24 Fla. L. Weekly Supp. 860a
Online Reference: FLWSUPP 2410LOUIInsurance — Personal injury protection — Coverage — Medical expenses — Where PIP policy provides that insurer will limit reimbursement to 80% of fee schedule and also states that insurer retains right to reduce charges on any submitted bill it deems unreasonable and by any amount it chooses, policy commingles language from both payment methodologies and fails to make clear and unambiguous election of reimbursement method — Fact that policy defines unreasonable charge as any charge that exceeds maximum charges in fee schedule does not create clear and unambiguous election
APPLE MEDICAL CENTER, LLC, a/a/o Rosnel Louis, Plaintiff, v. PROGRESSIVE SELECT INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 15-11537 SP 25 (3). December 1, 2016. Patricia Marino-Pedraza, Judge.
ORDER ON DEFENDANT’S MOTION FORSUMMARY JUDGMENT AND MOTIONTO STRIKE AFFIDAVIT OF MICHAEL LIMOND
THIS CAUSE came before the Court on the 21st day of October, 2016 to be heard on Defendant’s motion for summary judgment and after hearing testimony and reviewing the evidence and case law, the Court finds as follows:
1. On or about October 21, 2016, this Court heard extensive argument as to Defendant’s Motion for Final Summary Judgment and to Defendant’s motion to strike affidavit of Michael Limond.
2. The Defendant contends that the A-85 Endorsement properly incorporates the fee schedules stated in Fla. Stat. 627.736(5)(a) and puts all interested parties on actual notice of its intention to utilize the fee schedules and to pay accordingly. The Plaintiff asserts numerous arguments to the contrary.
3. As to Plaintiff’s argument asserting that the contract provided by Defendant contained the words 9610D FL, “version 2.0”, indicating the declarations page and insurance contract refer to different insurance contracts, this Court is not going to address this issue because the Court does not find it persuasive.
4. However, as to Plaintiff’s argument that the Defendant’s endorsement contains ambiguity, this Court agrees that the language is clearly ambiguous.
5. In Geico v. Virtual Imaging Services, 141 So. 3d 147 (2013) [38 Fla. L. Weekly S517a], the Florida Supreme Court held that an automobile insurance carrier can reimburse properly submitted bills on a PIP claim using one of two payment methodologies. The first is the “default methodology” that “is a fact-dependent methodology that takes into account the service provider’s usual and customary charges, community-specific reimbursement levels, and other relevant information.” Virtual. The second methodology, found in F.S. 627.736(5)(a)1 is not fact-dependent. It relies on a mere application of the “schedule of maximum charges” to the charge submitted for a particular service or supply.
6. If an insurer opts to use the fee schedules, the insurer “must first give notice to [the insured] within the policy.” [Allstate Fire and Casualty Ins. v.] Stand-Up MRI, 40 Fla. L. Weekly D693b. Even if the fee schedules are incorporated into the insured’s policy, the insured must provide notice to the insured and the provider that it intends to use the fee schedules to limit reimbursements. Virtual Imaging, 141 So. 3d at 159. “Insurance statutes require clarity and specificity in electing fee schedules with respect to PIP medical benefits and coverage.” Orthopedic Specialists v. Allstate Ins., Co., 40 Fla. L. Weekly D1918a (Fla. 4th DCA Aug. 19, 2015). The notice must be clear and unambiguous; an insurer cannot “straddle” both methods for determining reimbursement limits. St. Johns Med. Ctr. v. Direct General Ins. Co., 21 Fla. L. Weekly Supp. 925a (Duval Cty. Ct. Dec. 19, 2013). The Defendant cannot “have” the proverbial cake and “eat” it too.
7. When interpreting an insurance policy, a court must look at the plain and unambiguous language in the policy. Orthopedic Specialists, 40 Fla. L. Weekly D1918a.
In construing insurance contracts, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect. Courts should avoid simply concentrating on certain limited provisions to the exclusion of the totality of others. However, policy language is considered to be ambiguous if the language is susceptible to more than one reasonable interpretation, one providing coverage and the other limited coverage.
Washington Nat’l Ins. Corporation v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013) [38 Fla. L. Weekly S511a] (citations omitted). Courts must construe “ambiguous policy provisions in favor of the insured and against their drafter, the insurer.” Orthopedic Specialists, 40 Fla. L. Weekly D1918a.
8. The pertinent provisions of the Progressive policy state:
UNREASONABLE OR UNNECESSARY 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 incurred that exceed the maximum charges set forth in Section 627.736(5)(a)1a-f, of the Florida Motor Vehicle No-fault Law, as amended. Pursuant to Florida law, we will limit reimbursements to, and pay no more than, 80 percent of the following schedule of maximum charges [ ]
We will reduce any payment to a medical provider under this Part 11(A) by any amount we deem to be unreasonable medical benefits. . .
In 2008, the Florida Legislature amended F.S. 627.736(5) to create an alternative, “permissive” payment methodology to reimburse medical providers in PIP claims. Instead of employing the “fact-based” criteria in the “reasonableness” payment methodology (which reimbursed at 80% of a reasonable charge”), all the carrier needed to do was apply the charge to the applicable fee schedule and calculate pursuant to the statutory formula. Indeed, the entire point of the “permissive” payment methodology was to remove “reasonableness” from the issue of calculating reimbursements.
Utilizing the “permissive” payment of methodology, the carrier merely applies the Medicare fee schedule reductions irrespective of the “reasonableness” of a submitted charge. Conversely, when a PIP carrier utilizes the “reasonableness” payment methodology, the carrier retains the option of lowering an “unreasonable” charge pursuant to the “enumerated factors” in section 627.736(5)(a). When Progressive reserves its right to “deem” a charge “unreasonable”, it seeks to utilize the “reasonableness” methodology. Further, Progressive’s right to “contest” an unreasonable charge is obviated, not reserved, in a properly amended policy. Therefore, the Court finds that the first clause at issue, when read with the rest of the endorsement, fails to make a “clear and unambiguous” election of the methodology that Progressive will use to calculate reimbursements on a given claim.
A plain reading of the above language shows that Progressive retains its right to reduce charges on any submitted bill that it deems to be “unreasonable” and “by any amount” it chooses. Under a properly amended policy, the charge is not reduced because a carrier deems the charge to be unreasonable; the charge is reduced by operation of statute. The need for any fact-based analysis of whether the charge is “reasonable” is mooted because the carrier placed the insured on notice that reimbursements will be calculated solely pursuant to the “permissive” methodology. When Progressive states that it will reduce a charge “by any amount” that it deems a charge to be “unreasonable”, it is exercising its option under the “reasonableness” payment methodology. Therefore, Progressive’s endorsement commingles language from both payment methodologies and fails to make a “clear and unambiguous” election of the methodology it will use to calculate reimbursements on a given claim.
Progressive defends by arguing that, when read as a whole, the insured is on notice that any reductions will be to the “fee schedule” amounts. It references the section in the endorsement that, essentially, tracks F.S. 627.736(5)(a)1(1)(a-f) and limits reimbursements to “no more than 80% of the following schedule of maximum charges.” Therefore, Progressive argues that its insured was placed on proper notice. The Court rejects this argument. Although the language in the endorsement may notify the insured that payments will not exceed the “fee schedule” amount, the reduction of a charge because it is deemed “unreasonable” is, by definition, an exercise of the “reasonableness” methodology. Under the “permissive” payment methodology charges are reduced to “fee schedule” through operation of statute, F.S. 627.736(5)(a)1, without any analysis as to its “reasonableness”. Furthermore, while Progressive may limit its reimbursement to “fee schedule” as a ceiling; it fails to do so as a floor. In short, Progressive retains the option to reduce a charge “by any amount” (including an amount lower than the fee schedule amount) regardless of the charges set forth in F.S. 627.736(5)(a)(1)(a-f). Commingling of methodologies is inconsistent with a “clear and unambiguous” election per Virtual.
Progressive next argues that its insured is on proper notice because it defines an “unreasonable” charge as any charge that “exceeds the maximum charges set forth in Section 627.736(5)(a)1(a through f)”, which is the fee schedule criteria. This argument does nothing more than state the obvious, because if a submitted charge does not exceed the “fee schedule” amount, then there is no need to engage in this analysis in the first place. The issue is the clarity of the election, not the definition of an “unreasonable” charge. Therefore, merely defining “unreasonable” as anything greater than “fee schedule” does not, in and of itself, create a “clear and unambiguous” election per Virtual.
9. In this case, Progressive seeks to limit reimbursement pursuant to the Medicare fee schedule (“permissive”) and retain the option to lower any submitted charge that it deems to be “unreasonable” (“reasonableness”). When read as a whole, the Defendant’s policy violates Virtual by failing to make a clear and unambiguous election. Therefore, the Defendant’s Motion for Summary Judgment is DENIED.
10. Based upon the above finding, there is no need for the Court’s determination as to Plaintiff’s hearsay argument or appropriate amounts paid argument.
11. Since the moving party has failed to prove the absence of a genuine issue of material fact, this Court need not address Defendant’s Motion to Strike affidavit of Michael Limond.
