21 Fla. L. Weekly Supp. 686a
Online Reference: FLWSUPP 2107HENDInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy which stated within the limitations of liability paragraphs that insurer would pay 80% of reasonable expenses and provided that amounts payable shall be subject to any and all limitations authorized by PIP statute as enacted, amended or otherwise continued in law, including, but not limited to, all fee schedules does not clearly and unambiguously elect to limit reimbursement to permissive statutory fee schedule — Plaintiff’s contention that policy is insufficient for referencing “all fee schedules” rather than citing Medicare fee schedule is rejected
FLORIDA HOSPITAL MEDICAL CENTER, a/a/o Eula Henderson, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2012-SC-12741-O. March 19, 2014. Honorable Andrew Cameron, Judge. Counsel: Rutledge M. Bradford, Bradford Cederberg, P.A., Orlando, for Plaintiff. Anthony J. Parrino, St. Petersberg, for Defendant.
REVERSED and REMANDED. FLWSUPP 2301HEND (Allstate Insurance Co. v. Florida Hospital Medical Center, Case No. 2014-CV-000027-A-O, 4-9-2015)
ORDER DENYING DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT GRANTINGPLAINTIFF’S MOTION FOR SUMMARYJUDGMENT AND ENTERING FINALJUDGEMENT FOR PLAINTIFF
This matter came before the Court upon the parties’ cross Motions for Summary Judgment. The Court, having heard argument of the Parties on October 31, 2013, and being otherwise duly advised in the matter, GRANTS Plaintiff’s Motion for Summary Judgment and DENIES Allstate’s Motion for Summary Judgment. The Court finds and rules as follows:
UNDISPUTED FACTS
The parties agree that the facts in this case are undisputed. Allstate’s insured, Eula Henderson, was involved in an automobile accident in on June 15, 2010. Henderson sustained injuries that were covered under Allstate’s policy and the corresponding provisions of §627.736, Florida Statutes (2008), the “PIP Statute.”
Pursuant to a valid assignment of benefits, Plaintiff, Florida Hospital Medical Center, provided emergency medical services to Henderson. The parties stipulate that the medical services were reasonable, related and medically necessary and otherwise covered under Allstate’s policy issued to Henderson on January 14, 2010. Allstate reduced payment for services rendered by Florida Hospital by 25% and then paid 80% of the reduced payment, contending that their policy allowed Allstate to limit reimbursement of the invoice received from the Plaintiff relating to this claim, pursuant to Section 627.736(5)(a)2.b., Florida Statutes.
The Plaintiff challenges Allstate’s ability to limit reimbursements for medical services covered under the Personal Injury Protection (“PIP”) portion of Allstate’s policy of automobile insurance. The Plaintiff specifically contends the language contained in Ms. Henderson’s policy is unclear and/or ambiguous and is insufficient to put Ms. Henderson and Florida Hospital on notice, in clear and unambiguous terms, of Allstate’s intent to rely upon the Medicare fee schedule set forth in Section 627.736(5)(a)2., Florida Statutes.
The Defendant contends that its policy specifically and expressly notifies its policyholder (as well as any assignee providers) that Allstate has elected to apply the fee schedule limitations to PIP reimbursements that are authorized under the No-Fault Statute, and constitutes an enforceable election to apply the reimbursement limitations permitted under Section 627.736(5)(a)2., Florida Statutes, and the recent Florida Supreme Court decision of Geico General Insurance Company vs. Virtual Imaging Services, Inc., 2013 WL 333385, 38 Fla. L. Weekly S517a (Fla. 2013).
Both the Plaintiff and Defendant have provided the Court with various county court orders from around the state which appear to rule in both the favor of both the Plaintiff and Defendant.
THE LAW
Section 627.736(1)(a), Florida Statutes, requires in pertinent part:
REQUIRED BENEFITS: Every insurance policy. . .shall provide personal injury protection. . .as follows:
(a) Medical Benefits: Eighty Percent of all reasonable expenses for medically necessary medical services. . .”
Section 627.736(5)(A)1., Florida Statutes, requires:
“Any physician, hospital, clinic, or other person. . .may charge the insurer and injured party only a reasonable amount pursuant to this section.
. . .With respect to a determination of whether a charge for a particular service, treatment or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, and reimbursement levels in the community and various federal and state medical fee schedules. . . and other information relevant to the reasonableness of the reimbursement for the service, treatment or supply.”
Section 627.736(5)(a)2., Florida Statutes, allows:
“The insurer may limit reimbursement to 80% of the following schedule of maximum charges:
b. For emergency services and care provided by a hospital licensed under chapter 395, 75% of the hospital’s usual and customary charges
Most recently, the Florida Supreme Court, in Geico General Insurance Company vs. Virtual Imaging Services, Inc. 2013 WL 333385, 38 Fla. L. Weekly S517a (Fla. 2013), presented the following Certified Question to the Court:
WITH RESPECT TO PIP POLICIES ISSUED AFTER JANUARY 1, 2008, MAY AN INSURER LIMIT REIMBURSEMENT BASED ON THE MEDICARE FEE SCHEDULES IDENTIFIED IN SECTION 627.736(5)(a), FLORIDA STATUTES, WITHOUT PROVIDING NOTICE IN ITS POLICY OF AN ELECTION TO USE THE MEDICARE FEE SCHEDULES AS A BASIS FOR CALCULATING REIMBURSEMENTS?
In its opinion, the Court answered the certified question in the negative. It held:
“. . . the PIP statute provides that the Medicare fee schedules are one possible method of calculating reimbursements to satisfy the PIP statute’s reasonable medical expenses mandate, but does not provide they are the only method of doing so. Accordingly, we conclude that the insurer was required to give notice to its insured by electing the permissive Medicare fee schedules in its policy before taking advantage of the Medicare fee schedule methodology to limit reimbursements.”
ALLSTATE’S POLICY
The relevant portion of Allstate’s policy provides:
“In accordance with the Florida Motor Vehicle No-Fault Law, Allstate 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. . .
. . . .
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.”
FEE SCHEDULES
The Plaintiff first contends that Allstate’s policy language is insufficient because it only vaguely references “all fee schedules,” rather than more specifically citing the Medicare fee schedule, or specifically reciting the fee schedule language set forth in Section 627.736(5)(a)2., Florida Statutes.
The Court rejects this argument.
In the Virtual Imaging opinion, the Florida Supreme Court only required an insurer to give “notice” of an election to limit reimbursement by the PIP fee schedules and does not, as Plaintiff urges, require any specific recitation of the provisions of Section 627.736(5)(a)2., Florida Statutes. The only PIP “reimbursement limitation” is set forth in Section 627.736(5)(a)2., Florida Statutes. Allstate’s policy language encompasses all of the reimbursement limitations authorized by Section 627.736(5)(a)2., a. through f., Florida Statutes, not just the Medicare fee schedules. There is no ambiguity within the statute as to which reimbursement limitation (i.e. which of the subsections, a. through f.) will apply to a given medical procedure. Each limitation applies to its own category of medical procedure, and a medical service can only fit into one of the subsections in (5)(a)2.a. through f. Thus, there is no ambiguity as to which fee schedule would apply to the charges submitted by Plaintiff, a hospital that provided emergency medical services to its insured, Ms. Henderson.
CLEAR AND UNAMBIGUOUS
The Plaintiff next argues that the Supreme Court’s mandate in Virtual Imaging requires that before a carrier may reimburse in accordance with the Medicare fee schedules set forth in Section 627.736(5)(a)2., Florida Statutes, it must clearly and unambiguously provide notice of its intent to do so. The Plaintiff contends that the policy is unclear because it states that it will pay reasonable expenses under its “Medical Expenses” paragraph, but also states that it will apply all reimbursement “limitations” under Section 627.736. The Plaintiff argues that these policy provisions are contradictory or, at the very least, do not constitute a clear election of the payment calculation methodology that Allstate will use. It argues that Allstate failed to clearly and unambiguously elect the Medicare fee schedule applicable in this case and therefore was required to pay the stipulated reasonable charge billed by Florida Hospital.
The Defendant argues that the Supreme Court, in its Virtual Imaging opinion, differentiated the “coverage mandate” set forth in Section 627.736(1)(a), Florida Statutes, and the permissive methodology outlined in Section 627.736(5)(a)2., Florida Statutes. Contrary to the Plaintiff’s contention, it argues, the Supreme Court has interpreted Section 627.736(1)(a) to mandate that every insurer is required to pay PIP benefits for 80% of “reasonable medical expenses.” The “reasonableness” of a medical expense can then be established by using the “alternative mechanism for determining reasonableness” under subsection (5)(a)2., by applying the enumerated fee schedules.
The Court follows the Plaintiff’s interpretation of the PIP statute.
In Virtual Imaging, The Florida Supreme Court clearly found that the Legislature established two separate and distinct payment methodologies.
The first methodology, the “reasonableness” methodology, is found in Section 627.736(5)(a)1. In setting forth what constitutes a “reasonable” charge under (5)(a)1., the Legislature allowed that consideration may be given to evidence of the usual and customary charges and payments accepted by the provider involved in the dispute, reimbursement levels in the community, various federal and state medical fee schedules, and any other information relevant to the reasonableness of the reimbursement. Thus, under subparagraph (5)(a)1., fee schedules are but one method by which an insurer may determine reasonableness of a submitted charge.
The second methodology, the “permissive” methodology, which includes the “Medicare Fee Schedules”, is found in Section 627.736(5)(a)2. This subsection identifies specific fee schedules to apply as a reimbursement limitation.
In Virtual Imaging, the Supreme Court of Florida approved the holdings of the Third and Fourth District courts, emphatically proclaiming:
“when the plain language of the PIP statute affords insurers two different mechanisms for calculating reimbursements, the insurer must clearly and unambiguously elect the permissive payment methodology in order to rely on it.”
Terms of a policy must be given plain and ordinary meaning and cannot be regarded as mere surplusage. U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871 (Fla. 2007) [32 Fla. L. Weekly S811a]. Moreover, ambiguities cannot be found based on a strained, forced or unrealistic interpretation of a policy provision. Health Options, Inc. v. Kabeller, 932 So. 2d 416 (Fla. 2d DCA 2006) [31 Fla. L. Weekly D1122a]. Furthermore, an ambiguity does not exist merely because an insurance contract is complex and requires analysis to interpret it. Eagle Am. Ins. Co. v. Nichols, 814 So. 2d 1083, 1085 (Fla. 4th DCA 2002) [27 Fla. L. Weekly D596a]
In its policy language, the Defendant elected the “reasonableness” methodology set forth in 627.736(5)(a)1., by stating that it would pay 80% of all reasonable expenses under the Medical Expenses portion of the policy. The language contained in the Limitation of Liability section, which references limitations on reimbursements for covered services, states that “amounts payable shall be subject to all limitations authorized by Section 627.736,. . .including, but not limited to all fee schedules.” Thus, the subject policy language appears to straddle both subsections, (5)(a)1. and (5)(a)2., rather than selecting one. Election of methodologies under both subsections, fails to identify an election of reimbursement methodology of a “reasonable” expense under these competing subparagraphs.
Allstate’s policy language invokes “all limitations on reimbursements” under Section 627.736, Florida Statutes. The policy language does use the word “shall” rather than the word “may” to direct the insured to its intent. “Shall” is generally used to denote mandatory, rather than permissive intent. It therefore indicates that Allstate mandates the use of the language that follows.
However, from this point forward, the policy language loses clarity with modifiers such as “subject to” (governed or affected by; provided that); “any and all” (some; an indefinite number); “as enacted, amended or otherwise continued” (whether or not applicable at the time of the service provided); and “including, but not limited to” (enlargement or as a word of limitation). This language, on its face expands the limitations section beyond the very Medicare fee schedule that it argues it intends to elect.
The Court finds that Allstate’s policy language contained within the Limitations of Liability paragraphs does not clearly and unambiguously put the insured, or its assigns, on notice of its intent to elect the Medicare Fee Schedules as a basis for calculating reimbursements. The policy language is insufficient and ambiguous. The Defendant creates an election of multiple possibilities for reimbursement, rather than evidence an election of one over many, as required by the Virtual Imaging decision.
Should the Defendant have intended to clearly and unambiguously elect a permissive methodology, it could have chosen policy language that referenced only subparagraph (5)(a)2. (which contains only fee schedules) or have limited the policy language to “all applicable fee schedules.” Instead, the language at issue appears to include any and all methodologies, without limitation, and available at any given time.
It is hereby ORDERED AND ADJUDGED:
1. The Plaintiff’s Motion for Final Summary Judgment is GRANTED.
2. The Defendant’s Motion for Final Summary Judgment is DENIED.
3. The Defendant’s Request for Certification is DENIED.
Final Judgment is hereby granted in favor of the Plaintiff, FLORIDA HOSPITAL, a/a/a EULA HENDERSON, wherein the Plaintiff shall recover from the Defendant, ALLSTATE INSURANCE COMPANY, the amount of $2,225.01 for which sum let execution issue forthwith. Post Judgment interest of 4.75% per annum shall be due on this judgment pursuant to Section 55.03, Florida Statutes.
The Court reserves jurisdiction to determine Plaintiff’s entitlement to attorney fees and costs pursuant to Sections 627.428 and 627.736, Florida Statutes.
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