21 Fla. L. Weekly Supp. 434a
Online Reference: FLWSUPP 2105DELGInsurance — Personal injury protection — Coverage — Medical expenses — Insurer’s failure to unambiguously elect permissive payment methodology of section 627.736(5)(a)2. in its policy prevents insurer from limiting reimbursement based on Medicare Part B fee schedule
CAROLYN MALDONADO-GARCIA, MD, PA, A/A/O UBALDO DELGADO, Plaintiff, v. MERCURY INDEMNITY CO. OF AMERICA, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 12-02632 SP 24. December 16, 2013. Rodolfo Ruiz, Judge. Counsel: Adam Saben, Shuster & Saben, Miami, for Plaintiff. Suzette M. Alfonso, Tampa, for Defendant.
ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND ENTERING FINAL JUDGMENT FOR THE PLAINTIFF
THIS CAUSE having come before the Court on September 3, 2013 on Defendant’s, MERCURY INDEMNITY CO. OF AMERICA (“Mercury”), Motion for Summary Judgment regarding Limiting Reimbursement of Provider Charges in Accordance with Medicare Fee Schedule, and the Court having considered the Motion, Court file, applicable law, and the arguments of counsel, it is,
ORDERED and ADJUDGED that Defendant’s Motion for Summary Judgment is hereby DENIED for the reasons set forth herein.BACKGROUND
This case involves competing interpretations of a personal injury protection (“PIP”) insurance policy. Plaintiff’s interpretation would result in Mercury having to pay more of the medical bills submitted, while Defendant’s interpretation would result in a finding that the amount Mercury paid complied with the policy at issue. The facts in this case are not in dispute. The claimant was involved in a motor vehicle accident on December 12, 2011 and sought treatment at the Plaintiff medical provider from December 16, 2011 to February 10, 2012. Plaintiff submitted bills to the Defendant for payment under the claimant’s automobile policy for personal injury protection benefits in the amount of $1,410.00. The claimant assigned his rights to bring this case to the Plaintiff. Plaintiff’s position is that the amount owed on the subject medical bills is 80% of the amount billed, which is $1,128.00. Defendant, however, paid a reduced amount of said bills pursuant to an endorsement to its Mercury Policy UC-10 FL 7/2206, which provides, in pertinent part, as follows:
PART II — PERSONAL INJURY PROTECTION (“PIP”)
5. We will only pay for medical benefits:
b. For medically necessary services, supplies, treatment and care that do not exceeded 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.
Pursuant to the PIP endorsement, “medical benefits” are defined as follows:
“80% of all reasonable expenses allowed by the No-Fault Law, subject to the applicable fee schedules and payment limitations, for medically necessary:
a. Medical, surgical, X-Ray, dental, and rehabilitative services, including prosthetic devices, and
b. Ambulance, hospital, and nursing services.
Based upon the aforementioned language in the endorsement, as well as its reading of Section 627.736(5)(a)(2) of the Florida Statutes, Defendant chose to pay an amount of the submitted bills equal to 200% of the Medicare Part B Fee Schedule — a total sum of $959.00. See Fla. Stat. § 627.736(5)(a)(2) (2008). Therefore, the deciding issue in this case is whether Mercury was entitled to limit reimbursement of Plaintiff’s charges in accordance with the permissive fee schedule option found under Section 627.736(5)(a)(2), and pay an amount equivalent to 200% of the Medicare cap pursuant to its policy.
ANALYSIS
As recently explained by the Florida Supreme Court in Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., No. SC12-905, 2013 WL 3332385, at *1 (Fla. Jul. 3, 2013) [38 Fla. L. Weekly S517a], fee schedule provisions of the No-Fault Law cannot be applied absent a specific policy provision implementing said fee schedules. In Virtual, the Court was faced with the question of whether Geico Insurance Company could avail itself of the permissive payment option of Section 627.736(5)(a)(2) without placing its insured on notice that it was opting to pay only the 200% Medicare Part B fee schedule amount. Id. The Court concluded that because the Geico policy failed to clearly and unambiguously elect the aforementioned permissive payment option, Geico was not permitted to limit reimbursements in accordance with the Medicare fee schedules. Id. at *9.
Like the Geico policy in Virtual, the Mercury policy here makes no reference to the permissive methodology of Section 627.736(5)(a)(2), and fails to clearly put the insured on notice that Defendant will pay 80% of 200% of the Medicare Part B fee schedule. See id. at * 10 (explaining that “even if the Medicare fee schedules are incorporated into the insured’s policy, neither the insured nor the provider knows, without the policy providing notice by electing the Medicare fee schedules, that the insurer will limit reimbursements.”) (emphasis added). Consequently, pursuant to Virtual and its progeny, Mercury’s failure to unambiguously elect the permissive payment methodology in its policy under Section 627.736(5)(a)(2) prevents Mercury from limiting its reimbursements based on the Medicare Part B fee schedule.1
As further explained by the Fourth District in Kingsway Amigo Ins. Co. v. Ocean Health, Inc., the choice of reimbursement methodology must be done in a manner that places policyholders on notice of Mercury’s intention to cap benefits pursuant to Section 627.736(5)(a)(2). See Kingsway, 63 So. 3d 63, 68 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]. Here, Mercury’s decision to incorporate language referencing “other payment guidelines, in the No Fault Law, and any schedules and limitations under federal or state law for medical expenses” in order to determine if a medical expense is “reasonable” cannot be characterized as the election of a reimbursement methodology “in a manner so that the insured patient and health care providers would be aware of it.” Id. In fact, the instant policy essentially allows Mercury to choose, on a claim-by-claim basis, whether to pay the “reasonable” amount (if it does not exceed 200% of the Medicare fee schedule), or to pay the 200% Medicare fee schedule amount (if the “reasonable” amount exceeds 200% of the Medicare fee schedule).2 Such confusion is precisely what the Florida Supreme Court sought to eliminate in Virtual by mandating the clear election of Medicare fee schedules before they can be used to limit reimbursements.
Ultimately, Mercury’s policy is susceptible to more than one meaning by including language regarding both mechanisms for calculating reimbursements in its policy — the 80% of reasonable medical expenses methodology in Section 627.736(5)(a)(1), and the 80% of 200% of Medicare Part B methodology in Section 627.736(5)(a)(2). Such ambiguity must be resolved in favor of the insured. See American Independent Ins. Co. v. Gables Ins. Recovery Inc., 19 Fla. L. Weekly Supp. 14b (Fla. 11th Cir. Ct. App., Oct. 12, 2011) (citing Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000) [25 Fla. L. Weekly S211a] (requiring that ambiguous provisions be liberally interpreted in favor of the insured and strictly against the drafter)). Thus, pursuant to Virtual, the policy at issue fails to clearly elect the permissive fee schedule option found under Section 627.736(5)(a)(2). Accordingly, Mercury was not entitled to limit reimbursement of Plaintiff’s charges by paying an amount equivalent to 200% of the Medicare cap.CONCLUSION
Based upon the foregoing, it is ORDERED and ADJUDGED that the Defendant’s Motion for Summary Judgment is DENIED. As per stipulation of the parties that (1) this issue is dispositive of the case; and (2) that this Court shall enter final judgment upon this ruling, the Court hereby enters final judgment for the Plaintiff in the amount of $164.88, plus applicable interest. The Court retains jurisdiction for the awarding of attorney fees and costs.
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1Several Florida county courts have similarly found that the language contained in the instant Mercury policy is ambiguous. See, e.g., Stand-Up MRI of Miami v. Mercury Indemnity Co. of Fla., 20 Fla. L. Weekly Supp. 1000c (Fla. Broward Cty. Ct., Jul. 23, 2013); Rivero Diagnostic Cir., Inc. v. Mercury Ins. Co. of Fla., 20 Fla. L. Weekly Supp. 596b (Fla. Miami-Dade Cty. Ct., Feb. 7, 2013); Oakland Park MRI, Inc. v. Mercury Ins. Co. of Fla., 20 Fla. L. Weekly Supp. 586a (Fla. Broward Cty. Ct., Feb. 21, 2013).
2Furthermore, by use of the phrase “subject to” in the PIP endorsement, the Court notes that Defendant has not incorporated the optional provisions of the Medicare fee cap into the policy. See St. Augustine Pools, Inc. v. James M. Barker, Inc., 687 So. 2d 957, 958 (Fla. 5th DCA 1997) [22 Fla. L. Weekly D432a] (holding that the words “subject to” in a contract are distinct from “incorporating” provisions of another document). Mercury has said nothing more than what is already true — all PIP policies are “subject to” these provisions. Defendant must clearly and unambiguously take the next step to incorporate these optional provisions into the policy if it desires to use the alternative reimbursement limitations allowed by Section 627.736(5)(a)(2). See Kingsway, 63 So. 2d at 68.
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