24 Fla. L. Weekly Supp. 533a
Online Reference: FLWSUPP 2407ALTEInsurance — Personal injury protection — Coverage — Medical expenses — Under 2012 amendments to PIP statute, insurer is only required to provide notice that it may limit reimbursement to permissive statutory fee schedule, not clear and unambiguous notice required by Virtual Imaging in respect to 2008 amendments to PIP statute — PIP policy that provides that insurer will not pay charges deemed to be unreasonable, will determine to be unreasonable any charges in excess of maximum charges set forth in No-Fault Act, and will limit reimbursement to no more than 80% of 200% of Medicare Part fee schedule gave sufficient notice of intent to utilize permissive statutory fee schedule
ALTERMAN & JOHNSON FAMILY CHIROPRACTORS, P.A. as assignee for Amelia Brangenberg, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County, Case No. 2016-SC-586, Division P. September 19, 2016. Eric C. Roberson, Judge.
ORDER ON CROSS-MOTIONS FORSUMMARY JUDGMENT
In this lawsuit regarding personal injury protection (“PIP”) benefits, the Court is called upon to determine whether the subject insurance contract provided sufficient notice to elect repayment under the Medicare fee schedule methodology. Both parties have filed Motions for Summary Judgment. The facts are not in dispute and the resolution of this issue is purely a matter of law.
The standard for summary judgment is well known and need not be repeated here. Both parties agree that this issue is dispositive of the case. Accordingly, the matter is ripe for a determination of whether either party is entitled to summary judgment.
Background and Procedural Posture
This is one of many cases hinging on a legal determination of whether the subject insurance policy made a sufficient election to pay for medical services based on various Medicare fee schedules. See Fla. Stat. § 627.736(5)(a) 2-5. Otherwise, payment determinations would revert to the “default” methodology utilizing a fact-intensive analysis of the “reasonable” amount of the charges. See Fla. Stat. § 627.736(5)(a)1.
The relevant language in this insurance policy states:
UNREASONABLE OR UNNECCESSARY MEDICAL BENEFITS
If an insured person incurs medical benefits that we deem to be unreasonable or unnecessary, we may refuse to pay for those medical benefits and contest them.
We will determine to be unreasonable any charges that exceed to maximum charges set forth in Section 627.736(5)(a)(1)(a through f) of the Florida Motor Vehicle No Fault Law, as amended. Pursuant to the Florida law, we will limit reimbursement to, and pay no more than, 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. . . .
Plaintiff argues that this language impermissibly intertwines the two statutory reimbursement methodologies contained in Section 627.736 of the Florida Statutes (the “PIP Statute”). On one hand, the Plaintiff argues, the policy claims that it will utilize the Medicare fee schedules but, on the other hand, the policy will also engage in a reasonableness analysis that is the hallmark of the default methodology.
Defendant argues that the policy provides sufficient notice under the standards set forth in the PIP Statute and binding case law.
Legal Discussion
In prior orders, this Court has struggled with — but dutifully followed — the decision in Allstate Fire & Casualty Ins. Co. v. Stand-Up MRI of Tallahassee, P.A., 188 So. 3d 1 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D693b] (“Stand-Up MRI”). In Stand-Up MRI, the First District examined the following policy language:
In accordance with the Florida Motor Vehicle No-Fault Law, [Allstate] will pay to or on behalf of the injured person the following benefits. . .
1. Medical Expenses
Eighty percent of reasonable expenses for medically necessary . . . services . . .
Any amounts payable under this coverage shall be subject to any and all limitations, 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.
The Stand-Up MRI court found this language provided sufficient notice of electing the Medicare fee schedule methodology despite such broad statements as “any and all limitations, authorized by [the PIP Statute]” and the open-ended phrase “including but not limited to, all fee schedules.” See Stand-Up MRI, 188 So. 3d at 2.
The Stand-Up MRI decision seems at odds with Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a] (“Virtual Imaging”). In Virtual Imaging, the Supreme Court held that insurers must “clearly and unambiguously elect the permissive payment methodology in order to rely on it.” Virtual Imaging, 141 So. 3d at 158.
However, Virtual Imaging limited its application to the 2008 amendments to the PIP statute. Id. at 160. The 2008 version of the PIP Statute — later amended and discussed below — set the standard for electing the Medicare fee schedules as follows:
If an insurer limits payment as authorized by subparagraph 2. [setting forth the fee schedules], the person providing such services, supplies, or care may not bill or attempt to collect from the insured any amount in excess of such limits, except for amounts that are not covered by the insured’s personal injury protection coverage due to the coinsurance amount or maximum policy limits.
Virtual Imaging, 141 So. 3d at 159 (quoting Fla. Stat. 627.736(5)(a) (2008)) (emphasis in original).
Because the statute did not set a standard to determine “if” the insurer elected to limit reimbursement to the Medicare fee schedules, the Supreme Court held the proper standard to be a clear and unambiguous election of the fee schedule methodology. Virtual Imaging, 141 So. 3d at 158.
By the time Virtual Imaging was issued, however, “the Legislature [had] specifically incorporated a notice requirement into the PIP statute. . . .” Virtual Imaging, 141 So. 3d at 150. That notice provision states, in relevant part:
An insurer may limit payment [to the Medicare fee schedule method] only if the insurance policy includes a notice at the issuance or renewal that the insurer may limit payment pursuant to the schedule of charges specified in this paragraph. A policy form approved by the [Office of Insurance Regulation] satisfies this requirement.
Fla. Stat. §627.736(5)(a)5 (emphasis added).
Far from requiring a “clear and unambiguous” election of the Medicare fee schedule methodology, the Legislature utilized an extremely permissive and broad standard to only require an insurer give notice that it “may” utilize the fee schedules.
Here, the Legislature’s choice of the word ‘may’ at two points shows that it intended to give insurers broad leeway in choosing the Medicare fee schedule methodology. From day one, lawyers are barraged with examples highlighting the difference between the mandatory ‘shall’ and the permissive ‘may.’ See e.g. Blair Nurseries, Inc. v. Baker Cnty., 2016 WL 4751757, *5, 199 So. 3d 534 (Fla. 1st DCA Sep. 13, 2016) [41 Fla. L. Weekly D2121a] (“There is ample case law holding that the use of the term “may” ordinarily denotes discretionary or permissive authority.”) (Bilbrey, J., dissenting). In other contexts, courts have found the word ‘may’ to provide breadth and flexibility. See Dept. of Children and Families v. J.D., 2016 WL 4180212, *1 198 So. 3d 960 (Fla. 5th DCA Aug. 5, 2016) [41 Fla. L. Weekly D1822b] (“The use of the word ‘may’ rather than ‘shall’ in this section recognizes the courts must be free to exercise broad discretion when choosing the appropriate remedy. . . .”); Andrews v. State, 181 So. 3d 526, 528 (Fla. 5th DCA 2015) [40 Fla. L. Weekly D2456a] (“The emphasis on the word ‘may’ reflects Daubert’s description of the Rule 702 inquiry as a ‘flexible’ one.); Doe v. City of Palm Bay, 169 So. 3d 1211, 1219 (Fla. 5th DCA 2015) [40 Fla. L. Weekly D1671a] (Ordinance banning sexual offender from performing work in any “other place where children or vulnerable adults may reside or regularly congregate . . . is broad enough to apply to virtually every residence in the City, as well as a vast number of businessess. . . .”).
The definitions of the word ‘may’ in Black’s Law Dictionary demonstrate how open-ended the word can be, especially in the context of this specific statute. The first definition is “to be permitted to” while the second definition is “to be a possibility.” Black’s Law Dictionary (10th ed. 2014), available at Westlaw BLACKS. These two definitions coincide with the two uses of the word “may” in the statute.
Thus, all that is required under the current notice provision is that an insurer could possibly limit reimbursements to the Medicare fee schedule — not that the insurer will do so or can only utilize the fee schedules. With this standard in mind, the First District’s decision in Stand-Up MRI is easily understood. It is also virtually impossible to imagine any insurance policy that would not stand-up to a plaintiff’s challenge so long as there is even a passing reference to the Medicare fee schedules.
The Court finds that the 2012 amendment to the PIP Statute, not Virtual Imaging, provides the current standard to determine whether insurers have given notice of utilizing the Medicare fee schedule methodology. That amendment supersedes the Supreme Court’s standard in Virtual Imaging that an insurer must make a clear and unambiguous election.
Because the policy at issue in this case gave notice that the insurer could possibly utilize the Medicare fee schedule methodology, the Defendant is entitled to summary judgment.
ORDERED and ADJUDGED:
1. Defendant’s Motion for Summary Judgment is hereby GRANTED.
2. Plaintiff’s Motion for Summary Judgment is hereby DENIED.
