously advises that insurer will pay 80% of reasonable expenses, subject to applicable fee schedules and payment limitations

TIMOTHY M. KEHRIG, DC, P.A. a/a/o Maria Vega, Plaintiff, v. MERCURY INSURANCE COMPANY OF FLORIDA, Defendant. County Court, Fifteenth Judicial Circuit in and for Palm Beach County. Case No: 50-2011-SC-008363 XXXXSB RD. November 29, 2012. Reginald R. Corlew, Judge. Counsel: C. Glen Ged, Chad L. Christensen, and Marius J. Ged, Ellis, Ged & Bodeen, P.A., Boca Raton, for Plaintiff. Louis Schulman, Scott W. Dutton, and Suzette M. Alfonso, Dutton Law Group, P.A., Tampa, for Defendant.

REVERSED. 21 Fla. L. Weekly Supp. 997b, FLWSUPP 2110KEHR.

FINAL JUDGMENT FOR DEFENDANT

This Matter came before the Court for hearing on November 15, 2012 on Defendant’s Amended Motion for Summary Judgment and Plaintiff’s Cross Motion for Summary Judgment on limiting reimbursement of provider charges to the statutory fee schedules. The Court, having heard argument of counsel, having reviewed the record and being otherwise duly advised in the premises, does hereby make the following findings of fact and conclusions of law, and grants Defendant’s motion and denies Plaintiff’s cross motion for summary judgment.

FINDINGS OF FACT

1. MERCURY issued a Florida Personal Auto Policy to Maria Vega (“Vega” or Claimant”) for the policy period September 4, 2010 through March 4, 2010.

2. The policy provided, among other things, coverage for Personal Injury Protection (“PIP”) benefits, subject to a $1,000.00 deductible and further subject to the terms and conditions as contained in the policy and more specifically in the “U85 (05/2010)” endorsement to the policy.

3. The pertinent parts of MERCURY’S U-85 Endorsement state:

FLORIDA PERSONAL INJURY PROTECTION ENDORSEMENT

PART II – PERSONAL INJURY PROTECTION (“PIP”) —

COVERAGE P is deleted and replaced by the provisions set forth in this endorsement:

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The following terms apply to this Part II:

4. PIP benefits will be paid without regard to fault as to who caused the accident as required by and in accord with the No-Fault Law in effect on the day of the accident.

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5. We will only pay for medical benefits:

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b. For medically necessary services, supplies, treatment and care that do not exceed the maximum reimbursement allowance as set forth in the applicable fee schedules and payment limitations, and other payment guidelines, in the No-Fault Law, and any schedules and limitations under federal or state law for medical expenses.

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5. “Medical Benefits” means eighty (80%) percent of all reasonable expenses allowed by the No-Fault Law, subject to the applicable fee schedules and payment limitations, for medically necessary . . .

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8. As authorized by the No-Fault Law, we may use various sources of information to decide if any medical expense is reasonable and necessary and caused by an accident. These sources include but are not limited to:

a. Exams by doctors we select .

b. Review of medical records . .

c. Computer programs and databases . .

d. Published sources of medical expense information.

(Bold in original, underlining added for emphasis.)

4. The terms of Mercury’s policy implement Fla. Stat. §627.736(5). That statute states, in pertinent part:

(1) REQUIRED BENEFITS. Every insurance policy complying with the security requirements of s. 627.733 shall provide personal injury protection . . . of $10,000 . . . as follows:

(a) Medical Benefits. Eighty percent of all reasonable expenses .* * *

(5) CHARGES FOR TREATMENT OF INJURED PERSONS.

(a)

1. Any . . . clinic or other person . . . rendering treatment may charge the insurer and the injured party only a reasonable amount . . . . With respect to a determination of whether a charge . . . is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider . . . and reimbursement levels in the community and various federal and state medical fee schedules . . . and other information relevant to the reasonableness of the reimbursement . .

2. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:

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f. For all other medical services, supplies, and care, 200 percent of the allowable amount under the participating physicians schedule of Medicare part B. . ..

3. For purposes of subparagraph 2., the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect at the time the services, supplies, or care was rendered and for the area in which such services were rendered . .

(Underlining added for emphasis.)

5. On or about September 23, 2010, Vega was injured in an automobile accident. As result of this accident, Vega received medical treatment from TIMOTHY M. KEHRIG, DC, P.A. (hereinafter “KEHRIG” or “PLAINTIFF”). Vega assigned her rights to PIP benefits to KEHRIG.

6. KEHRIG sent MERCURY bills for medical services rendered to Vega as a result of the accident in the amount of $7,155.00 for dates of service September 24, 2010 through February 18, 2011.

7. After deduction of the $1,000.00 deductible, MERCURY paid KEHRIG $4,367.45 by determining 80% of 200% of the charges set forth in the Medicare Part B fee schedule for the services rendered. Therefore, the difference between the bills as charged and the amount paid was $1787.55.

8. KEHRIG claims that MERCURY did not pay the full amount of its claim, because MERCURY did not pay 80% of the amount billed. KEHRIG claims that MERCURY owes the difference between what MERCURY paid and 80% of the amount billed.

9. The parties both moved for summary judgment to determine whether MERCURY was correct in limiting reimbursement of the KEHRIG’S charges in accordance with the fee schedules described in Fla. Stat. §627.736(5)(a)(2) (2008) and MERCURY’S policy of insurance.

10. There is no dispute that MERCURY paid personal injury protection (PIP) benefits to KEHRIG in accordance with the fee schedules set forth in the statute. The issue presented here is whether MERCURY was entitled to do so under the terms of its policy.

CONCLUSIONS OF LAW

The deciding issue in this case is whether MERCURY is entitled to limit reimbursement of KEHRIG’S charges in accordance with the fee schedules in Fla. Stat. §627.736(5)(a)(2), thereby barring KEHRIG from any additional recovery from MERCURY.

Recent Florida decisions have held that the fee schedule provisions of the No-Fault Law cannot be applied absent a specific policy provision implementing the fee schedules. In GEICO Indemnity Company Inc. v. Virtual Imaging Services Inc., 79 So. 3d 55 (3rd DCA 2012) [36 Fla. L. Weekly D2597a] and Kingsway Amigo Insurance Co. v. Ocean Health, Inc., 63 So. 3d 63, 64 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a] the Third and Fourth District Courts of Appeal, respectively, ruled that if an insurer wanted to take advantage of the statutory fee schedules, it needed to state that in its policy.

In Kingsway Amigo, the Fourth District Court of Appeal was faced with the following question of great public importance: “May a PIP insurer nevertheless elect to use the Medicare Part B fee schedules set forth in Fla. Stat. § 627.736(5)(a)(2) when the subject PIP policy specifies that the PIP insurer will pay 80% of medically necessary expenses [and says nothing about limitations based on the fee schedules]?”

In ruling against Kingsway, the court wrote:

The applicable policy made no reference to the permissive methodology of subsection 627.736(5)(a)2. The policy cites the No-Fault Act, states it will pay “80% of medical expenses,” and defines medical expenses as those that it is required to pay “that are reasonable expenses for medically necessary . . . services.” That is the language of subsection 627.736(1)(a), which is amplified by subsection 627.736(5)(a)1. The policy does not say it will pay 80% of 200% of Medicare Part B Schedule as provided in subsection 627.736(5)(a)2. . . The requirement that a PIP policy specify the applicable payment methodology is consistent with the requirement that a subsection 627.736(5)(d) health insurance claim form and subsection 627.736(10)(b)3 demand letter specify “each exact amount” owed. See MRI Assocs. of Am., LLC v. State Farm Fire & Cas. Co., No. 4D10-2807 (Fla. 4th DCA May 4, 2011). Such precision is not possible where the payment calculation methodology is in doubt.

In the clear language of the policy, MERCURY specifically and unambiguously advises the insured and any medical provider that accepts an assignment from the insured that “Medical Benefits” means eighty (80%) percent of all reasonable expenses allowed by the No-Fault Law, subject to the applicable fee schedules and payment limitations. The fact that the policy also defines the means for calculating “reasonable expense,” as mandated by Florida law, is not inconsistent with application of the fee schedules as limitations, and in fact follows from the reasoning in Kingsway.

KEHRIG has argues that MERCURY’S policy is ambiguous, stating that the policy terms are “vague,” since the specific statutory provisions are not referenced with particularity. However, such an argument is inconsistent with Florida decisions on determination of ambiguity in insurance policies.

Penzer v. Transportation Ins. Co., 29 So. 3d 1000 (Fla. 2010) [35 Fla. L. Weekly S73a] is a recent decision of the Florida Supreme Court dealing with insurance policy interpretation. In that case, the certified question posed by the Federal 11th Circuit Court of Appeals was whether coverage was provided under a commercial liability policy for statutory violations involving so-called “blast faxing.” In that case, as here, the Court was faced with the question of determining whether the insurance policy was ambiguous. The Court Stated:

In interpreting insurance contracts, this Court follows the generally accepted rules of construction, meaning that “[i]nsurance contracts are construed according to their plain meaning, with any ambiguities construed against the insurer and in favor of coverage.” US. Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871, 877 (Fla. 2007) [32 Fla. L. Weekly S811a] (citing Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005) [30 Fla. L. Weekly S633a]). “If the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and another limiting coverage, the insurance policy is considered ambiguous.” Garcia v. Fed. Ins. Co., 969 So. 2d 288, 291 (Fla. 2007) [32 Fla. L. Weekly S657a] (quoting Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000) [25 Fla. L. Weekly S211a]). To find in favor of the insured on this basis, however, the policy must actually be ambiguous. Garcia, 969 So. 2d at 291 (citing Taurus Holdings, 913 So. 2d at 532). “A provision is not ambiguous simply because it is complex or requires analysis. . . . ‘[I]f a policy provision is clear and unambiguous, it should be enforced according to its terms.’ ” Garcia, 969 So. 2d at 291 (citation omitted) (quoting Taurus Holdings, 913 So.2d at 532).

. . . . Consequently, the first step towards discerning the plain meaning of the phrase is to “consult references [that are] commonly relied upon to supply the accepted meaning of [the] words.” Garcia, 969 So. 2d at 292 (citing Gov’t Employees Ins. Co. v. Novak, 453 So. 2d 1116, 1118 (Fla. 1984)). [E.G.,] Webster’s Third New International Dictionary . . . (1981). (Emphasis added.)

Penzer, 29 So. 3d at 1005 (emphasis added).

In this case, while the policy language involves a level of analysis necessary to determine the implementation of the No-Fault Law, the PIP endorsement is only capable of one reasonable interpretation, the interpretation that permits MERCURY to apply the statutory fee schedules, including Medicare Part B. Plaintiff has not offered any other reasonable interpretation of MERCURY’S policy. It has not pointed to any other limitations under the No-Fault Law that the policy could possibly be referring to. There being only one reasonable interpretation of the policy language, the policy is not ambiguous as a matter of law, and MERCURY is permitted to limit payment by utilizing the statutory fee schedules.

It is therefore

ORDERED AND ADJUDGED that the Defendant’s Motion for Summary Judgment is hereby granted and Plaintiff’s Cross Motion for Summary Judgment he hereby denied. Judgment is entered in favor of the Defendant, the Plaintiff shall take nothing by this action and the Defendant shall go hence without a day. The Court reserves jurisdiction to determine attorneys’ fees and taxable costs.

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