23 Fla. L. Weekly Supp. 1057a
Online Reference: FLWSUPP 2310MORAInsurance — Personal injury protection — Coverage — Medical expenses — Insurer that breached PIP policy by utilizing statutory fee schedule that was not clearly and unambiguously elected in policy when processing medical provider’s bill is not entitled to challenge reasonableness of charges
FLORIDA HOSPITAL MEDICAL CENTER, a/a/o Samantha Morales, Plaintiff, v. PROGRESSIVE SELECT INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2014-SC-1682-O. November 6, 2015. Honorable Tina L. Caraballo, Judge. Counsel: David B. Alexander, for Plaintiff. Neil Andrews, for Defendant.
ORDER ON PLAINTIFF’S MOTION FORSUMMARY JUDGMENT
THIS CAUSE came before the Court on October 8, 2015, on Florida Hospital Medical Center as assignee of Samantha Morales (“provider” or “Florida Hospital”) Motion for Final Summary Judgment.
1. Factual Background
Progressive Select Insurance Company’s (“Progressive” or “insurer”) insured, Ms. Samantha Morales, was injured in a motor vehicle accident on August 27, 2009. On the day of the accident, Ms. Morales visited Florida Hospital’s facility where she was evaluated and treated for the injuries she sustained in the aforementioned accident. In consideration for treatment, Ms. Morales assigned her personal injury protection and medical payments insurance benefits to Florida Hospital. Thereafter, Florida Hospital issued a bill to Progressive that contained charges for four different items. Rather than paying 80% of Florida Hospital’s charged amount for each of the four CPT codes billed, Progressive limited reimbursement to 80% of 75% of Florida Hospital’s usual and customary charge for emergency services with respect to each charge it billed. Thus, Florida Hospital was paid $1,271.40 instead of $1,695.20 and this suit followed.
2. Summary of the Argument
The issue before this Court is being litigated in County Courts throughout this State. Florida Hospital argues that, as a result of the 2008 amendment to the Personal Injury Protection (“PIP”) statute and the Virtual Imaging1 decision, this Court may determine Progressive breached its reimbursement obligation when it limited reimbursement by payment pursuant to the Schedule of Maximum Charges while failing to properly elect the method in its insurance policy. Specifically, the insurer’s Explanation of Benefits in the instant case states: “The allowable amount has been calculated pursuant to Florida Statute 627.736(5) which limits reimbursement to 75% of the hospital’s usual and customary charges for emergency services.”
Florida Hospital argues its damages are measured at the time of the breach and that it should be paid 80% of the charged amount minus the amount Progressive actually paid. Progressive disagrees and argues that it may challenge the reasonableness of a provider’s charge at any time. Progressive further argues that its ability to challenge reasonableness is not impacted by its using the Schedule of Maximum Charges even if it failed to make a proper election in its policy. In other words, Progressive would have this Court find that it can pay in any fashion it chooses without repercussion because it always has the ability to challenge the reasonableness of the charge under § 627.736(4)(b), Florida Statutes. Progressive’s position, while not articulated, but in practice, is also that its prior recognition in the Explanation of Benefits that the charge is “usual and customary” is now irrelevant.
In response, Florida Hospital argues Progressive is attempting to profit from its own breach of contract by getting a second bite at the apple. Florida Hospital also contends Progressive’s position is counter to the purpose of PIP — virtually automatic payment decisions and the reason for the addition of the Schedule of Maximum Charges in the statutes amendment.
The parties in the Virtual Imaging case stipulated that the medical provider’s charge for the MRI was reasonable and the Florida Supreme Court had only to decide the issue of incorporation of the Schedule of Maximum Charges into the policy. Geico Gen. Ins. Co., 141 So. 3d at 151. The Florida Supreme Court did not address the specific issue of the consequence for the insurer’s payment under the Schedule of Maximum Charges when it did not properly incorporate the election in the policy of insurance. However, the Virtual Imaging Court did approve the earlier decision of the Third District Court of Appeal that affirmed the lower court’s grant of summary judgment in favor of the medical provider when the insurer paid under, but had not incorporated into its policy, the Schedule of Maximum Charges. The court concluded the insurer was required to reimburse the medical provider for the “greatest amount possible within the language of the policies,” which was 80% of the provider’s invoice. Geico Indem. Co. v. Virtual Imaging Svcs., Inc., 79 So. 3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a] (Virtual I).
Progressive argues that at the time payment was made in this case and others, insurers did not have the benefit of the Virtual Imaging rulings and were not aware that failure to include the election in the policy of insurance would prohibit its use. The Court recognizes this as a valid statement, but it does not change the result in the case. Frequently, the conduct of parties in litigation is viewed through the prism of laws and decisions that post-date the action taken. The parties have a difficult decision at that point — dig in and defend at all costs or settle.
3. Decision of the Court
Progressive’s insurance policy did not incorporate the election to pay under the Schedule of Maximum Charges. Its decision to reimburse Florida Hospital under the Schedule of Maximum Charges was a breach of contract. This Court agrees with the determination of the Virtual I decision that requires Progressive to pay Florida Hospital the “greatest amount possible within the language of the policies” or 80% of its charges. Further, the Court rejects Progressive’s reliance on subsection (4)(b) to retroactively deny coverage or challenge the charge at any time including after payment of the claim. Progressive’s interpretation would render the other elements of (4)(b) meaningless and defeat the entire purpose of PIP.2
Accordingly, Florida Hospital’s Motion for Final Summary Judgment is hereby GRANTED. Florida Hospital is entitled to $423.80, plus $122.27 in prejudgment interest for a total of $546.07 all of which shall bear interest at the rate of 4.75% for the current year and thereafter at the prevailing annual rate as provided in § 55.03, Fla. Stat., all for which let execution issue. The Court reserves jurisdiction on all remaining issues.
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1Geico Gen. Ins. Co. v. Virtual Imaging Svcs., Inc., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
2The PIP statute has been amended frequently and the provisions are not always logically cohesive. Since the statute’s sunset, the following amendments have occurred: Laws 2007, c. 2007-324, § 13, eff. Jan. 1, 2008; Laws 2007, c. 2007-324, § 20, eff. Jan. 1, 2008; Laws 2008, c. 2008-4, § 153, eff. July 1, 2008; Laws 2008, c. 2008-220, § 22, eff. July 1, 2008; Laws 2009, c. 2009-21, § 86, eff. July 7, 2009; Laws 2012, c. 2012-151, § 17, eff. April 24, 2012; Laws 2012, c. 2012-197, § 10, eff. Jan. 1, 2013; Laws 2012, c. 2012-197, § 11, eff. Dec. 1, 2012; Laws 2013, c. 2013-93, § 14, eff. July 1, 2013; Laws 2015, c. 2015-135, § 7, eff. July 1, 2015.
