22 Fla. L. Weekly Supp. 185b
Online Reference: FLWSUPP 2202CROBInsurance — Personal injury protection — Coverage — Exhaustion of policy limits — Although at time insurer exhausted benefits and medical provider filed suit over claims paid pursuant to permissive statutory fee schedule Florida Supreme Court had not yet ruled on issue of whether insurer could calculate reimbursement utilizing fee schedule without electing to do so in policy, binding precedent from district courts of appeal already required that insurer elect statutory fee schedule before reducing payment — Accordingly, post-suit exhaustion of benefits may not shield insurer from liability — Remand to trial court to determine whether $6.00 payment that exhausted benefits was gratuitous payment, and if so, to enter judgment for provider
USAA CASUALTY INSURANCE COMPANY, Appellant, vs. DADE INJURY REHAB, INC., (a/a/o CARLENA ROBINSON), Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 12-342 AP. L.T. Case No. 11-009142 CCO5. September 15, 2014. An Appeal from a decision of the County Court for Miami-Dade County, Florida. Counsel: Douglas H. Stein, Seipp & Flick, LLP, for Appellant. Marlene S. Reiss, Law Offices of Marlene S. Reiss, Esq., P.A., for Appellee.
(Before COHEN, HANZMAN, and FIGAROLA, JJ)
(FIGAROLA, Judge.) The issue before the Court is whether the trial court erred in entering final judgment against USAA Casualty Insurance Company (“Appellant”) and in favor of Dade Injury Rehab, Inc (“Appellee”), where the benefits under the insurance policy had been exhausted.
Appellee filed a Complaint on June 28, 2011 alleging that Appellant failed to pay the amount due pursuant to the insurance policy. Appellant moved for summary judgment predicated on the fact that the benefits under the insured’s policy had been exhausted. The trial court denied Appellant’s motion for summary judgment and entered a final judgment in Appellee’s favor. The trial court’s entry of an order for summary judgment is subject to de novo review on appeal. Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D1605a].
The Appellee in this case is a provider of medical services and provided treatment from July 29, 2008 to May 4, 2009. The insured had a personal injury protection (“PIP”) insurance policy which provided that USAA would pay “80% of medical benefits”. Medical benefits were defined in the policy as “reasonable expenses for medically necessary . . . services.” Appellee submitted bills to Appellant which totaled $10,691.00. The amount or reasonableness of the medical bills was undisputed. Pursuant to a plain reading of the insurance policy, Appellee was to be paid $8,552.80 (80% of $10,691.00).
The Appellant paid the Appellee $3,077.21, not $8,552.80. The Appellant reduced the amount to be paid by applying the provisions of §627.736(5)(a)2.f., Fla. Stat. (2008) which provides that:
(a) A physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies rendered. . . .
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 fee schedule of Medicare Part B.
In GEICO General Insurance Company v. Virtual Imaging Service, Inc., 141 So. 3d 141, 150 (Fla. 2013) [38 Fla. L. Weekly S517a], the Supreme Court held that this statutory provision provides that the Medicare fee schedules are one possible method of calculating reimbursement.
The issue in this case is thus whether the Appellee properly elected to reduce the amount paid to the Appellee by applying the statutory provisions in spite of the plain language of the insurance policy. Moreover if the Appellant was not authorized to reduce the payment pursuant to the statute, whether the Appellant can now be required to pay PIP benefits when benefits under the policy have been exhausted.
The Supreme Court decided this issue contrary to the Appellant’s position in GEICO General Insurance Company v. Virtual Imaging Service, Inc., 141 So. 3d 141 (Fla. 2013) [38 Fla. L. Weekly S517a] in which the Court ruled that although the statute provided an alternative permissive method of payment, the insured was required to give notice to the insured “by electing the permissive Medicare fee schedules in its policy before taking advantage of the Medicare fee schedule methodology to limit reimbursements.” It is undisputed that the Appellant in this case never gave the requisite notice. The Appellant maintains that it was nevertheless free to interpret the statutory provision and make payments as it deemed appropriate because the law on this issue was unsettled as the Supreme Court had not rendered its decision in GEICO when it paid the Appellee.
Although the Supreme Court had not issued its ruing, it is undisputed that at the time the Appellant exhausted benefits and the Appellee filed suit, two district courts including the Third District Court of Appeal, had already held that an insurer could not reimburse in accordance with §627.736 (5) (a) 2.f, without first giving notice and electing to do so in the insurance policy. Kingsway Amigo Ins. Co v. Ocean Health (a/a/o Belizaire Gomez), 63 So. 3d 63, 67 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; GEICO Indem. Co. vs. Virtual Imaging Svcs., Inc., 79 So.3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]. It is well settled that the decision of any district court of appeal is binding on a county or circuit court. Pardo v. State, 596 So. 2d 665 (Fla. 1992). Thus there is no question that at the time the Appellant choose to reimburse pursuant to the provisions set forth in §627.736.(5)(a), the prevailing law as decided by the Third District Court of Appeal as well another district court required that an election be made.
Having found that the Appellant failed to properly elect the alternative payment methodology set forth in Section 627.736(5)(a)2.f before reducing the payment and that the Appellee may accordingly have been due the disputed amount, the Court must determine whether Appellant’s exhaustion of PIP benefits after commencement of the suit in this case shields the Appellant from liability.
Appellee argues that the Appellant made a gratuitous payment of six dollars to Orthopedic and Spine Center in order to exhaust benefits. This argument is premised on the deposition of the Appellant’s adjustor who testified that she made an additional payment of six dollars to Orthopedic and Spine Center because she “didn’t feel that it was originally paid correctly because it wasn’t coded correctly.” Six dollars was the amount of the remaining benefit. When the six dollar payment was made, Orthopedic and Spine Center had already agreed to accept a PPO rate of satisfaction of their bill and had been paid. Moreover the Appellee had already filed suit.
Appellee alleges that this “post suit exhaustion was done in bad faith and was a purposeful manipulation by the Defendant to avoid paying the valid claim of the Plaintiff and is considered a gratuitous payment under the law.” An insured may be required to pay in excess of the liability limit if it has made a “gratuitous payment”. Coral Imaging Svcs. v. GEICO Idem. Ins. Co., 955 So. 2d 11 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2478a]. A “gratuitous payment” is a payment that was not owed and is thus given gratuitously. Id. Appellant contends that reliance on Coral Imaging is misplaced as every medical provider, including Orthopedic and Spine Center that was paid by the Appellant after paying the Appellee was entitled to payment.
As the deposition testimony relied upon by the parties to establish this issue does not sufficiently address this issue, this Court reverses and remands this matter to the trial court for an evidentiary hearing on whether the payment of six dollars to Orthopedic and Spine Center was a gratuitous payment. If it is found that the payment was gratuitous judgment should be entered in the Appellee’s favor for the amount of six dollars and attorney’s fees should be awarded pursuant to Florida Statute §627.428(1). If the trial court finds that the six dollar payment was not gratuitous, the policy was properly exhausted and judgment should be entered in favor of the Appellant. (COHEN and HANZMAN, JJ, concur.)
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