23 Fla. L. Weekly Supp. 841a
Online Reference: FLWSUPP 2308BOUCInsurance — Personal injury protection — Deductible — PIP insurer that clearly and unambiguously elected to reimburse in accordance with permissive statutory fee schedule correctly applied Medicare Part B fee schedule to medical provider’s charges to determine reasonableness of charges and then applied 100% of those reduced amounts to deductible
ADVANTACARE OF FLORIDA, LLC A/A/O BOUCREE, BLANCA, Plaintiff, vs. GEICO INDEMNITY COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2015 30053 COCI. July 24, 2015. Honorable Angela A. Dempsey, Judge. Counsel: Kimberly P. Simoes, The Simoes Law Group, P.A., Deland, for Plaintiff. Kelly Wilson-Timmins, Law Office of Stephen F. Lanosa, Orlando, for Defendant.
REVERSED. FLWSUPP 2702BOUC
ORDER DENYING PLAINTIFF’S MOTIONFOR FINAL SUMMARY JUDGMENT
THIS CAUSE comes before the Court on the Plaintiff’s Motion for Summary Judgment, and this Court having heard argument, having been persuaded by Garrison Prop. and Cas. Ins. Co. v. New Smyrna Imaging LLC a/a/o McClanahan, Appeal No. 13-03-AP (Fla. 18th Jud. Cir. App., January 12, 2015) [23 Fla. L. Weekly Supp. 708a], and being otherwise advised in the premises, makes the following ruling:
I. Background
This case arises out of a claim by ADVANTACARE OF FLORIDA (“Plaintiff” or “ADVANTACARE”), alleging that GEICO INDEMNITY COMPANY (“Defendant” or “GEICO”) failed to pay personal injury protection (“PIP”) benefits under a policy issued to Blanca Boucree.
ADVANTACARE provided medical services to Ms. Boucree on April 11, 2014; April 14, 2014; April 15, 2014; and April 17, 2014, respectively, and filed the instant claim against GEICO as assignee of the policyholder in relation to those dates of service.
For each billing at issue, GEICO issued an Explanation of Review indicating that GEICO received ADVANTACARE’s billing, applied a “fee schedule reduction” pursuant to 200% of Medicare Part B Fee Schedule, and reduced ADVANTACARE’s total charges.
Regarding DOS 04/11/2014, ADVANTACARE billed a total amount of $338.87, and GEICO applied a “fee schedule reduction” to that amount, pursuant to 200% of Medicare Part B Fee Schedule, and reduced the total charges to $334.14.
Regarding DOS 04/14/2014-04/17/2014, ADVANTACARE billed a total amount of $939.52, and GEICO applied a “fee schedule reduction” to that amount, pursuant to 200% of Medicare Part B Fee Schedule, and reduced the total charges to $725.30.
The policy at issue has a $1,000 deductible applicable to Ms. Boucree as the named insured under the subject policy.
GEICO’ s policy states as follows concerning the deductible term:
After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described. The amount of any deductible stated in the declarations shall be deducted from all expenses or losses as described in FL Stat. §627.736 with respect to all medical expenses, replacement services expenses and work loss incurred by or on behalf of each person to whom the deductible applies and who sustains bodily injury as the result of any one accident. Such deductible will not apply to the death benefit.
GEICO applied the $1,000.00 deductible to the fee schedule reduction due, not the total billed amount.
II. The Summary Judgment Hearing
The Court heard oral arguments on ADVANTACARE’ s Motion for Final Summary Judgment on June 29, 2015.
At the hearing, the Plaintiff argued that §627.739(2) of the Florida Statutes clearly and unambiguously requires GEICO to apply 100 percent of the billed expenses to the deductible. ADVANTACARE contended that irrespective of GEICO’s position that its policy allowed it to utilize the permissive fee schedule set forth under §627.736(5)(a)2 of the Florida Statutes, those limitations on reimbursement do not allow an insurance carrier to reduce medical expenses to the fee schedule amount prior to satisfying the deductible. ADVANTACARE argued that a limitation on reimbursement is not parallel to the reasonable expenses which are described by §627.736 of the Florida Statutes.
GEICO argued that it had properly endorsed its policy and was authorized to utilize the permissive fee schedule set forth under §627.736(5)(a)2 of the Florida Statutes. For purposes of its Motion for Final Summary Judgment, the Plaintiff did not challenge GEICO’s right to utilize §627.736(5)(a)2.
GEICO also argued that it was authorized to reduce ADVANTACARE’s charges to the reasonable amount pursuant to the fee schedule before applying the $1,000.00 deductible.
III. Analysis
This case addresses the interplay of §§627.739(2) and 627.736 of the Florida Statutes and the proper order for application of the deductible and fee schedule when calculating payments to providers.
Section 627.739(2) mandates that “[i]nsurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in the amounts of $250, $500, and $1,000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736.” §627.739, Fla. Stat. (2003). Prior to 2003, the deductible was “to be deducted from the benefits otherwise due each person subject to the deduction.” §627.739, Fla. Stat. (1999).
The Preface to the Florida Statutes provides that “a cross-reference to a specific statute incorporates the language of the referenced statute as it existed at the time the reference was enacted.” Preface at viii, Fla. Stat. (2008). As an initial step under §627.739(2), the insurer must first determine what are the “expenses and losses described in s. 627.736,” in order to apply the deductible to 100 percent of those expenses and losses. Section 627.736 contains several references to expenses, almost all of which are described as or used in the context of reasonable expenses or expenses “covered by the policy.” §627.736(1)((a), (1)(b), (4), and (6)(b), Fla. Stat. Thus, when read together, §§627.739 and 627.736 require that a PIP deductible be applied to 100 percent of the reasonable medical expenses, or those expenses covered by the policy.
Section 627.736 provides two means for determining what is a reasonable medical expense. §627.736, Fla. Stat.; GEICO Gen. Ins. Co. v. Virtual Imaging Svcs., Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
The first means for determining what is a reasonable medical expense is set forth under subsection (5)(a), providing as follows in pertinent part:
In determining 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, reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.
Alternately, the second means provided under §627.736 for determining what is a reasonable medical expense is set forth under subsection (5)(a)1, wherein the Legislature provided that “[t]he insurer may limit reimbursement to 80 percent of [a defined] schedule of maximum charges.” In order to pay in accordance with this fee schedule limitation, the insurer must clearly and unambiguously select that payment methodology such that the insured and medical providers are aware of it. GEICO, 141 So.3d at 160.
In the instant case, GEICO clearly and unambiguously elected §627.736(5)(a)1 within the subject policy as the sole mechanism for determining the reasonableness of medical expenses by reference to the Medicare fee schedules. Such election rendered inapplicable the other methodology for determining what is a reasonable medical expense (i.e., as set forth under subsection (5)(a)). Based on this election, GEICO properly determined the reasonableness of ADVANTACARE’s claimed medical expenses in reference to the Medicare Part B Fee Schedule.
Once the reasonable amount of a medical expense is determined, a PIP deductible shall then be applied to 100 percent of those reasonable medical expenses. In the instant case, because GEICO determined the reasonableness of the claimed medical expenses in reference to the Medicare Part B Fee Schedule (as was permitted based upon GEICO’s proper election of §627.736(5)(a)1), the fee schedule amounts — as the reasonable amounts — were correctly applied toward the deductible pursuant to the PIP statute and GEICO’s own policy language.
ORDERED AND ADJUDGED:
1. The Plaintiff’s Motion for Final Summary Judgment is DENIED.
2. The Court shall enter Final Judgment in favor of the Defendant.
3. Each party shall bear their own attorney’s fees and costs.
