21 Fla. L. Weekly Supp. 285b
Online Reference: FLWSUPP 2103KHVOInsurance — Personal injury protection — Coverage — Medical expenses — Where PIP policy specifically advises insured that any amounts payable shall be subject to any and all limitations authorized by PIP statute, including all fee schedules, policy provided sufficient notice of election to use statutory fee schedule as basis for calculating reimbursement
DAVID WALL, M.D., (PATIENT: PAVE; KHVOROSTOV), Plaintiff, vs. ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, Defendant. County Court, 6th Judicial Circuit in and for Pinellas County. Case No. 13-002557SC. November 19, 2013. Kathleen T. Hessinger, Judge. Counsel: Jared Monahan, Ellis, Ged & Bodden, P.A., Boca Raton; and Marc B. Nussbaum, Reeder & Nussbaum, St. Petersburg, for Plaintiff. Anthony J. Parrino, Reynolds Parrino Spano, P.A., St. Petersburg, for Defendant.
AMENDED SUMMARY JUDGMENT FOR DEFENDANT ON ISSUE OF PAYMENT OF MEDICAL EXPENSES PURSUANT TO THE FEE SCHEDULES
This Cause came to be heard before this Court on Plaintiff’s Motion for Summary Judgment and Defendant’s Motion for Summary Judgment with the Parties present, through counsel, and this Court having heard argument, reviewed the affidavits, the memoranda of law, the policy of insurance and relevant case law and being otherwise advised of the premises, it is hereby Ordered and Adjudged as follows:AGREED FACTS AND ISSUE
1. Plaintiff sued Defendant for breach of contract for failing to pay 80 percent of reasonable and necessary medical expenses, pursuant to the policy of insurance.
2. The uncontested facts are that Plaintiff’s assignee, Pavel Khvorostov, was involved in a motor vehicle accident on August 22, 2012 and received medical services from Plaintiff from August 28 to October 25, 2012. The assignee was insured by Allstate, thus Plaintiff made claim for PIP benefits directly to Defendant. Defendant paid 80 percent of 200 percent of the allowable amount under the participating physicians fee schedule of Medicare Part B.
3. Defendant claims it paid this benefit pursuant to the policy of insurance and the personal injury protection (PIP) statute.
4. Both Parties filed Motions for Summary Judgment addressing the same issue, whether the applicable PIP policy of insurance provided sufficient notice of an election to use the fee schedules as the basis of calculating reimbursements.
5. As the effective date for the policy of insurance was July 30, 2012, the applicable PIP statute is §627.736(5)(a)2.f., Fla. Stat. (2011).
HISTORY
6. Since its inception, in 1971, the PIP statute has required insurers to provide coverage for 80 percent of reasonable expenses for medically necessary services. GEICO Gen. Ins. Co. v. Virtual Imaging Serv., Inc., 38 Fla. L. Weekly S517a (Fla. 2013). Throughout the years, the Legislature has revised different aspects of the statute. In particular to this matter, effective in 2008, the Legislature amended the statute to provide more specific guidelines regarding a PIP insurer’s ability to limit reimbursement. The new provisions provided that the insurers may limit reimbursement to 80 percent of a schedule of maximum charges set forth in the statute. Id. The statutory change was reflected in §627.736(5)(a)2., Fla. Stat. (2008).
7. Pursuant to this statutory change, the Legislature permitted the insurers to choose one of two methods of paying PIP benefits. Pursuant to §627.736(5)(a)1., Fla. Stat. (2008), the insurer could pay 80 percent of the reasonable amount billed by the medical provider. This paragraph set forth what the insurer could take into consideration in determining whether a charge was reasonable. The second method in which insurers could pay PIP benefits was set forth in §627.736(5)(a)2.a.-f., Fla. Stat. (2008). The insurer could limit reimbursement to 80 percent of a specified schedule of maximum charges set forth in the statute. For example, §627.736(5)(a)2.a., permitted reimbursement of 80 percent of 200 percent of Medicare for emergency transport and treatment by providers licensed under chapter 401. In particular to the issues herein, §627.736(5)(a)2.f., Fla. Stat. (2008) permitted reimbursement of 80 percent of 200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.
8. As a result of the statutory change, insurers began reimbursing medical providers pursuant to the payment schedule set forth in §627.736(5)(a)2.a.-f.., Fla. Stat. (2008). This caused a flood of lawsuits from the medical providers, as assignees of the insureds, claiming that the insurers could not rely on this part of the statute because the insurance policies only provided for payment of 80 percent of reasonable and necessary medical treatment. The policies did not reference the new statutory change for payment pursuant to the fee schedule. As such, the insurers had to reimburse pursuant to §627.736(5)(a)1, Fla. Stat., not §627.736(5)(a)2.a.-f., Fla. Stat. (2008).
9. As the cases made their way through the county and circuit courts throughout the state, it became clear that the insurance providers needed to amend their policies to elect payment pursuant to these fee schedules. This became very clear, in Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a], when the Court ruled that the insurers are required to specify the fee schedule payment methodology in the PIP policy. Moreover, the Legislature amended the statute, effective July 1, 2012, stating the insurer may limit payment as authorized by the fee schedules only if the insurance policy includes a notice, at the time of issuance or renewal, that the insurer may limit payment pursuant to the schedule of charges specified in the statute. §627.736(5)(a)5., Fla. Stat. (2012). Finally, the Florida Supreme Court ruled, in GEICO Gen. Ins. Co. v. Virtual Imaging Serv., Inc., 38 Fla. L. Weekly S517a (Fla. 2013), that if the policy of insurance did not reference the permissive method of calculation based on the Medicare fee schedules, the insurer could not limit its reimbursement based on those fee schedules.
10. As this issue was winding its way through the courts and Legislature, many insurance providers amended their PIP policies to reference payment of benefits pursuant to the fee schedules in the PIP statute. Upon the insurers amending their policies, the medical providers, as assignee of the insureds, began new litigation alleging the amendment to the policies were not specific enough to clearly and unambiguously advise the insureds of the payment methods. This Court previously ruled on this issue, in Wood Health, Inc. a/a/o Joshua Brown v. Direct Gen. Ins. Co., No. 12-4904SC (Pin. Co. Ct. July 10, 2013), holding that the Direct General insurance policy sufficiently noticed the insured of its reimbursement methods under the PIP statute. This is the same issue in this matter, dealing with Allstate’s policy of insurance for PIP benefits.
RULING
11. The applicable statute in this matter, §627.736(5)(a)2.f., Fla. Stat. (2011) states,
2. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:
f. For all other medical services, supplies, and care, 200 percent of the allowable amount under:
(I) The participating physicians fee schedule of Medicare Part B, . . .
13. The applicable policy of insurance states as follows:
Part III
Personal Injury Protection
Coverage VA
In accordance with the Florida Motor Vehicle No-Fault Law, we will pay to or on behalf of the injured person the following benefits. . .
1. Medical Expenses
Eighty percent of reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices, and medically necessary ambulance, hospital, and nursing services. . .
Limits of Liability
. . .
Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to, all fee schedules.
14. Plaintiff argues that because the insured’s PIP policy of insurance does not specifically set forth the fee schedule language as stated in §627.736(5)(a)2., Fla. Stat., the policy does not clearly and unambiguously advise the insured of the reimbursement limitation.
15. This argument is without merit. The Allstate policy, in this case, specifically advises the insured that any amounts payable shall be subject to any and all limitations, authorized by §627.736 or any other provisions of the Florida Motor Vehicle No-Fault Law, including all fee schedules. (emphasis added) The only amounts payable, subject to limitations by a fee schedule, are those set forth in §627.736(5)(a)2., Fla. Stat. As such, no confusion exists as to Defendant’s payment method.
16. Moreover, the Florida Supreme Court, in GEICO, reviewed the revised GEICO insurance policy and compared it to the policy at issue in GEICO. GEICO, 38 Fla. L. Weekly S517a (Fla. 2013). The Court stated,
Because the GEICO policy has since been amended to include an election of the Medicare fee schedules as the method of calculating reimbursements, and the Legislature has now specifically incorporated a notice requirement into the PIP statute, effective July 1, 2012, our holding applies only to policies that were in effect from the effective date of the 2008 amendments to the PIP statute that first provided for the Medicare fee schedule methodology, which was January 1, 2008, through the effective date of the 2012 amendment, which was July 1, 2012. (emphasis added) Id.
17. By this holding, the Florida Supreme Court appears to be stating that it reviewed the new GEICO policy and the language in the policy is sufficient notice to its insureds that it will elect to limit reimbursements under the fee schedules. In GEICO, the appellee, Virtual Imaging Services, provided the GEICO 2008 and 2011 PIP insurance policies to the Florida Supreme Court in Appellee’s Appendix In Support of Motion to Dismiss and Brief. Defendant, in this case, provided a copy of Appellee’s Appendix In Support of Motion to Dismiss and Brief, to this Court to compare the two insurance policies. The 2008 GEICO policy did not reference the fee schedules, but the 2011 GEICO policy did reference the fee schedules. The 2011 GEICO policy states as follows:
PAYMENTS WE WILL MAKE
The Company will pay in accordance with the Florida Motor Vehicle No Fault Law (as enacted, amended, or newly enacted), and where applicable in accordance with all fee schedules contained in the Florida Motor Vehicle No Fault Law, to or for the benefit of the injured person:
(a) 80% of medical expenses; and. . . (emphasis added)
18. The 2011 GEICO PIP policy of insurance, that appears to be acceptable to the Florida Supreme Court, does not specifically set forth the fee schedule language in §627.736(5)(a)2, Fla. Stat. The language in the 2011 GEICO policy is very similar to the language in Defendant’s policy. Defendant’s PIP policy of insurance states that any amounts payable shall be subject to any and all limitations, authorized by §627.736, including, but not limited to, all fee schedules.
It is therefore Ordered and Adjudged, as a matter of law, that this Court GRANTS Summary Judgment for Defendant on the issue of payment of the insured’s medical expenses based on the fee schedule in §627.736(5)(a)2.f, Fla. Stat. (2011). Plaintiff claims it has a remaining issue of whether Defendant paid statutory interest penalties. This Court reserves jurisdiction to address any issues as to attorney’s fees and costs.
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