21 Fla. L. Weekly Supp. 97c
Online Reference: FLWSUPP 2101RICKInsurance — Personal injury protection — Coverage — Medical expenses — Deductible — PIP statute and policy require that deductible be subtracted from total billing amount before statutory percentage limitations are applied
WILLIAM J. GOGAN, M.D. (As Assignee of Tara Ricks), Plaintiff, vs. USAA GENERAL INDEMNITY COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 10-16026 COCE 55. August 9, 2013. Honorable Sharon Zeller, Judge. Counsel: Tara L. Kopp, LaBovick Law Group, Palm Beach Gardens, for Plaintiff. Reuven T. Herssein, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTIONFOR PARTIAL SUMMARY JUDGMENT ASTO THE PROPER APPLICATION OF THEDEDUCTIBLE TO BILLS RECEIVED
THIS CAUSE came before the court on July 22, 2013, for a case review of Plaintiff’s Motion for Partial Summary Judgment as to the Application of the Deductible and Defendant’s Motion for Summary Judgment and the Court having reviewed the Motions, the entire court file, and the relevant legal authorities; having heard argument of counsel; having made a thorough review of the matters filed on record; and having been sufficiently advised on the premises, the Court finds as follows:Undisputed Facts and Procedural History
This is a breach of contract action regarding personal injury protection (PIP) benefits. On January 18, 2010, Tara Ricks (hereinafter referred to as “the insured”) was involved in a motor vehicle accident, for which Defendant, USAA, provided PIP coverage. The policy of insurance at issue provided $10,000.00 in PIP benefits to the insured with a $1,000.00 deductible.
On February 15, 2010, the insured presented to Plaintiff, WILLIAM J. GOGAN, for treatment of injuries sustained in the subject accident. On the insured’s initial visit she executed an Assignment of Benefits wherein she assigned her rights and benefits under the policy of insurance to Plaintiff. Plaintiff submitted charges to the Defendant in the amount of $550.00, for CPT Code 99205 and was seeking reimbursement under the policy of insurance. Upon receipt of the Plaintiff’s bill the Defendant determined that $205.02 was the reimbursement amount owed and this amount was applied to the deductible therefore nothing else was due and owing.
On October 18, 2010, Plaintiff filed suit seeking the overdue PIP benefits. On December 23, 2010, Defendant filed its Answer and Affirmative Defenses alleging amongst other things that Defendant is not responsible for payment of this bill as amount owed, $206.12, was applied to the deductible.
On April 22, 2012, Plaintiff filed its Motion for Partial Summary Judgment as to the Issue of the Application of the Deductible (“Plaintiff’s MSJ”), which was initially heard by this Court on June 5, 2012. The two issues raised in Plaintiff’s motion were the following: (1) Whether when there are competing claims for PIP benefits, the insurer is required to apply the deductible to the bills in the order in which they are received: and (2) whether the deductible is to be subtracted from the amount billed before any applicable reductions and/or percentage limitations are applied.
For the purposes of this order, this Court is only ruling on the second issue which is the proper formula for the subtraction of the deductible. The controversy between the parties is whether the $1,000.00 deductible should be applied and subtracted from the total billing before the formula for payment pursuant to subsection 627.736(5)(a)2.b is applied or after the percentage reductions are applied. It is the Plaintiff’s position that pursuant to Fla. Stat. §627.736, §627.739 and Defendant’s policy of insurance, the deductible is required to be applied to 100% of the medical bill before the Defendant applies any percentage limitations to the outstanding bill. Defendant’s failure to apply the deductible to 100% of the medical bills received resulted in the Plaintiff not being properly compensated under the PIP statute. It is the Defendant’s position that the $1,000.00 deductible should be applied after the percentage reductions set forth in §627.736(5)(a)2.b.CONCLUSIONS OF LAWThe deductible is to be subtracted from the amountbilled before any applicable reductions and/orpercentage applications are applied
In arriving at its ruling this Court followed the analysis in the cases New Symrna Imaging, LLC (a/a/o Megan McClanahan) v. Garrison Property and Casualty Ins. Co., 20 Fla. L. Weekly Supp. 77a (18th Judicial Circuit, October 10, 2012); Flagler Hospital, Inc. (a/a/o Devin Sapp) v. Peak Property & Casualty Ins. Corp., 18 Fla. L. Weekly Supp. 597a (7th Judicial Circuit, April 7, 2011); and Flagler Hospital, Inc. (a/a/o Jody C. Rigdon) v. Progressive Select Ins. Co., 18 Fla. L. Weekly Supp. 620(c) (7th Judicial Circuit, April 14, 2011) as set forth in further detail below. I
In the case New Symrna Imaging, LLC (a/a/o Megan McClanahan) v. Garrison Property and Casualty Ins. Co., 20 Fla. L. Weekly Supp. 77a (l8th Judicial Circuit, October 10, 2012). The insured took out a contract of insurance with Garrison Property and Casualty Insurance Company. The contract included a $500.00 deductible for PIP benefits. On February 28, 2011 the Defendant. Garrison received a bill from the Plaintiff for services rendered to the assignor on February 15, 2011, totaling $1,650.00. Garrison reduced the bill from $1,066.28 (200% of the Medicare Part B Schedule) and then subtracted the $500.00 deductible from $1,066.28 leaving a balance of $566.28. The Defendant then multiplied the balance of $566.28 by 80% and issued a payment to Plaintiff in the amount of $453.02. The Plaintiff brought suit alleging a misapplication of the deductible stating that Florida Statute 627.736 and 627.739 requires the $500.00 deductible be applied to 100% of the medical bill before the Defendant applied any percentage limitations to the outstanding bill. The Defendant took the position that they correctly applied the deductible to the Plaintiff’s bill pursuant to the terms of the insurance contract and Florida Statutes 627.736 and 627.739(2). Both parties brought a motion for Final Summary Judgment on the issue alleging as a matter of law that their respective calculations are the legally proper formula to determine amounts due for medical services. Id.
The court granted Plaintiff’s Motion for Summary Judgment as it pertains to the application of the deductible and denied the Defendant’s Motion for Summary Judgment and found that the plain meaning of the statute is that the deductible must first be applied to the total bill and then the insurance company is entitled to adjust the payment accordingly. Id.
It is well settled that in attempting to discern legislative intent, the Court’s first look to the actual language in the statute. New Symrna Imaging, LLC (a/a/o Megan McClanahan) v. Garrison Property and Casualty Ins. Co., 20 Fla. L. Weekly Supp. 77a (18th Judicial Circuit, October 10, 2012) citing to Krause v. Textron Financial Corp., 59 So.2d 1085 (Fla. 2011) [36 Fla. L. Weekly S54a]; Saleeby v. Rock Elson Construction. Inc., 3 So.3d 1078 (Fla. 2009) [34 Fla. L. Weekly S106a]. Additionally when the statute is clear and unambiguous, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning. Id.
Florida Statute 627.739(2) states: The deductible must be applied to 100 percent of the expenses and losses described in 627.736.
Prior to the 2003 amendment of the above statute, the deductible was applied to “benefits otherwise due.” The Court in International Bankers Insurance Company v. Arnone, et al. 552 So.2d 908 (Fla. 1989) found that the statutory language “benefits otherwise due” required the 80% reduction under the policy before the deductible was applied.
The statute changed to delete the words “benefits otherwise due” and instead reads that the deductible should be applied to 100 percent of the expenses and losses as defined by 627.739. Section 627.736 no longer as the qualifying phrase “otherwise due”. New Symrna Imaging, LLC (a/a/o Megan McClanahan) v. Garrison Property and Casualty Ins. Co., 20 Fla. L. Weekly Supp. 77a (18th Judicial Circuit, October 10, 2012).
The very term “100 percent” means to encompass the entire body. It is illogical to think that the legislature intended to include the word “100%” just to redirect the parties to reduce it to 80% in the same sentence. The words “described in 627.736” modify the phrase “expenses and loses” and do not modify “100 percent”. The Court finds that the plain meaning of the statute is that the deductible must first be applied to the total bill and then the insurance company is entitled to adjust the payment accordingly. Furthermore, the parties’ contract states that the deductible shall he applied to the “total amount of medical benefits, work loss and replacement services expenses, before the application of any percentage (emphasis added) limitation incurred by or on behalf of each person to whom the deductible applies.” This language is in accord with the idea that the deductible must be applied before any, reduction whether contractual or statutory is applied. Id.
In Flagler Hospital, Inc. (a/a/o Devin Sapp) v. Peak Property & Casualty Ins. Corp., 18 Fla. L. Weekly Supp. 597a (7th Judicial Circuit, April 7, 2011), the Defendant applied the deductible to a bill for treatment rendered by the Plaintiff on January 30, 2010, after the reductions were made pursuant to 627.736(5)(a)2.b. and the Plaintiff alleged that the deductible should have been deducted from the entire amount before the percentage reductions were applied pursuant to 627.736(5)(a)2.b. The court held that the Plaintiff was correct in that the insured’s deductible should be applied to 100 percent of the amount billed. Id.
In arriving at its holding, the court in Flagler Hospital, Inc. (a/a/o Devin Sapp) v. Peak Property & Casualty Ins. Corp., 18 Fla. L. Weekly Supp. 597a (7th Judicial Circuit, April 7, 2011) referenced the Senate Staff Analysis, section 627.739 which was amended from its earlier version relating to PIP deductibles to change the calculation of the PIP deductible to require that it must be applied to 100% of medical expenses, rather than to the 80% of expenses that PIP pays. That analysis provided the following example:
This provision has the effect of requiring PIP to pay more in benefits than it does now if a deductible is elected. For example, under current law: $5,000.00 medical bill, PIP pays 80 percent, or $4,000.00, minus $2,000.00 deductible = $2,000.00. Under this provision: $5,000.00 medical bill, minus $2,000.00 deductible, is $3,000.00. PIP pays 80 percent x $3,000.00 = $2,400.00.
Furthermore, in West’s Florida Practice Series, 7 Fla. Prac., Motor Vehicle Law (PIP) sec 2:2 (2010-2011 Ed.), subsection (c) states in pertinent part:
“For policies written or renewed prior to October 1, 2003, the case of International Bankers Ins. Co. v. Arnone, 552 So.2d 908 (Fla. 1989), required that the deductible be subtracted from the benefits payable after the 80% payable figure was computed and not calculated off the top of the total bill. . .which is best explained by an example. . .involving. .a $2,000.00 deductible under the pre-October 2003 system:
Total Bill = $10,000 x 80% (standard PIP coverage) = $8,000 – $2,000 deductible = $6,000 payable from PIP.”
That section goes on to state “However using the same example to calculate the application of deductibles for policies written on or after October 1, 2003, the computations would be as follows:
Total Bill = $10.000.00 – $1,000.00 (maximum of PIP deductible) = $9,000.00 x 80% = $7,200.00 payable from PIP.”
In the case, Flagler Hospital. Inc. (a/a/o Jody C. Rigdon) v. Progressive Select Ins. Co., 18 Fla. L. Weekly Supp. 620(c) (7th Judicial Circuit, April 14, 2011) The issue raised by the Plaintiff is how the insured’s $1,000.00 deductible amount should be applied to the charges billed by the Plaintiff for medical services it rendered to the Defendant’s insured pursuant to his PIP benefits under sections 627.736 and 627.739, Florida Statutes. In this case, the Defendant received a bill from Plaintiff in the amount of $4,584.10 for services rendered on November 19, 2008 of which the Defendant paid $1,950.47. The Plaintiff alleged that the amount owed pursuant to its billing was $2,150.46.
The court found the proper formula for payment of PIP claims requires the deductible be subtracted from total billing amount before statutory reductions are applied. Therefore, the Defendant owed $2,150.46 based on the following application: Total Bill = $4,584.10 – $1,000.00 deductible = $3,584.10 x 75% = $2.688.07 x 80% = $2,150.46. Id.
This court agrees with the courts in New Symrna Imaging, LLC (a/a/o Megan McClanahan) v. Garrison Property and Casualty Ins. Co., 20 Fla. L. Weekly Supp. 77a (18th Judicial Circuit, October 10, 2012); Flagler Hospital, Inc. (a/a/o Devin Sapp) v. Peak Property & Casualty Ins. Corp., 18 Fla. L. Weekly Supp. 597a (7th Judicial Circuit, April 7, 2011), and Flagler Hospital, Inc. (a/a/o Jody C. Rigdon) v. Progressive Select Ins. Co., 18 Fla. L. Weekly Supp. 620(c) (7th Judicial Circuit, April 14, 2011) and finds that pursuant to Fla. Stat. §627.739, §627.736 and the policy of insurance, the Defendant is required to apply the deductible to the total bill before applying any percentage limitations.
In regards to amounts of the deductible applied to the bills received by Defendant as well as the order in which the deductible applied, this Court denies both Motions for Summary Judgment at this time and may consider at a later date only if Defendant properly files and the Court properly receives all of the documents requested pursuant to the Court Order dated February 13, 2013 and February 27, 2013, which are complete and that said documents and information are properly authenticated in that they are verified and sworn to as required by the Florida Rules of Civil Procedure and controlling case law.
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