24 Fla. L. Weekly Supp. 970a
Online Reference: FLWSUPP 2411HALLInsurance — Personal injury protection — Coverage — Medical expenses — Approval of PIP policy by Office of Insurance Regulation does not constitute explicit approval of policy as properly electing to limit reimbursement to permissive statutory fee schedule — PIP policy providing that insurer will pay 80% of reasonable expenses, but also providing that in no event will insurer pay more than 80% of No-Fault Act schedule of maximum charges, provides clear and unambiguous notice of intent to limit reimbursement to permissive statutory fee schedule
ARGYLE CHIROPRACTIC CENTER, as assignee for Kristie Hall, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2015-SC-4411, Division CC-I. May 5, 2016. Pauline Drake, Judge.
AMENDED ORDER GRANTING DEFENDANT’SMOTION FOR SUMMARY JUDGMENT
This cause came before the Court on Defendant’s Motion for Summary Judgment. The Court having reviewed the documents, evidence and arguments of counsel, finds as follows:
In this suit seeking Personal Injury Protection (“PIP”) benefits, the Court is called upon to determine whether State Farm Mutual Automobile Insurance Company (“State Farm”) made a clear and unambiguous election to limit payments for medical services based on various Medicare fee schedules in its insurance policy and several amendments to that policy.
The standard for summary judgment is well known and need not be set forth at length. Moreover, the issue before the Court is not factual but deals with the legal interpretation of a contract. Because State Farm drafted the contract at issue, any ambiguities would be held against it. This is consistent with the well-known standard in summary judgment that issues be viewed in the light most favorable to the non-moving party.
FLORIDA’S PIP FRAMEWORK
Section 627.736, Florida Statutes (the “PIP Statute”) describes two separate and distinct payment calculation methodology options. The first is contained in Section 627.736(5)(a)1 and requires PIP insurers to pay for medical services rendered to the insured based on a fact-intensive analysis of the “reasonable” amount of the charges. This is the default methodology and normally results in higher reimbursements. See Allstate Fire & Casualty Ins. Co. v. Stand-Up MRI of Tallahassee, P.A., __ So. 3d __, 2015 WL 1223701 (Fla. 1st DCA Mar. 18, 2015) [40 Fla. L. Weekly D693b]. The second method is set forth in Section 627.736(5)(a) 2-5 and allows PIP insurers to pay for medical services based on various Medicare fee schedules and other terms. The second method is a permissive payment method.
PIP insurers must “clearly and unambiguously elect the permissive payment methodology in order to rely on it.” Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147, 158 (Fla. 2013) [38 Fla. L. Weekly S517a] (internal citations omitted). The Florida Supreme Court explained that this requirement is to give notice to the insured and the medical provider who renders service as to how much PIP coverage the insurer will provide. Id.
What constitutes a clear and unambiguous election has been molded by case law and statutory amendments. The Legislature amended Section (5)(a)5 of the PIP Statute to state:
Effective July 1, 2012, an insurer may limit payment [to the permissive 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.
Although the Virtual Imaging decision was rendered in 2013, it specifically limited its application to “policies that were in effect from the effective date of the 2008 amendments to the PIP statute . . . through the effective date of the 2012 amendment. . . .” Virtual Imaging, 141 So. 3d at 150.
In Stand-Up MRI, the First District analyzed a policy with certain similarities to the policy at issue in this case. In that case, the only language quoted from the policy at issue stated:
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.
Stand-Up MRI, 2015 WL 1223701 at *2. The First District held that “the policy gives sufficient notice of its election to limit reimbursements by use of the fee schedule.” Id.
RELEVANT CONTRACTUAL LANGUAGE
The policy at issue in this lawsuit contains the following relevant language.
Section II of the insurance policy, discussing Coverage P or No-Fault benefits:
Insuring Agreement
We will pay in accordance with the No-Fault Act properly billed and documented reasonable charges for bodily injury to an insured caused by an accident resulting from the ownership, maintenance, or use of a motor vehicle as follows:
1. Medical Expenses. We will pay 80% of properly billed and documented medical expenses, but only if that insured receives initial services and care from a provides described in A. below within days after the motor vehicle accident that caused bodily insured to that insured. . .
The Policy goes on to state:
We will limit payment of Medical Expenses described in the Insuring Agreement of this policy’s No-Fault Coverage to 80% of a properly billed and documented reasonable charge, but in no event will we pay more than 80% of the following No-Fault Act “schedule of maximum charges” including the use of Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers:
a. For emergency transport and treatment by providers licensed under chapter 401, Florida Statutes, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, Florida Statutes, 75 percent of the hospital’s usual and customary charges.
c. For emergency services and care as defined by s. 395.002, Florida Statutes, provided in a facility licensed under chapter 395, Florida Statutes, rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community.
d. For hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services.
e. For hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.
f. For all other medical services, supplies, and care, 200 percent of the allowable amount under:
(I) The participating physician fee schedule of Medicare Part B, except as provided in sub-sub-subparagraphs (II) and (III).
(II) Medicare Part B, in the case of services, supplies, and care provided by ambulatory surgical centers and clinical laboratories.
(III) The Durable Medical Equipment Prosthetics/Orthotics and Supplies Fee Schedule of Medicare Part B, in the case of durable medical equipment.
However, if such services, supplies, or care is not reimbursable under Medicare Part V, as provided in this sub-subparagraph, then we will limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13, Florida Statutes, and rules adopted thereunder which are in effect at the time such services, supplies, or care is provided. Services, supplies, or care that is not reimbursable under Medicare or workers’ compensation (Florida Rules of Procedure for Worker’s Compensation Adjudication) will not be reimbursed by us.
For purposes of the above, the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the year in which the services, supplies, or care is rendered and for the area in which such services, supplies, or care is rendered, and the applicable fee schedule or payment limitation applies throughout the remainder of that year, notwithstanding any subsequent change made to the fee schedule or payment limitation, except that it will not be less than the allowable amount under the applicable schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.
DISCUSSION
The Court starts by noting its appreciation for the excellent argument and preparation demonstrated by all counsel.
Defendant argues that the Office of Insurance Regulation’s (“OIR”) Informational Memorandum OIR-12-02M Issued May 4, 2012 constitutes a “policy form approved by the office” and thus satisfies the notice requirement established by Section 627.736(5)(a)5 as a matter of law. Plaintiff, on the other hand, argues that the form contained in the OIR memorandum contains many caveats that the language may be suitable to address the notice payee requirement of the statute.
The language contained in the OIR memorandum is substantially similar to the language in the 9810A policy.
Plaintiff argues State Farm’s policy incorporates the factors used in the default payment method established in Section 627.736(5)(a)1. The result, according to Plaintiff, is a failure to clearly and unambiguously elect the permissive payment method.
The Court cannot say, as a matter of law, at this time that the suggested language in the OIR Memorandum is “a policy form approved by the office. . . .” The OIR Memorandum contains multiple warnings that “[d]epending on the existing policy language, the sample language may be suitable to address the notice requirement” of Section 627.736(5)(a)5 and “[u]ltimately, it is the insurer’s responsibility to develop its own language after researching the law, reviewing its contract forms, and conferring with its own legal staff.” [See D.E. 32, Ex B (emphasis added)]. The OIR Memorandum is better viewed as a suggestion as opposed to the explicit approval satisfying the statutory requirement.
That conclusion, however, does not end the Court’s analysis. The next step is to determine whether State Farm’s policy — read as a whole — makes a clear and unambiguous election in light of the policy language approved in Stand-Up MRI of Tallahassee.
Section 627.736 contains several limitations on what constitutes a reasonable charge. Under the default payment method, consideration is given to (i) usual and customary charges and payments accepted by the provider involved in the dispute; (ii) reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and (iii) other information relevant to the reasonableness of the reimbursement for the service treatment or supply.
The permissive payment methodology limits payments based on the applicable Medicare fee schedule.
The 9810A policy, in pertinent part, states:
Insuring Agreement:
1. Medical Expenses. 90% of properly billed and documented medical expenses. . . .
. . . . .
Limits
We will limit payment of Medical Expenses described in the Insuring Agreement of this policy’s No-Fault Coverage to 80% of a properly billed and documented reasonable, but in no event will we pay more than 80% of the following No-Fault “schedule of maximum charges” including the use of Medicare coding policies. . . .
The Court fails to find how this is distinguishable from the approved language in Stand-Up MRI of Tallahassee which stated that the policy would pay 80% of reasonable expenses but “[a]ny amounts payable under the coverage shall be subject to any and all limitations authorized by section 627.736 . . . including but not limited to all fee schedules.” Stand-Up MRI, 2015 WL at 1223701 *2.
In both policies, the insurers specifically reserved all limitations in the PIP Statute — including the limitations in both the default and permissive payment methodologies. In Stand-Up MRI the insurer merely included the fee schedules as one of the limitations and the First District found this to be sufficient notice of electing the permissive payment methodology.
Here, State Farm stated that in no event would it pay more than the amounts allowed in the permissive payment methodology. Thus, State Farm’s policy appears to be a clearer election of the permissive payment option than the language approved in Stand-Up MRI of Tallahassee.
Accordingly, it is ORDERED and ADJUDGED:
Defendant’s Motion for Summary Judgment Regarding the 9810A policy language is hereby GRANTED.
The Court finds that, based on controlling First District case law, State Farm made a clear and unambiguous election to utilize the payment limitations set forth in Section 627.736(5)(a)2, Florida Statute.
