24 Fla. L. Weekly Supp. 694b

Online Reference: FLWSUPP 2409JOFFInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy that states that insurer will pay 80% of medical expenses subject to applicable fee schedule and defines “medical expenses” as properly billed and lawfully rendered reasonable charges limited to the medical expense limitations schedule set forth in section 627.736(5)(a) clearly and unambiguously elects to limit reimbursement to permissive statutory fee schedule

CENTRAL FLORIDA MEDICAL & CHIROPRACTIC CENTER, INC., d/b/a FLORIDA MRI CENTER, a/a/o NEL JOFFE, Plaintiff, vs. PERMANENT GENERAL ASSURANCE CORPORATION, Defendant. County Court, 9th Judicial Circuit in and for Orange County, Civil Division. Case No. 2015-SC-11374-O. September 19, 2016. Tina Carabello, Judge. Counsel: Michael LaPorte, Dan Newlin & Partners, Orlando, for Plaintiff. Dorothy V. DiFiore, Quintairos, Prieto, Wood & Boyer, P.A., Tampa, for Defendant.

FINAL JUDGMENT FOR DEFENDANT

THIS CAUSE, came before this Court on September 8, 2016, on the Parties’ Cross Motions for Summary Judgment as to whether Permanent General Assurance Corporation’s [hereinafter The General] policy of insurance presented an unambiguous election to utilize the fee schedules as the method of determining reasonableness of the medical bills. The Court, having reviewed the pleadings, the entire Court file, the relevant legal authorities and having heard argument of counsel, hereby finds:

Prior to the hearing, The General submitted a statement of undisputed facts in this matter. These facts established that there was no dispute as to any material factual matter that might otherwise be litigated in an action to recover benefits under the PIP provisions of an automobile insurance policy.

FACTS IN THIS CASE

The General issued a policy of automobile insurance to Nel Joffe with effective dates of September 1, 2014 through September 1, 2015. A certified copy of the policy was filed in this action and was available for the Court’s review. The policy provides $10,000 in PIP benefits, subject to a $1000 deductible. The General did not apply any of Plaintiff’s bills to the deductible and there is no dispute in this action in regard to the Defendant’s application of the deductible. Nel Joffe was struck as a pedestrian on January 27, 2015. Central Florida Med & Chiro Center, d/b/a Florida MRI [hereinafter Florida MRI] provided MRIs for Ms. Joffe’s accident related injuries. Ms. Joffe assigned her benefits under the policy to Florida MRI and Plaintiff’s standing in this action is not disputed. Florida MRI is not a hospital, ambulatory surgical center, clinical laboratory, provider of emergency services licensed under Chapter 395, or provider of emergency transport services, licensed under Chapter 401.

DEFENDANT’S POLICY LANGUAGE

The General’s policy of insurance that provides coverage in this matter contains the following relevant provisions, which can be found in an endorsement to the Policy:

SECTION 4 — PERSONAL INJURY PROTECTION BENEFITS

INSURING AGREEMENT: The entire Insuring Agreement Section is deleted and replaced with the following:

INSURING AGREEMENT: In accordance with the Florida Motor Vehicle No-Fault Law, “we” will pay for 80% of “medical expenses” subject to the applicable fee schedule, pursuant to Florida Statutes, to or on behalf of the “injured person” the following benefits subject to limits of liability. . . .

DEFINITIONS APPLICABLE TO THIS SECTION ONLY. The following definitions are replaced:

. . .

B. “Medical expenses” means properly billed and lawfully rendered reasonable charges, limited to the Medical Expense Limitations Schedule set forth in Section 627.736(5)(a), Florida Statutes, as amended, and subject to the Limits of Liability in this “PIP” (or any lower amount set forth in any other fee schedule or limitation which may be enacted, amended or otherwise set forth in Florida law), for “medically necessary” medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices and “medically necessary” ambulance, hospital and nursing services. “Medical expenses” do not include any charge for massage as defined in Section 480.033, Florida Statutes, or acupuncture, as defined in Section 457.102, Florida Statutes, regardless of the person, entity or licensee providing the massage or acupuncture.

. . .

N. “PIP” means Personal Injury Protection.”

BENEFITS. — The entire Benefits Section is deleted and replaced with the following:

In accordance with the Florida Motor Vehicle No-Fault Law, “we” will pay to or on behalf of the “injured person” the following benefits. Payments will be made only when “bodily injury” is caused by an accident arising from the ownership, maintenance or use of a “motor vehicle”.

A. “Medical Expenses” — Pursuant to the requirements of Section 627.736(1)(a) of the Florida Statutes: eighty percent of reasonable expenses for medical, surgical, X-ray, dental, and rehabilitative services including prosthetic devices, and ambulance, hospital and nursing services; which are “medically ” ‘ only if the “injured person” receives initial services and care within 14 days after the “motor vehicle” accident. The methodology for determining the amount “we” will pay for such expenses shall, pursuant to the fee schedule limitations under Section 627.736(5)(a)1., of the Florida Statutes, or any other limitations established by Section 627.736, of the Florida Statutes, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, be limited to eighty percent of the following schedule of maximum charges (or any other fee schedule limitation which may be enacted, amended or otherwise continued in the law):

. . . . .

6. for all other medical services, supplies and care 200 percent of the allowable amount under:

a. the participating physicians fee schedule of Medicare Part B, . . . .

If a provider submits a charge for an amount less than the amount determined by the fee schedule or other limitations established by Section 627.736 of the Florida Statutes or any provisions of the Florida Motor Vehicle No-Fault Law as described above, “we” will pay eighty percent of the charge that was submitted.

. . . .

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 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 may not be less than the allowable amount under the applicable foe schedule for Medicare Part B for 2007 for medical services, supplies and care subject to Medicare Part B.

. . . .

“We” will not pay for a part or all of a “medical expense”:

a. That is greater than the maximum reimbursement allowance set forth in the Medical Expense Limitations Schedule under “our” limit of liability;

b. . . . .

SUMMARY JUDGMENT STANDARD

Summary judgment should be granted where “the facts are so clear and undisputed that only questions of law remain.” Dade Cnty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 643 (Fla.1999) [24 Fla. L. Weekly S71a]. This case presents a question of insurance policy interpretation, which is a question of law. Penzer v. Transportation Ins. Co., 29 So. 3d 1000, 1005 (Fla. 2010) [35 Fla. L. Weekly S73a]; Harrington v. Citizen’s Property Ins. Corp., 54 So. 3d 999 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D2838a] (questions of insurance policy interpretation are questions of law). In addition, where the case turns on an interpretation of a statute, the issue presents a question of law for the Court. Geico Gen. Ins. Co. v. Virtual Imaging Svcs, Inc., 141 So. 3d 147, 151 (Fla. 2013) [38 Fla. L. Weekly S517a]; Fla. Wellness & Rehab v. Allstate Fire & Cas. Ins. Co., __ So. 3d __ , 41 Fla. L. Weekly D1619c (Fla. 3rd DCA, July 13, 2016).

In a case that questions whether the insurer’s PIP policy complies with the requirements of the PIP statute, the court is tasked with interpreting both the statute and the policy — both of which are pure questions of law and appropriate for a disposition by summary judgment. This case presents such a question and thus, this Court, like the courts in the cases discussed below, will analyze Defendant’s policy language and determine if Defendant has satisfied the requirement that Defendant provide notice to the policyholder (and thereby the policyholder’s assignees) that Defendant has elected to use the permissive fee schedule methodology to determine the reasonableness of the medical expenses submitted to Defendant for reimbursement, as required by the court in Virtual Imaging.

Under Florida law, when interpreting an insurance contract, the policy is interpreted pursuant to its “plain meaning.” Virtual Imaging, 141 So. 3d at 157; Fla. Wellness & Rehab v. Allstate Fire & Cas. Ins. Co., __ So. 3d __, 41 Fla. L. Weekly D1619c (Fla. 3rd DCA, July 13, 2016). If the policy’s language is “plain and unambiguous, a court must interpret the policy in accordance with the plain meaning of the language used so as to give effect to the policy as it was written.” Virtual Imaging, 141 So. 3d at 157.(citations omitted).

LEGAL ANALYSIS

The PIP Statute

The Court looks first to the language of the statute at issue. Section 627.736(5)(a)(2)(f) provides:

(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 schedule of Medicare Part B. However, if such services, supplies or care is not reimbursable under Medicare Part B, the insurer may limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 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 worker’s compensation is not required to be reimbursed by the insurer.

As explained in Virtual Imaging, the statute provides the insurance carriers with options for paying reimbursements, including the option of paying 80% of 200% of the allowable amount under the Medicare Part B schedule. However, because this option is permissive and not required, the insured must be put on notice that these limitations are being elected by the insurance carrier. Virtual Imaging, 141 So. 3d at 159. The Virtual Imaging court concluded that because the statute requires the insurer to pay for ‘reasonable expenses’ but merely permits the insurer to use the fee schedules as a basis for limiting reimbursements, the insurer must give notice to the insured that it has elected to use the fee schedules. Id. at 150.

In discussing the meaning of the statute, the Virtual Imaging court made it clear that subsection (5)(a)(2) of the statute provided an “alternative mechanism for determining reasonableness: by reference to the Medicare fee schedules.” Id. at 156 (emphasis supplied). In this regard, the court noted its disagreement with a statement made by the Second District Court of Appeal in Allstate Fire & Cas. Ins. Co. v. Perez ex rel. Jeffrey Tedder, M.D., P.A., 111 So. 3d 960, 962 (Fla. 2nd DCA 2013) [38 Fla. L. Weekly D915a] that the statute gave the option of either paying reasonable expenses or paying fee schedule. The Virtual Imaging court stated:

Although we agree that there are two payment methodologies for satisfying the PIP statute’s coverage mandate, we emphasize that we do not conclude that limiting reimbursement pursuant to section 627.736(5)(a)2. would never satisfy this reasonable medical expenses coverage mandate. In fact, that is the very reason we rephrased the certified question in this case. . . .

Virtual Imaging, 141 So.3d at 157, n.8 (emphasis in original). In other words, the legislature has determined that if an insurer elects to use the fee schedule methodology to calculate reimbursements, the amount paid under that method is the reasonable amount. For this reason, a policy that states it will pay ‘reasonable medical expenses’ and which also states it will calculate reasonableness by utilizing the fee schedule is not ambiguous or conflicting.

Since Virtual Imaging, four District Courts of Appeal have addressed challenges to the Allstate policy, arguing that it is ambiguous and thus fails to comply with the mandate of Virtual Imaging. See, Allstate Fire & Cas. Ins. Co. v. Stand-Up MRI of Tallahassee, P.A., 188 So. 3d 1 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D693b]; Orthopedic Specialists v. Allstate Ins. Co., 177 So. 3d 19 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a], rev. granted, Allstate Ins Co. v. Orthopedic-Specialists, 2016 WL 282060; Allstate Indemn. Co. v. Markley Chiropractic & Acupuncture, LLC,__So. 3d__, 2016 WL1238533, 41 Fla. L. Weekly D793b (Fla. 2nd DCA Mar. 30, 2016); Fla. Wellness & Rehabilitation v. Allstate Fire & Cas. Ins. Co., __ So. 3d __, 2016 WL 3745527, 41 Fla. L. Weekly D1619c (Fla. 3rd DCA, July 13, 2016). Three out of the four courts found the Allstate policy to provide adequate notice to permit reliance on the fee schedules. The Allstate policies state that Allstate will pay “eighty percent of reasonable expenses” and then states, “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.” (emphasis added).

All of the courts have concluded that Virtual Imaging required no magic words in an insurance policy. The First District stated that the “simple notice requirement” of Virtual Imaging is satisfied by language that limits “any amount payable” to the fee schedule-based limitations found in the statute. Stand-Up MRI, 188 So. 3d at 3. The Second District pointed out that, because the No-Fault Act does not provide any other fee schedules apart from those contained in subsection (5)(a)(2), the reference to “any fee schedules” is sufficient. Markley 41 Fla. L. Weekly at D794. The Third District expressly agreed with both of these opinions. Moreover, the Fourth District’s conclusion that Allstate’s policy was ambiguous should not be extended here, because the policy language here does not contain the very minimal language found in the Allstate policy, and which was the basis of the Fourth District’s conclusion. See Orthopedic Specialists, 177 So. 3d at 26.

Here, the policy contains multiple provisions that tell the insured that the payments for medical expenses will be based on the fee schedules. The policy specifically states that the method of calculating reimbursement will be the alternative, fee-schedule method. Moreover, the policy expressly sets out the fee schedules, not even requiring the reader to resort to the statute to learn which reimbursement limitation will apply. The Court rejects Plaintiff’s argument that the policy’s use of the term “Medical Expense Limitation Schedule” is ambiguous, because this exact phrase is not found in the policy or the statute. Florida law provides that when an insurer has not defined a term (and “Medical Expense Limitation Schedule” is not defined in the policy), the policy language “should be read as it would be understood by reasonable people, i.e. given its plain and ordinary meaning.” Auto-Owners Ins. Co. v. Above All Roofing, LLC, 924 So. 2d 842, 847 (Fla. 2nd DCA 2006) [31 Fla. L. Weekly D192b]; see also, Liebel v. Nationwide Ins. Co. of Fla., 22 So. 3d 111 (Fla. 4th DCA 2009) [34 Fla. L. Weekly D2032a] (“When the insurer has not defined a term, the common definition of the term should prevail.”). As the Florida Supreme Court put it, “the first step towards discerning the plain meaning of the phrase is to “consult references [that are] commonly relied upon to supply the accepted meaning of [the] words.” Penzer v. Transportation Ins. Co., 9 So.3d 1000 (Fla. 2010) [35 Fla. L. Weekly S73a] (referencing Webster’s Third New Internat’l Dictionary for the meaning of “publication”, “material”, and “right of privacy”). Based on the definitions found in several common dictionaries, the terms “charges” and “expenses” are fairly interchangeable.

Using the same methodology of discerning the meaning of terms, it is not confusing or difficult to understand that the statutory reference to “treatment” provided to “injured persons” is a reference to medical services rendered to treat injuries. Thus, subsection (5) of the PIP statute is easily understood to relate to, concern, or otherwise govern medical expenses (i.e., charges for treating injuries). And when subsection (5) is reviewed, it is quickly seen that (5)(a)(1) describes how insurers can set a “limitation” on reimbursements for the “medical expenses” pursuant to a fee “schedule.” Since the policy expressly states that “Medical Expense Limitations Schedule” is “set forth in Section 627.736(5)(a), and there is only one reference in (5)(a) to a schedule by which insurers can limit reimbursement of medical charges or expenses, this is clearly not confusing or ambiguous.

Likewise, the policy’s definition of “Medical Expenses” expressly incorporates the statutory fee schedules. The policy clearly describes the fee schedules as a reimbursement limitation, stating that “the amount ‘we’ will pay. . .shall . . .be limited to . . . the following schedule of maximum charges. . .” i.e., a schedule of limitations on the amount to be paid for medical expenses. This is not confusing or contradictory and Plaintiff does not offer any other meaning that “medical expense limitation schedule” could have. Florida law is clear that a policy is only “ambiguous if it is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage.” Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So. 2d 161, 165 (Fla. 2003) [28 Fla. L. Weekly S307d]. As the Second District recently noted, when finding the Allstate policy to be sufficient, “[g]iven that the No-Fault Act does not provide any other fee schedules apart from those contained in subsection (5)(a)(2), said language is devoid of ambiguity.” Markley, supra, at *3 (quoting Excellent Health Servs., Corp. v. United Auto. Ins. Co., No. 13-2221 SP 24(01), 2014 WL 2516476, at *3 (Fla. 11th Cir. Ct. June 3, 2014) [22 Fla. L. Weekly Supp. 126c]). Since there is only one schedule of limitations on medical expense reimbursements contained in either the policy or the statute, the term “medical expense limitation schedule” is not ambiguous and does not constitute some separate method of calculating reimbursements.¹

The Court likewise rejects the argument that The General is not permitted to anticipate that the PIP statute will be amended in the future so that some other fee schedule or payment limitation will be used. The General’s policy language which attempts to anticipate future modifications is still a clear and unambiguous notice to the insured that the company will use whatever payment limitations the PIP statute permits. Moreover, three District Courts of Appeal have approved virtually identical language in the Allstate policy.

Finally, though it is not dispositive of this case, the Court rejects Plaintiff’s argument that there must be a “single, exclusive” election to use the fee schedules in the policy. Subsequent to Virtual Imaging, the legislature amended the PIP statute to include the following provision:

5. Effective July 1, 2012, an insurer may limit payment as authorized by this paragraph only if the insurance policy includes a notice at the time of 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 satisfies this requirement. If a provider submits a charge for an amount less than the amount allowed under subparagraph 1, the insurer may pay the amount of the charge submitted.

Ch. 2012-197, Laws of Florida (C.S.C.S.H.B. 119), §10, codified at §627.736(5)(a)5., Fla. Stat. (2012)(emphasis added). At the hearing on this matter, the parties both stated that there was no dispute that The General had complied with this notice requirement and that the policy form is approved. The General argued that because it complied with the requirement set forth in this provision, the approved policy form constitutes adequate notice to its insured that The General has elected to use the fee schedules for calculating reimbursements.

Plaintiff, on the other hand, argues that the General did not provide clear and unambiguous notice of its election to use the fee schedules “as the singular, exclusive basis for calculating reimbursements under the PIP coverage as required by s. 627.736(5)(a)5” and thus Defendant is not permitted to rely on the fee schedules “at all.” The Court notes that the terms “singular, exclusive” do not appear in either the PIP statute or the Virtual Imaging opinion or any of the other cases addressing actual policy language. In contrast, the Virtual Imaging court indicated that the fee schedules were “an” option that an insurer could use, and only mandated that the insurer give the insured notice that this option was in the policy. The First District described it as a “simple notice requirement”. Stand-UP MRI, 188 So. 3d at 3. Further, the 2012 amendment required an insurer to give notice that it “may” limit reimbursement. Had the legislature wished to codify the ruling in Kingsway Amigo Ins. Co. v. Ocean Health, Ins., 63 So. 3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a], then the legislature would have made it clear that policies must elect only a single payment option and give notice of which option was selected. Instead, the legislature stated that a policy form approved by the department which gave notice that the insurer may rely on the fee schedules was sufficient.

Because Plaintiff contended that the policy must elect only a “single, exclusive” payment methodology, Plaintiff argues that any provision in the policy that appears to incorporate the “fact dependent” methodology is therefore inconsistent and ambiguous. The Court disagrees that this is the law. But more importantly, even if it were the law, the Court disagrees that The General’s policy contains any language that it will use any methodology other than the fee schedule to determine reasonableness. For this reason, any cases in which the courts addressed policies which do attempt to incorporate both methodologies are simply inapplicable to this case and do not support Plaintiff’s arguments here.

CONCLUSION

Because none of the policy terms or provisions cited by Plaintiff create any ambiguity, confusion or contradiction as to what payment methodology The General will be using to determine the reasonable amount to reimburse medical providers, this Court concludes that The General is permitted to rely on the Medicare fee schedules to reimburse Plaintiff in this instance. The General’s policy contains only one method of determining reasonableness: by reference to and reliance upon the statutory fee schedules. This is exactly what Virtual Imaging concluded the law required.

JUDGMENT FOR DEFENDANT

Based on the foregoing, Judgment is hereby entered in favor of Defendant. Plaintiff shall take nothing by this action and shall go hence without day. The court reserves jurisdiction to address any post-judgment matters, such as costs and fees.

__________________

¹Plaintiff’s arguments that using the term “the applicable fee schedule” references some other payment methodology is so lacking in merit, that it will not be discussed further.