21 Fla. L. Weekly Supp. 368a
Online Reference: FLWSUPP 2104FULTInsurance — Personal injury protection — Coverage — Medical expenses — Where PIP policy expressly states that insurer will pay 80% of all medically necessary expenses and does not incorporate language of permissive statutory fee schedule, insurer is not entitled to apply fee schedule limitations — Neither section 627.7407, which incorporates No-Fault Law into existing policies to add PIP coverage, nor policy’s reference to payment in accordance with No-Fault Law alters express promise of contract to pay 80% of all medically necessary expenses — No merit to argument that reasonable amount payable under PIP statute is now capped by permissive fee schedule — Question certified: Does section 627.736(5)(a)2 through 5 (2008) limit the insured or his assignee from claiming the reasonable amount of services in excess of that subsection’s schedule where the policy of insurance expresses no such limitation but instead, expressly promises reimbursement of all medically necessary expenses?
HALLANDALE BEACH ORTHOPEDICS INC., a/a/o AZRIAH FULTON, Plaintiff(s), vs. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Defendant(s). County Court, 17th Judicial Circuit in and for Broward County, Civil Division. Case No. 09-07318 COCE 55. October 25, 2010. Sharon L. Zeller, Judge. Counsel: Gary Marks, for Plaintiff. Jacqueline Whittingham, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT REGARDING DEFENDANT’S AFFIRMATIVE DEFENSE OF PAYMENT AND DENYING DEFENDANT’S AMENDED MOTION FOR SUMMARY JUDGMENT RE: PAYMENT TENDERED; APPLICATION OF THE MEDICARE PART B FEE SCHEDULE AND CERTIFICATION TO THE FOURTH DISTRICT COURT OF APPEAL AS A QUESTION AFFECTING THE UNIFORM ADMINISTRATION OF JUSTICE PURSUANT TO FLA. STAT. §34.017(1)(b), ANDFLA. R. APP. PRO. 9.030(b)(4) AND 9.160.
THIS CAUSE having come before the court on September 28, 2010 for hearing on the Parties’ Cross Motions for Final Summary Judgment, and the Court having reviewed the motions, attachments; entire court file and relevant legal authorities; having heard the argument of counsel; and having been sufficiently advised in the premises, finds as follows:
1. This lawsuit involves a dispute over the proper interpretation and application of the statute that defines personal injury protection insurance benefits in Florida. The parties disagree over their respective rights and obligations arising from Florida Statutes §627.736 (1)(a), §627.736(5)(a)(1), and §627.736(5)(a)(2)(a-f).
2. The parties both claim undisputed facts allows the court to enter Summary Judgment with respect to the legal question of whether Defendant satisfied its contractual obligation to reimburse No Fault benefits by applying §627.736(5)(a)(2)(f) (2008).
3. The undisputed facts reveal that between November 20th, 2008 through January 26th, 2009, Plaintiff, HALLANDALE BEACH ORTHOPEDICS., provided medical care to Azriah Fulton for injuries related to his November 7th, 2008 motor vehicle accident. The policy issued by Defendant covering the November 7th, 2008 accident was issued June 21st, 2008 for a twelve month period through June 21st, 2009. The Plaintiff filed this lawsuit after Defendant, United Automobile Insurance Company, applied Fla. Stat. §627.736(5)(a)(2)(f)(2008), and reduced the Plaintiff’s charges in accordance with the Medicare fee schedule formula. According to the Plaintiff, United failed to pay 80% of all medically necessary expenses as promised in its policy of insurance, but rather based payment on the permissive limitations contained in Fla. Stat. §627.736(5)(a)(2)(f)(2008).
4. The parties served competing Motions for Final Summary Judgment, both claiming the remaining issue in this case is a question of law. As explained below, the court finds the Plaintiff’s Motion well taken, and as a result Defendant’s Motion must be denied.
5. The crux of this dispute is whether the insurer is required to specifically incorporate into the policy, its right to limit reimbursement to the No Fault Statute’s permissive Medicare-based fee schedule, when the language of the policy specifically refers to a different method to determine the amount it will pay.
6. Aside from this legal issue of statutory construction, there are no other statutory or contractual defenses to payment.
7. At the time the policy was issued in 2008 the revived No-Fault Act (2008) was in effect and provided two methods of reimbursement as follows:
627.736 Required personal injury protection benefits; exclusions; priority; claims. —
(1) REQUIRED BENEFITS. — Every insurance policy complying with the security requirements of s. 627.733 shall provide personal injury protection . . . . . as follows:
(a) Medical benefits. — Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices, and medically necessary ambulance, hospital, and nursing services. . .
§627.736(5)(a)(1) defines reasonable charges:
5) CHARGES FOR TREATMENT OF INJURED PERSONS. —
(a)1. Any physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section . . . . . In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like services or supplies. 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 applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply. (Emphasis added).
§627.736 (5)(a)2. a-f provides an alternative method of reimbursement.
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 the participating physicians schedule of Medicare Part B. However, if such services, supplies, or care is not reimbursable under Medicare Part B, the insurer may limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 and rules adopted thereunder which are in effect at the time such services, supplies, or care is provided. Services, supplies, or care that is not reimbursable under Medicare or workers’ compensation is not required to be reimbursed by the insurer.
8. Thus the new PIP statute provides both a mandatory and permissive method of reimbursement. Giving effect to both provisions means that an insurer is required to pay 80% of all reasonable expenses, but has the option to limit its reimbursement obligation and pay a fixed fee for individual services. Because the new PIP statute in effect since January 1, 2008 now contains mandatory and permissive language regarding the amounts that insurance will pay for medical claims, it is important for the PIP insurance company to clearly and unambiguously choose and identify its selected payment methodology in the PIP insurance policy itself.
9. The policy language in this case provides in pertinent part as follows:
SECTION IPERSONAL INJURY PROTECTION
The Company will pay, in accordance with the Florida Motor Vehicle No-Fault Law, to or for the benefit of the injured person:
(a) medical benefits — eighty percent of all medically necessary expenses defined as a medical service or supply that a prudent physician would provide for the purpose of preventing, diagnosing or treating an illness injury disease or symptom that is:
(a) In accordance with generally accepted standards of medical practice;
(b) Clinically appropriate in terms of type, frequency, extend, site and duration; and
(c) not primarily for the convenience of the patient, physician or health care provider.
incurred as a result of bodily injury caused by an accident arising out of the ownership, maintenance or use of a motor vehicle and sustained by:
(a) the named insured or any resident relative while occupying a motor vehicle or while a pedestrian through being struck by a motor vehicle
10. Thus, according to the above quoted language in the insurer’s own “personal injury protection” provision of its insurance policy, the insurer has expressly agreed to reimburse PIP claims at 80% of all medically necessary expenses which is consistent wiih the methodology described in Fla. Stat. §627.736(1)(a) and Fla. Stat. §627.736(5)(a)(1), but not the permissive methodology described in Fla. Stat. §627.736(5)(a)(2)(a-f)(2008). Nowhere in the policy does the insurer refer to the limitations contained in the new PIP law notwithstanding the fact that the policy was issued almost a year after the 2008 No Fault Law was passed by the legislature. Defendant argues that the statute is nevertheless incorporated into the policy, and, therefore Defendant has the unilateral right to alter the payment methodology, when it chooses, as provided in the statute — despite its express promise to reimburse all [without restriction or limitation] medically necessary expenses.
11. In this court’s view, Defendant’s argument ignores controlling case law in Florida. Most recently, the Fifth District Court of Appeal considered an analogous case involving a claim under a homeowners policy. State Farm Florida Ins. Co. v. Nichols, 21 So.3d 904 (Fla. 5th DCA, 2009) [34 Fla. L. Weekly D2275b]. In Nichols, the insurer argued that it was entitled to pay in accordance with the limitation language in a statute that was not specifically mentioned in the policy, while at the same time the policy provided a means to determine payments. The appellate court, however, considered the “may limit” language appearing in the sink hole insurance statute to be permissive. Similarly, the language “may limit” appears in the new No-Fault statute. As in Nichols, the insurance policy in this case expressly states that the insurance company will pay for claims pursuant to a particular methodology (80% of incurred medically necessary expenses). The “reasonable amount” methodology corresponds to the mandatory language contained in §627.736(1)(a) of the new PIP statute. Because the new PIP statute also states that a PIP insurer may apply the new fee schedule listed in Fla. Stat. §627.736(5)(a)(2)(2008), this provision is permissive, not mandatory, and the policy language that requires payment in accordance with the reasonable amount methodology specified in Fla. Stat. §627.736(1)(a) is “not in conflict with the [permissive methodology set forth in the new] statute and is therefore binding on parties to the insurance contract.” Nichols @ 905.
12. If the Defendant wanted to take advantage of the permissive fee schedule, it should have clearly and unambiguously selected that payment methodology in its insurance policy so that the insured patient and health care providers would be aware of it. MRI Associates of St. Pete vs. Safeco 17 Fla. L. Weekly Supp. 686a (Hillsborough County Court Case No. 09-12673, May 20th, 2010) Maryland Casualty Company v. Murphy, 342 So.2d 1051 (Fla.3d DCA, 1977) (In order to rely on statutory provisions allowing an insurance company to prohibit assignment of benefits, insurance company was required to include a provision to that effect in its insurance policy). In both Nichols and the instant case, the insurer failed to incorporate the permissive language that was contained in the statute in the policy. As in Nichols, the language contained in this contract for insurance sold by United automobile insurance company is not in conflict with the statute and is therefore binding on the parties to the insurance contract.
13. Defendant further contends that both Fla. Stat. §627.7407 (2008) as well as the policy language “we will pay in accordance with Florida Motor Vehicle No Fault Law as amended” operates to restrict the express promise of all [reasonable] medically necessary expenses. This court disagrees. Neither Fla. Stat. §627.7407 nor the policy’s reference to the Florida Motor Vehicle No Fault Law alters the express promise of the contract. §627.7407(7), Fla. Stat. (2008) specifically incorporates the statute, into then existing policies, “to add personal injury protection coverage as required by this section. The legislative purpose, clearly expressed, is to add “required” coverages. Incorporating a statute into a policy is designed to ensure that the policy meets the statutory minimums for coverage but never to preclude an insurance company from offering greater coverage than that required by statute. See Wright v. Auto-Owners Insurance Co., 739 So.2d 180 (Fla. 2d DCA, 1999) [24 Fla. L. Weekly D2033a] (Policy provision requiring payment in accordance with the PIP statute should not be construed to limit coverage to the minimum amount authorized by the PIP statute). These cases are consistent with the result reached in Nichols, because they confirm that when the insurance policy provides greater coverage than the minimum amount required by statute, the terms of the policy will control As a result, this court concludes, consistent with Nichols, that Defendant is obligated to pay what was promised in the contract, “all medically necessary expenses,” regardless of the limitation contained in the statute.
14. United alternatively contends that the reasonable amount considerations contained in Fla. Stat. §627.736(5)(a)(1) is now capped by the permissive fee schedule in Fla. Stat. §627.736(5)(a)(2). This Court disagrees as the exact language instructing how a reasonable amount is to be determined from the previous statute is still present in the new statute. Moreover the previous version of Fla. Stat. §627.736(5) contained a mandatory fee schedule capping the amount that providers were permitted to charge for certain diagnostic testing. If the legislature intended to create a mandatory cap, it certainly knew how to do so. Thus, if the legislature retained none of the mandatory fee schedule language from the previous version of the statute it is clear that they did not intend a mandatory fee cap when they enacted the “may limit reimbursement” provision in §627.736 (5)(a)2. Adopting the Defendant’s argument would essentially render Fla. Stat. §627.736 (5)(a)(1) meaningless — in violation of well settled principles of statutory construction See, Murray v. Mariner Health, 994 So.2d 1051, 1061 (Fla. 2008) [33 Fla. L. Weekly S845a]. (Court declined to adopt interpretation of fixed attorney fee formula in one subsection of the worker’s compensation statute that would render meaningless a reasonable amount fee provision in another subsection of that same statute).
Accordingly, it is hereby ORDERED AND ADJUDGED, Final Summary Judgment is entered in favor of the Plaintiff and a Judgment shall be entered in plaintiff’s favor in accordance with the terms of the September 28th Order granting Plaintiff’s Motion for Summary Judgment regarding benefits due.
This Court reserves jurisdiction to award attorney’s fees and costs in favor of the Plaintiff, and to enter a Final Judgment for Attorney’s Fees and Costs accordingly.
This Court is keenly aware of the volume of litigation this issue has generated as well as opinions from other judges contrary to this ruling. Because of the great number of these cases pending in the County Courts of this State; the continuing conflict on the County Court level; the probability that parties will continue to obtain conflicting rulings based on the “ “luck of the draw” ” of which County Judge they are assigned at the trial level and which Circuit Judge they are assigned on appeal; and the fact that this issue comes up weekly in each County Court civil division of this Circuit, this Court certifies to the Fourth District Court of Appeal the following question as affecting the uniform administration of justice:
DOES FLA. STAT. §627.736(5)(a)2 through 5 (2008) LIMIT THE INSURED OR HIS ASSIGNEE FROM CLAIMING THE REASONABLE AMOUNT OF SERVICES IN EXCESS OF THAT SUBSECTION’S SCHEDULE WHERE THE POLICY OF INSURANCE EXPRESSES NO SUCH LIMITATION BUT INSTEAD, EXPRESSLY PROMISES REIMBURSEMENT OF ALL MEDICALLY NECESSARY EXPENSES.
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