21 Fla. L. Weekly Supp. 823a
Online Reference: FLWSUPP 2108MADIInsurance — Personal injury protection — Coverage — Medical expenses — Policy provision that makes vague references to amounts payable being “subject to any and all limitations authorized by [PIP statute]…including, but not limited to, all fee schedules” does not unambiguously elect to limit reimbursement to permissive statutory fee schedule — Florida Supreme Court’s opinion in Virtual Imaging does not compel finding that policy provision at issue unambiguously elects use of statutory fee schedule where sufficiency of policy language was never considered in Virtual Imaging opinion — Divergent judicial opinions from county and circuit courts as to whether policy provision at issue clearly elects to limit reimbursement to permissive statutory fee schedule demonstrates that policy provision is far from clear and unambiguous
QUANTUM IMAGING HOLDINGS, LLC A/A/O CHRISTINE MADIA, Plaintiff, v. ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE 13-12360 COCE 53. April 22, 2014. Honorable Robert W. Lee, Judge. Counsel: Emilio R. Stillo, for Plaintiff. Douglas E. Brehm, for Defendant.
FINAL JUDGMENT IN FAVOR OF PLAINTIFF
THIS CAUSE having come to be heard before the Court on non-jury trial on April 21, 2014. After reviewing the pleadings, the evidence, and argument of counsel, the Court makes the following findings:Facts
At issue in this case is the sufficiency of the Defendant’s (hereinafter referred to as “Allstate”) policy language. Allstate has stipulated that the Plaintiff’s charge of $1750.00 for both CPT Code 72141 and 70551 are reasonable in amount. Allstate chose to pay the submitted bills at the 200% Medicare cap.
The language of Allstate’s policy provides that Allstate will pay as follows, as pertains to personal injury protection (PIP) coverage:
“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.
The policy further states:
Any amounts payable under this coverage shall be subject to any and all limitation, 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.”
Allstate contends that this latter provision is a clear and unambiguous election rejecting reimbursement of 80% of reasonable charges and that the only limitation authorized by section 627.736, as pertains to the bills in this case, is the 200% Medicare cap, and as a result, it is unambiguously electing to use the Medicare cap methodology as its payment method.
The Plaintiff contends that Allstate failed to clearly and unambiguously include this methodology in its policy, as required by Geico General Insurance Company v. Virtual Imaging Services, Inc. etc., 38 Fla. L. Weekly S517a (Fla. 2013), and as a result, Allstate is obligated to pay 80% of the “reasonable expenses.” Allstate agrees that if the Plaintiff’s interpretation is correct, it would owe Plaintiff an additional sum towards the medical bills submitted.Analysis
The Supreme Court explained in U.S. Fire Insurance Company v. J.S.U.B. Inc, 979 So.2d 871, 877 (Fla. 2007) [32 Fla. L. Weekly S811a] that:
“Insurance contracts are construed according to their plain meaning, with any ambiguities construed against the insurer and in favor of coverage. Further, ‘in construing insurance policies, courts should reach each policy as a whole, endeavoring to give every provision its full meaning and operative effect.”
[Citations omitted]
And in Travelers Indemnity Co. v. PCR Inc., 889 So.2d 779 (Fla. 2004) [29 Fla. L. Weekly S774a], the Supreme Court explained:
“Policy language is considered to be ambiguous. . . if the language ‘is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage.’ When language in an insurance policy is ambiguous, a court will resolve the ambiguity in favor of the insured by adopting the reasonable interpretation of the policy’s language that provides coverage, as opposed to the reasonable interpretation that would limit coverage.”
[Citations omitted]
Finally, in Virtual, the Supreme Court required that the choice of the methodology be done in a manner so that the insured patient and health care providers would be aware of it. Id.
Applying the Supreme Court’s principles of construction, this Court concludes that Allstate’s language is ambiguous in attempting to limit reimbursement to Medicare cap methodology for numerous reasons.
Allstate’s choice of confusing language placed in a separate section a page later than the “eighty percent of reasonable expenses” language results in a finding that Allstate did not make its election in a manner so that the insured patient and health care providers would be aware of it, even if Allstate’s “subject to” language could be interpreted to incorporate the Medicare fee cap. Further, the Florida Supreme Court in Virtual recognized that there are two methodologies for satisfying the statutory mandate to pay reasonable expenses. One is a fact dependent analysis under 5a1 and the other is by clearly and unambiguously electing the fee schedules under 5a2 in the policy. The policy provision at issue in this matter incorporates both. As the Supreme Court noted in Virtual, “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.”
Allstate’s policy contains several ambiguities. First, the term “subject to” is ambiguous as it has many possible interpretations. Its customary use is to indicate a condition to one party’s duty of performance and not a promise by the other. The amounts payable are already “subject to” all portions of the Florida Motor Vehicle No-Fault Law.
By use of the phrase “subject to,” Allstate 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] (the words “subject to” in a contract are distinct from “incorporating” provisions of another document). Allstate has said nothing more than what is already true — all PIP policies are “subject to” these provisions; however, Allstate must clearly and unambiguously take the next step to incorporate these optional provisions into the policy if it desires to use the alternative methodology provided. See also Geico General Insurance Company v. Virtual Imaging Services, Inc. etc., 38 Fla. L. Weekly S517a (Fla. 2013); The Imaging Center of West Palm Beach, LLC (a/a/o Susan Angello) v. Allstate Property & Casualty Insurance Company, 21 Fla. L. Weekly Supp. 96a (17th Circuit, County Court; Judge Robert W. Lee).
Even if the term “subject to” were deemed to be limiting in nature the provision makes amounts payable subject to any and all limitations authorized by 627.736. There are several limitations authorized by this statute. In addition to the permissive schedule of maximum charges under FS 627.736(5)(a)(2)(a)-(f), a medical provider is limited to charging the insurer and injured party only a reasonable amount for his services and the amount charged is limited to no more than the amount the provider customarily charges for like services under FS 627.736(5)(a)(1). Moreover, the provision is written in the alternative. Therefore the policy can be interpreted as subjecting amounts payable to either any and all limitations “or” any other provisions of the Florida Motor Vehicle No-Fault Law. . . including, but not limited to all fee schedules. Not only does this language fail to clearly and unambiguously elect the fee schedules under 627.736(5)(a)(2) it subjects amounts payable to all provisions of the statute including 627.736(5)(a)(1).
Allstate has done nothing other than give itself the option to reimburse benefits under either the 5a1 or 5a2 methodology and has not clearly and unambiguously elected to limit reimbursement in accordance with FS 627.736(5)(a)2. The Court also notes that the policy retains a provision giving Allstate the right to contest whether charges are reasonable. If it was Allstate’s intent to elect to limit reimbursements in accordance with 5a2 there would be no reason to ever have to contest the reasonableness of the charge.
Additionally, earlier in its policy under the Limits of Liability for Automobile Medical Payments Allstate uses the following language in an effort to elect the fee schedules:
“ANY AMOUNTS PAYABLE UNDER THIS COVERAGE SHALL BE SUBJECT TO THE FEE SCHEDULE REIMBURSEMENT LIMITATIONS SET FORTH IN THE FLORIDA MOTOR VEHICLE NO-FAULT LAW, AS ENACTED, AMENDED OR OTHERWISE CONTINUED IN THE LAW”
While the Court believes the use of the term “subject to” is ambiguous, the remaining portion of the provision subjects amounts payable to only the fee schedule reimbursement limitations set forth in the Florida Motor Vehicle No-Fault Law. The specific reference to fee schedule reimbursement limitations as opposed to any and all limitations together with the elimination of the alternative “or any other provisions of the Florida Motor Vehicle No-Fault Law” do not create the myriad of possible interpretations applicable to the PIP provision at issue. Had Allstate used this language in the PIP provision of the policy the question of ambiguity would be much closer.
Similarly, the Plaintiff has moved into evidence a 2013 Allstate policy which contains the following language:
“The methodology for determining the amount we will pay for such expenses shall, pursuant to the fee schedule limitations under Section 627.736 (5)(a)1. of the Florida Statutes, or any other limitations established by Section 627.736 of the Florida Statutes, or of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, be limited to eighty percent of the following schedule of maximum charges (or any other fee schedule limitation which may be enacted, amended or otherwise continued in the law):
a. for emergency transport and treatment by providers licensed under Chapter 401 of the Florida Statutes, 200 percent of Medicare;
b. for emergency services and care provided by a hospital licensed under Chapter 395 of the Florida Statutes, 75 percent of the hospital’s usual and customary charges;
c. for emergency services and care as defined by Section 395.002 of the Florida Statutes, provided in a facility licensed under Chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community;
d. for hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services;
e. for hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services; and
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, except as provided in subparagraphs (ii) and (iii) below
(ii) Medicare Part B, the case of services, supplies and care provided by ambulatory surgical centers and clinical laboratories.
(iii) the Durable Medical Equipment Prosthetics/Orthotics and Supplies fee schedule of Medicare Part B, the case of durable medical equipment.”
Had Allstate used the 2013 language in the PIP provision of the policy at issue the Plaintiff contends the question of ambiguity would likely have been resolved in Allstate’s favor.
The Court rejects Allstate’s position that the Florida Supreme Court’s ruling in Virtual approved the text in GEICO’s amendment to its standard policy made while the case was being presented in the Supreme Court. The case on review in the Supreme Court involved only GEICO’s 2008 version of its PIP policy. At some point during the proceedings in the Supreme Court, respondent had moved to dismiss the case, arguing that GEICO had since changed the same provision significantly in its standard form PIP policy mooting the issue.
The Supreme Court obviously refused to dismiss the case because it proceeded to decide it on the merits. But what the Supreme Court actually said about Geico’s new policy text was this:
“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, see § 627.736(5)(a) 5., Fla. Stat. (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.”
In short, contrary to approving the new text put forth by GEICO, the Court made clear that its holding applied only to the policies in effect from 2008 to 2012. The Court was careful to express no decision as to the new policy text, because the issue before the Court involved only the policies in effect in the cases already adjudicated in the lower courts. The Supreme Court’s real, distinct and clear holding in Virtualis that the contested PIP med-pay policies in effect from 2008 to 2012 failed to state a clear election to limit medical benefits to the Medicare fee schedules. The Allstate policy language before the Court involves an Allstate policy in effect between 2008 and 2012 for the Florida Supreme Court has expressly made Virtual directly controlling. Further, the Court notes that on April 10, 2014 the Broward Circuit Court struck Allstate’s Appendix from the record as it relates to the amended GEICO policy in a pending appeal from this division in the case of Allstate Fire and Casualty Insurance Company v. Chironex Enterprises, Inc, Case No.CACE13-010002, L.T.CASE NO.:COCE11-005112 [21 Fla. L. Weekly Supp. 641b].
Finally, the Court notes that to date there have been over 70 orders entered on this issue by various courts around the state. The percentage of courts that have found the provision ambiguous as opposed to clearly and unambiguous electing to limit reimbursements in accordance with the fee schedules under 627.736(5)(a)2 is approximately 50-50. Although this does not create any presumptions regarding the outcome of this dispute it is certainly persuasive that if trained legal minds are unable to agree as to whether the provision is clear and unambiguous, the average insured could never clearly understand what his or her benefits are. In Security Ins. Co. Of Hartford v. Investors Diversified Ltd., Inc., 407 So.2d 314 (Fla. 4th DCA 1981), the court stated:
“The insurance company contends that the language is not ambiguous, but we cannot agree and offer as proof of that pudding the fact that the Supreme Court of California and the Fifth Circuit in New Orleans have arrived at opposite conclusions from a study of the essentially the same language.”
Security Insurance, supra at 316 (Emphasis in original).
The “proof of the pudding” in the instant case is that Quantum Imaging has demonstrated multiple orders and circuit court appellate opinions have reached diverse conclusions with regard to Allstate’s policy language. In and of itself, that diversity demonstrates that Allstate’s policy is far from clear and unambiguous in its purported attempt to “elect” the reimbursement limitations set forth in §627.736(5)(a)2. Similarly, in Stroehmann v. Mutual Life Ins. Co. of New York, 300 U.S. 435, 57 S. Ct. 607, 81 L. Ed. 732 (1937), the Supreme Court found a life insurance policy ambiguous, stating in pertinent part:
“Examination of the words relied upon to show an exception to the incontestability clause of the policy discloses ample cause for doubt concerning their meaning. The arguments of counsel have emphasized the uncertainty. The District Court and the circuit Court of Appeals reached different conclusions, and elsewhere there is diversity of opinion. . . . Without difficulty respondent could have expressed in plain words the exception for which it now contends. It has failed, we think, so to do. And applying the settled rule, the insured is entitled to the benefit of the resulting doubt.”
Stroehman, supra at 441 (Emphasis added).
Based on these findings, this Court concludes that Allstate’s policy fails to satisfy the Virtualrequirements for a clear and unambiguous election of the Medicare cap methodology as its payment method. Accordingly, the policy at issue is construed against Allstate and Allstate is obligated to pay 80% of the “reasonable expenses.”
ORDERED AND ADJUDGED that the Plaintiff. QUANTUM IMAGING OLDINGS, LLC A/A/O CHRISTINE MADIA recover from the Defendant ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY the sum of $ 898.69, together with prejudgment interest in the amount of $ 38.59, for a total amount of $ 937.28 for all of which sums let execution issue.
The Plaintiff is entitled to recover the costs of this action and reasonable attorney’s fees under 627.428, Florida Statutes. This Court retains jurisdiction to determine the amounts of costs and attorney’s fees due Plaintiff.
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