23 Fla. L. Weekly Supp. 168a
Online Reference: FLWSUPP 2302EMARInsurance — Personal injury protection — Coverage — Medical expenses — Deductible — Proper formula for payment of PIP claim requires that deductible be applied to 100% of total amount billed prior to any percentage reductions
EXCELLENT HEALTH CARE SERVICES (A/A/O EDWIN MARTINEZ), Plaintiff, v. KINGSWAY AMIGO INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami Dade County. Case No. 13-1126 SP 24. July 21, 2015. Donald J. Cannava, Judge. Counsel: Ryan Peterson, The Patiño Law Firm, Hialeah, for Plaintiff.
AFFIRMED (PCA). (Kingsway Amigo Ins. Co. v. Excellent Health Services (a/a/o Edwin Martinez), 11th Cir., Case No. 15-330 AP, 12-20-2017) [Appellate Counsel: Douglas Stein, for Appellants. Ryan A. Peterson, for Appellee.]
ORDER ON COMPETING MOTIONS FOR SUMMARYJUDGMENT RE: APPLICATION OF DEDUCTIBLEAND FINAL JUDGMENT FOR PLAINTIFF
COMES NOW, the COURT, and after hearing argument and reviewing the pertinent materials, hereby makes the finding rulings on the Parties’ respective motions for summary judgment, and states as follows:
The parties have stipulated that the sole remaining issue in this lawsuit for recovery of No Fault Benefits is whether the insurer correctly calculated the application of the policy deductible. The policy at issue has a $1,000 deductible, which must be satisfied to trigger the insurance company’s payment obligation. The insured paid $1,000 for medical services at his doctor’s usual and customary rates. However, the amounts the insured paid for those services were greater than the insurance policy’s reimbursement limitations, as the insurer has limited its reimbursement in the policy pursuant the schedule of maximum charges found in Fla. Stat. 627.736(5)(a) (the “fee schedule”).
The insurer has calculated its total reimbursement by applying the fee schedule to the total amount billed by the doctor’s office (including to those services for which the insured paid amounts greater than the fee schedule), and then subtracting the deductible from the remainder. By doing this, the insurance company has credited the insured with only $746.84 for the $1,000 she paid for the initial medical services.
The medical provider (the Plaintiff in this action) objects to the calculation, and reasons that if an insured pays $1,000 for usual and customary medical services related to an accident, which are medically necessary, the insurer’s obligation is triggered, even if the payments were greater than what the insurance company would have had to pay for per the policy limitations. The Plaintiff suggests that the insurer’s calculation violates the provisions of the statute, and of the insurance policy at issue.
ANALYSIS
As it pertains to the issue of deductible calculation, the relevant text of the statute is found in Fla. Stat. 627.739(2):
Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1,000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736.
The deductible provision indicates that the deductible amount must be subtracted from “100 percent of the expenses and losses described in s. 627.736.” The Court’s analysis turns on the phrase “described in s. 627.736.” The phrase is read by the Defendant to mean medical bills after its insurance policy limitations are applied. The Defendant reasons that its insurance policy indicates that the insurance company may pay by the fee schedules, and as the fee schedules are “described” in the No Fault Act, the Court should apply the deductible after the fee schedule. The Court rejects this view.
Nowhere does the statute suggest the deductible should be subtracted from the amounts described in the insurance policy, but only amounts described in the No Fault Act. Additionally, the plain language of the Statute does not require the insured to pay for expenses and losses “covered by” the insurance policy to count towards the deductible, but rather, “described in” the Act. It is noteworthy that prior to 2003, the deductible provision above reads that expenses and losses are to be subtracted from “benefits otherwise due.” That language was removed in CS/SB 32A (2003). To adopt the Defendant’s view of the Statute is to abrogate the 2003 legislative changes, which is impermissible. The Florida Supreme Court has ruled that it “is a basic rule of statutory construction that ‘the Legislature does not intend to enact useless provisions’ ” Martinez v. State, 981 So.2d 449, 452 (Fla. 2008) [33 Fla. L. Weekly S125a]. See also Borden v. East-European Ins. Co., 921 So.2d 587, 595 (Fla. 2006) [31 Fla. L. Weekly S34a] (“the Legislature does not intend to enact useless provisions, and courts should avoid readings that would render part of a statute meaningless.”) Re-Employment Services, Ltd. v. NLAC, 969 So.2d 467 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D2725a] (holding that interpretations that “vitiate” the “pertinent provisions of the statute” should be rejected).
Usual and customary amounts are “described in” the No Fault Act, just as fee schedule limitations are, so the amounts billed by the Plaintiff are described in the No Fault Act, and the deductible should have been subtracted from the total amount billed. The broad “100 percent” language in Fla. Stat. 627.739 was not modified in the 2008 legislative changes when the fee schedule option was added by our legislature.
Additionally, the insurance policy itself appears to be ambiguous at best for the insurer. It indicates that “the amount of any deductible . . . shall be deducted from the total amount of expenses and losses pursuant to Section 627.739(2), Florida Statutes.” “Expenses and losses” is not bolded, and is not a defined term by the policy. While the term “medical expenses” ties in to the fee schedule, the deductible is not subtracted from medical expenses, but instead from the broader undefined term “expenses and losses.” Assuming arguendo that the above statutory analysis is incorrect, the insurance policy’s failure to define the term “expenses and losses”, which could apply to the entire medical bill, is fatal to its position. “Ambiguities in insurance contracts are resolved in favor of the insured.” GEICO Indem. Co. v. Virtual Imaging Servs., Inc., 79 So.3d 55, 58 (Fla. 3d DCA, 2012) [36 Fla. L. Weekly D2597a], and as the Plaintiff here “stands in the shoes of the policyholders, and the benefit of the interpretation passes to it.” Id at FN 2.
In assessing the statutory interplay between §627.739, §627.736 and the policy language, the Court agrees with the reasoning in William J. Gogan (As Assignee of Tara Ricks) v. USAA General Indemnity Company, 21 Fla. L. Weekly Supp. 97c (17th Judicial Circuit, 2013); New Symrna Imaging, LLC (a/a/o Megan McClanahan) v. Garrison Property and Casualty Ins. Co., 20 Fla. L. Weekly Supp. 77a (18th Judicial Circuit, 2012); Flagler Hospital, Inc. (a/a/o Devin Sapp) v. Peak Property & Casualty Ins. Corp., 18 Fla. L. Weekly Supp. 597a (7th Judicial Circuit, 2011), and Flagler Hospital, Inc. (a/a/o Jody C. Rigdon) v. Progressive Select Ins. Co., 18 Fla. L. Weekly Supp. 620c (7th Judicial Circuit, 2011) finding that the Defendant must apply the deductible to 100 percent of the total amount billed prior to any percentage reductions. The rationale set forth in these cases for preventing a percentage reduction to losses prior to the application of the deductible applies as well to the Defendant’s premature reduction of the total amount billed in this case.CONCLUSION
The Plaintiff’s Motion for Summary Judgment is GRANTED and the Defendant’s Motion for Summary Judgment is DENIED. Defendant’s erroneous application of the deductible to a reduced amount of medical expenses resulted in an underpayment, as a matter of law, entitling Plaintiff to recover $253.16, for which let execution issue, to run at the statutory interest rate as of the day of this judgment. The Court reserves jurisdiction for any post-judgment motions.
