23 Fla. L. Weekly Supp. 982b
Online Reference: FLWSUPP 2309RONDInsurance — Personal injury protection — Coverage — Medical Expenses — Where definition of “reasonable charge” in PIP policy is hybrid of factors found in reasonable amount method of reimbursement and provisions from fee schedule method of reimbursement, policy is ambiguous as to reimbursement method and did not specifically elect fee schedule method of reimbursement
CRESPO & ASSOCIATES, P.A., as assignee of, VERONICA RONDON, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 15-CC-0001357, Division U. December 18, 2015. Frances M. Perrone, Judge. Counsel: Anthony T. Prieto, Prieto, Prieto & Goan, P.A., Tampa, for Plaintiff. Robert H. Oxendine, Oxendine & Oxendine, P.A., Tampa, for Defendant.
ORDER ON PLAINTIFF’S AND DEFENDANT’SCOMPETING MOTIONS FOR SUMMARY JUDGMENT
THIS CAUSE having come before the Court on November 13, 2015 concerning “Plaintiff’s Motion for Summary Judgment” dated June 15, 2015, “Defendant’s Motion for Full and Final Summary Judgment and Supporting Memorandum of Law” dated June 22, 2015, and the “Supplemental Memorandum of Law in Support of Defendant’s Motion for Summary Judgment” dated October 12, 2015. The Court having considered the motions and memoranda, the record, and the arguments of counsel, and being otherwise fully advised in the premises,
ORDERS AND ADJUDGES as follows:
A. Introduction
1. This is an action seeking personal injury protection (“PIP”) insurance benefits.
2. On or about September 4, 2014, Veronica Rondon (the “Insured Patient”) was involved in a motor vehicle accident, and as a result, reported bodily injuries. At the time of the accident, the Insured Patient was covered for PIP under the relevant policy of insurance (Policy Form 9810A), issued by the Defendant (“State Farm”).
3. The service date at issue is 9/24/14, for HCPCS code 99204.
4. For PIP insurers who properly invoke the PIP’s statute’s “schedule of maximum charges,” Section 627.736(5)(a)1.f(I), Florida Statutes (2014) would set the PIP insurer’s payment obligation at 80% of 200% of the participating physicians fee schedule of Medicare Part B.
5. The participating physicians fee schedule of Medicare dictates the reimbursable amount for HCPCS Code 99204 is $167.07.
6. As such, for PIP insurers who properly invoke the PIP statute’s schedule of maximum charges, HCPCS Code 99204 would correctly be reimbursed at 80% of 200% of $167.07, which is $267.31.
7. In this case, State Farm paid the Plaintiff $227.22. The relevant Explanation of Benefits form states: “[o]ur payment is based upon a reasonable amount pursuant to both the terms and conditions of the policy of insurance under which the subject claim is being made as well as the Florida No-Fault Statute, which permits, when determining a reasonable charge for a service, an insurer to consider usual and customary charges and payments accepted by the provider, reimbursement levels in the community and various federal and state fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for services. The payment for this Nurse practitioner/Physician Assistant service has been evaluated using Medicare Claims Processing Manual guidelines and the applicable Medicare Part B fee schedule.”
B. Applicable Case Law, Statutory Provisions and Insurance Policy Definitions
8. Historically, the PIP statute has included provisions which explained PIP insurers are required to pay the “reasonable” amount of the insured’s medical expenses, and those provisions are referred to as the “Reasonable Amount Method”1 or the “fact dependent method” of calculating PIP benefits. Starting in 2008, the Florida Legislature added a second payment calculation method, which is optional and permissive, and it is commonly referred to as the “Fee Schedule Method.”2
9. This lawsuit involves the version of the PIP statute, which was amended in 2012 and took effect on January 1, 2013. It is important to note that version of the PIP statute renumbered the subsections of the Reasonable Amount Method and the Fee Schedule Method. So, before January 1, 2013, the Reasonable Amount Method was found in subsections (1)(a) and (5)(a)1, but it is now found in subsections (1)(a) and (5)(a). Before January 1, 2013, the Fee Schedule Method was found in subsections (5)(a)2-5, but it is now found in subsections (5)(a)1-5.
10. As of January 1, 2013, the version of the PIP statute at issue in this case, includes the following provisions which pertain to the Reasonable Amount Method and the Fee Schedule Method:
627.736 Required personal injury protection benefits; exclusions; priority; claims. —
[The “Reasonable Amount Method” is found in (1)(a) and (5)(a), and states:]
(1) REQUIRED BENEFITS. — An insurance policy complying with the security requirements of s. 627.733 must provide personal injury protection . . . to a limit of $10,000 in medical and disability benefits and $5,000 in death benefits resulting from bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle as follows:
(a) Medical benefits. — Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services if the individual receives initial services and care . . . .
. . . .
(5) CHARGES FOR TREATMENT OF INJURED PERSONS. —
(a) A physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies rendered, and the insurer providing such coverage may pay for such charges directly to such person or institution lawfully rendering such treatment if the insured receiving such treatment or his or her guardian has countersigned the properly completed invoice, bill, or claim form approved by the office upon which such charges are to be paid for as having actually been rendered, to the best knowledge of the insured or his or her guardian. However, such a charge may not exceed the amount the person or institution customarily charges for like services or supplies. 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.
[The “Fee Schedule Method” is found in (5)(a)1-5, and states:]
1. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:
a. For emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges.
c. For emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 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 physicians 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 B, as provided in this sub-subparagraph, 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 workers’ compensation is not required to be reimbursed by the insurer.
2. For purposes of subparagraph 1., the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the service 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 to services, supplies, or care rendered during that service 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 schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B. For purposes of this subparagraph, the term “service year” means the period from March 1 through the end of February of the following year.
3. Subparagraph 1. does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation. An insurer that applies the allowable payment limitations of subparagraph 1. must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider is entitled to reimbursement under Medicare due to restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes. However, subparagraph 1. does not prohibit an insurer from using the Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, to determine the appropriate amount of reimbursement for medical services, supplies, or care if the coding policy or payment methodology does not constitute a utilization limit.
4. If an insurer limits payment as authorized by subparagraph 1., 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.
5. 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.
§627.736(1)(a), (5)(a)1-5, Fla. Stat. (2012-2015) (emph. added).
12. The Fee Schedule Method is optional. However, in order to rely on the Fee Schedule Method, a PIP insurance company must clearly and unambiguously chose that method in its insurance policy. In Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc.,141 So.3d 147, 157 (Fla. 2013) [38 Fla. L. Weekly S517a], the Florida Supreme Court spoke to this issue, and held that PIP insurers have “a choice in dealing with their insureds as to whether to limit reimbursements based on the Medicare fee schedules or whether to continue to determine the reasonableness of provider changes for necessary medical services rendered to a PIP insured based on the factors enumerated in [former] section 627.736(5)(a)1 [now (5)(a)].” (Emph. added). In that case, the Florida Supreme Court approved Kingsway Amigo Insurance Company v. Ocean Health, Inc., 63 So.3d 63, 67 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a], which held that Section 627.736 “allows an insurer to choose between two different payment calculation methodology options” and “anticipates that an insurer will make a choice.” (Emph. added). Most recently, the Florida Fourth District Court of Appeal held:
To elect a payment limitation option, the PIP policy must do so “clearly and unambiguously.” A policy is not sufficient unless it plainly and obviously limits reimbursement to the Medicare fee schedules exclusively. The policy cannot leave [the PIP insurance company’s] choice of reimbursement method in limbo . . . . The policy must make it inescapably discernable that it will not pay the “basic” statutorily required coverage and will instead substitute the Medicare fee schedules as the exclusive form of reimbursement.
Orthopedic Specialists v. Allstate Ins. Co., __ So.3d __, 2015 WL 4927203, *6 (Fla. 4th DCA Aug. 19, 2015) [40 Fla. L. Weekly D1918a] (emph. added).
13. Simply stated, a PIP insurer cannot “alternate between the two methodologies at its whim.” University Community Hospital v. Mercury Ins. Co. of Fla., 21 Fla. L. Weekly Supp. 89a (Fla. 13th Jud. Cir., Hillsborough County Ct., September 16, 2013) (Judge Scott A. Farr) (PIP policy which cited to fee schedule method but did not choose that method alone but allowed insurer to choose between the two different methods at insurer’s discretion was “not permissible” because insurance company “may not alternate between the two methodologies at its whim as [the] policy allows”).
14. In this case, the limit of liability portion of State Farm’s insurance Policy Form 9810A explicitly states:
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.
15. Further, State Farm’s Policy Form 9810A defines Medical Expenses as follows:
reasonable charges incurred for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including medically necessary prosthetic devices and medically necessary ambulance, hospital, and nursing services. . . .
16. Lastly, State Farm’s Policy Form 9810A defines Reasonable Charges as follows:
Reasonable Charge, which includes reasonable expense, means an amount determined by us to be reasonable in accordance with the No-Fault Act, considering one or more of the following:
1. usual and customary charges;
2. payments accepted by the provider;
3. reimbursement levels in the community;
4. various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages;
5. the schedule of maximum charges in the No-Fault Act,
6. other information relevant to the reasonableness of the charge for the service, treatment, or supply; or
7. Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, if the coding policy or payment methodology does not constitute a utilization limit.
Notably, State Farm’s definition of “reasonable charge” is a hybrid of various factors found in the Reasonable Amount Method of Section 627.736(5)(a) and the Medicare Fee Schedule Method of Section 627.736(5)(a)1-5. Paragraph 1, 2, 3, 4, and 6 quoted above correspond to elements of the reasonable amount method listed in Section 627.736(5)(a). However, paragraphs 5 and 7 quoted above correspond to elements of the Fee Schedule Method found in Section 627.736(5)(a)1 and 3.
17. As explained in Virtual Imaging, Orthopedic Specialists, and University Community Hospital, as well as other cases, State Farm is not allowed to utilize certain provisions from the Reasonable Amount Method and certain provisions from the Fee Schedule Method, mix them together, and create a hybrid method.
18. State Farm erroneously suggests that the hybrid method contained in Policy Form 9810A policy must be deemed to be legal because that form was approved by the Florida Office of Insurance Regulation pursuant to Section 627.736(5)(a)5. This Court disagrees.
20. Mere approval by the Florida Office of Insurance Regulation of State Farm’s “notice” does not validate the entire policy. See, e.g., Gonzalez v. Associates Life Ins. Co., 641 So.2d 895(Fla. 3d DCA 1994); Kaufman v. Mutual of Omaha Ins. Co., 681 So.2d 747(Fla.3d DCA 1996) [21 Fla. L. Weekly D171a].
23. This Court is further not persuaded in Defendants argument that Section 627.736(5)(a)3 works independently of Subparagraph (5)(a)1. Rather this Court finds that Section 627.736(5)(a)3 is to be read in conjunction with Subparagraphs (5)(a)1,2,4, and 5.
24. Because State Farm has not clearly and unambiguously elected a single payment methodology, State Farm is not lawfully authorized to rely on the Fee Schedule Method. Accordingly, State Farm cannot prevail on its motion for summary judgment.
25. Because State Farm cannot rely on the Fee Schedule Method, the Plaintiff’s claim defaults back to the Reasonable Amount Method. At this juncture of the case, the reasonable amount of the Plaintiff’s claim remains a disputed issue of material fact. As such, the Plaintiff cannot prevail on its motion for summary judgment.
25. Based on the foregoing, the Plaintiff’s Motion for Summary Judgment is DENIED WITHOUT PREJUDICE, and the Defendant’s Motion for Full and Final Summary Judgment is DENIED.
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1See, e.g., MRI Associates of St. Pete d.b.a. Saint Pete MRI, a.a.o. Fikreta Jakupai v. Geico Indemnity Company, 20 Fla. L. Weekly Supp. 814a, ¶15 (Fla. 13th Jud. Cir, Hillsborough County Court, May 30, 2013) (referring to the “reasonable amount method”).
2See, e.g., Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So.3d 147, 158 (Fla. 2013) [38 Fla. L. Weekly S517a] (referring to “the permissive Medicare fee schedule method”).
