21 Fla. L. Weekly Supp. 89a
Online Reference: FLWSUPP 2101YOUNInsurance — Personal injury protection — Coverage — Medical expenses — Where policy cites to permissive statutory fee schedule but allows insurer at its own discretion to choose to reimburse insured according to fee schedule or reimburse reasonable expenses, policy is ambiguous as to reimbursement method for any given claim and does not specifically elect fee schedule method for reimbursement
UNIVERSITY COMMUNITY HOSPITAL (as assignee of Marjorie Young), Plaintiff, v. MERCURY INSURANCE COMPANY OF FLORIDA, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 13-CC-002044, Division K. September 16, 2013. Scott A. Farr, Judge. Counsel: Tara L. Kopp, LaBovick Law Group, Palm Beach Gardens, for Plaintiff. Suzette M. Alfonso, Dutton Law Group, P.A., Tampa, for Defendant.
ORDER DENYING DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT
This is a PIP case which came before the Court on Defendant’s Motion for Summary Judgment on September 12, 2013. Plaintiff is a provider of health care services and Defendant is an insurance company. The Court having reviewed the file, memoranda submitted by counsel and having heard argument of counsel, finds as follows:
1. There is no dispute as to any matters of material fact surrounding the automobile accident in question, the treatment of injuries or the amount and manner of payment. The issue is one of law, specifically, whether the claims reimbursement methodology set forth in Defendant’s contract of insurance complies with Section 627.736(5) Florida Statutes.
2. Defendant’s contract of insurance contains the following relevant provisions relating to the type of services for which it will pay and how that payment is determined:
b. For medically necessary services, supplies, treatment and care that do not exceed 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.
8. As authorized by the No-Fault Law, we may use various sources of information to decide if any medical expense is reasonable and necessary and caused by an accident. These sources include but are not limited to:
a. Exams by doctors we select at our expense, as often as we reasonably request;
b. Review of medical records and test results by persons and services selected by us;
c. computer programs and data bases for the analysis of medical treatment and expenses; and
d. Published sources of medical expense information.
7. “Medical Benefits” means eighty (80%) percent 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.
Medical Expenses is defined using the same language.
3. To convert this language into plain English, by referencing not only the fee schedules, but “other payment guidelines”, “any schedule and limitations under federal or state law” and “various sources of information”, Defendant’s policy allows it to reimburse a provider, on a claim by claim basis, either 80% of reasonable expenses as required by Section 627.736(1) Florida Statutes or to take advantage of the reimbursement limitations set forth in Section 627.736(5), (hereinafter the fee schedules) depending upon which calculation methodology results in the least payment from Defendant to the provider. The policy treats the fee schedules as a stop loss or upper limit payment on what is a reasonable amount of reimbursement to a health care provider.
Thus, under Defendant’s policy, Defendant may calculate a reasonable amount for medical services using the factors set forth in its policy and the statute and reimburse the provider 80% of that amount, or, if that amount is greater than the amount of reimbursement allowed by the fee schedules, Defendant may use the fee schedules. That Defendant agrees with this interpretation of its policy language is demonstrated by the following language from its memorandum in support of its motion:
“In clear and unambiguous language, the MERCURY policy specifically states it will only pay a reasonable amount for medical charges, subject to maximum charges as set forth in the applicable fee schedules and payment limitations, and other payment guidelines, in the No-Fault Law.” Defendant’s Memo at 9.
“Regardless of what factors are used in initially determining a “reasonable expense,” the policy states unequivocally that any such determination is subject to the fee schedule limitation provided for in the No-Fault Law. This can have only one meaning. In no instance will MERCURY pay more than that amount calculated from the fee schedules and payment limitations denominated in the No-Fault Law. The possibility remains that the “reasonable expense” could be less than the fee schedule amount.” Defendant’s Memo at 15.
4. For the reasons set forth below, the Court concludes Defendant’s reimbursement methodology is not allowed by the PIP statute.
5. Prior to January 1, 2008, Florida’s PIP statute required insurers to reimburse at 80 percent of the reasonable and necessary expenses for medical treatment. Section 627.736(1)(a) Florida Statutes. Section 627.736(5)(a) set forth the method by which a reasonable expense could be determined, including the usual and customary charges and payments accepted by a provider, reimbursement levels in the community and other factors. This naturally led to much litigation and protracted discovery with respect to the issue of whether a given charge was reasonable.
6. Effective January 1, 2008, the legislature amended the PIP statute to allow insurers a choice of two methods by which the determination of a reasonable amount could be made. The insurer could choose to continue using the method in the old statute or, pursuant to 627.736(5) it could reimburse at 80 percent of the fee schedule. The statute in effect deemed the amounts in the fee schedule to be reasonable. However, to take advantage of the fee schedule methodology, the insurer must unambiguously specify in its policy which methodology is to be used. Kingsway Amigo Insurance Co. v. Ocean Health, Inc., 63 So. 3d 63, (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; Geico General Insurance Co. v. Virtual Imaging Services Inc., SC 12-905, 2013 WL 3332385, July 3, 2013 [38 Fla. L. Weekly S517a].
7. The issue presented in both Kingsway and Virtual Imaging is slightly different than the issue presented in the case currently before the Court. In both of those cases the insurers had failed to specifically elect the fee schedule calculation method in their policies. Both courts determined this failure to specifically elect the fee schedule method of reimbursement required the insurers to reimburse pursuant to the methodology in 627.736(1), using the factors set forth in 627.736(5)(a).
8. In the case at bar, Defendant has specifically cited to the fee schedule reimbursement method in its policy. However, it has not chosen to use that calculation methodology alone. Rather, Defendant’s policy allows Defendant to choose to reimburse according to 627.736(1) or according to 627.736(5) at Defendant’s discretion. Language in both Kingsway and Virtual Imaging lead the Court to conclude this is not permissible.
9. In reaching its decision in Kingsway, the Fourth District Court of Appeal stated, in reference to 627.736(1) and (5), “(W)e agree with the trial court that these statutes are unambiguous and that their plain language allows an insurer to choose between two different payment calculation methodology options.” Kingsway, supra, at 65.
10. Similarly, the Florida Supreme Court in Virtual Imaging stated, “(A)ccordingly, we conclude that the 2008 amendments were clearly permissive and offered insurers a choice in dealing with their insureds as to whether to limit reimbursements based on the Medicare fee schedules or whether to continue to determine reasonableness of provider charges for necessary medical services rendered to a PIP insured based on the factors enumerated in section 627.636(5)(a) 1.” Virtual Imaging, supra, at 8.
11. It is clear from the above language that the Florida No-Fault Law presents insurers with an either or choice with respect to reimbursement calculation methodologies. An insurer must clearly and unambiguously choose only one such method. It may not alternate between the two methodologies at its whim as Defendant’s policy allows. Defendant’s policy is therefore ambiguous as to which method Defendant may use for any given claim and Defendant has failed specifically to elect the fee schedule calculation methodology. Wherefore it is,
ORDERED and ADJUDGED Defendant’s Motion for Summary Judgment is DENIED.
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