24 Fla. L. Weekly Supp. 621a
Online Reference: FLWSUPP 2408SENGInsurance — Personal injury protection — Coverage — Medical expenses — Office of Insurance Regulation memorandum containing multiple warnings is not explicit approval of insurer’s policy as satisfying requirement to provide clear and unambiguous notice of election to use permissive statutory fee schedule — PIP policy providing that insurer will pay 80% of reasonable charges, but also providing that in no event will insurer pay more than 80% of No-Fault Act schedule of maximum charges, does not provide clear and unambiguous notice of intent to limit reimbursement to permissive statutory fee schedule
MOORE CHIROPRACTIC CENTER, INC a/a/o Ny Seng, Plaintiff, vs. STATE FARM MUTUAL INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Clay County. Case No. 2014-SC-939 C. April 27, 2016. Timothy R. Collins, Judge. Counsel: Adam Saben, Shuster & Saben, Jacksonville, for Plaintiff. David Gagnon, Taylor, Day, Grimm & Boyd, Jacksonville, for Defendant.
ORDER GRANTING THE PLAINTIFF’S COUNTERMOTION FOR SUMMARY JUDGMENT ANDDENYING THE DEFENDANT’S AMENDEDMOTION FOR SUMMARY JUDGMENT
This cause came to be heard on the Defendant’s Motion for Summary Judgment and the Plaintiff’s Counter Motion for Summary Judgment and both parties appearing through their attorneys and presenting argument, the Court finds as follows:
Section 627.730 through 627.7405 is known as the “Florida Motor Vehicle No-Fault Law.” It includes Section 627.736, “Required personal injury protection benefits; exclusions; priority; and claim.”
The “Required Benefits” are referenced in Section 627.736(1) and includes “personal injury protection.” The term “medical benefits” in Section 627.736(1)(a) requires payment of “eighty percent of all reasonable expenses for medically necessary . . . services.” In determining whether a charge is “reasonable,” Section 627.736(5)(a) provides that “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 service, treatment, or supply.”
The legislature’s “reasonable” standard is fair to all parties involved. This method of determining the proper amount of reimbursement is commonly referred to as the “default” method of payment. Originally, the “default” method was the only method of determining the amount paid to providers. However, the “default” method resulted in an overwhelming amount of litigation over individual charges in individual cases. Therefore, the legislature amended the statute in 2008 and allowed insurers to elect to pay benefits to providers based upon the Medicare fee schedules. Insurers electing this option could avoid litigation with their insureds and/or the providers who accept an assignment of benefits because the amount owed is easily calculated and therefore would not be subject to litigation. This method is generally referred to as the “permissive” method.
The “permissive method” is contained in Section 627.736(5)(a)1. If the insurer elects this method then the insurer and the insured are bound by the election. Practically speaking, when this election is made in the policy, it binds the provider who accepts an assignment of the benefits due the insured.
The issue before this Court is whether the Defendant, State Farm, made an election of the “permissive method” in its Policy Form 9810A which is the subject of this case. In determining whether the election is made this Court must consider (1) whether State Farm used “A policy form approved by the [Office of Insurance Regulation]” sufficient to “satisfy this requirement” (627.736(5)(a)5) and/or (2) whether the policy “clearly and unambiguously elect[s] 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].Policy Form Approved by the Department of Insurance
The legislature has said that if a policy meets the requirements of the Office of Insurance Regulation (hereinafter referred to as “OIR”), then it satisfies the notice requirement. If there existed an OIR memorandum which definitively sets forth that the specific language used in this policy meets the notice requirement, then both the insurer and the insured (including any provider who accepted an assignment of benefits) are bound by the Medicare fee schedule, and this Court would be duty bound to enforce the clear election permitted by the legislature. However, the OIR memorandum dated October 5, 2012, which addresses the Defendant’s Policy Form 9810A “contains multiple warnings” which are “better viewed as a suggestion as opposed to the explicit approval satisfying the statutory requirement. Neurology Partners, P.A. d/b/a Emas Spine & Brain a/a/f Judi Fulco v. State Farm Mutual Automobile Insurance Company, (Order of Duval County Court Judge Eric C. Roberson, case number 2014-SC-4547, March 4, 2016 [24 Fla. L. Weekly Supp. 52b].Clear and Unequivocal Election of the Permissive Method
The policy language chosen by the insurer in this case clearly contains qualifying definitions which could be used by the insurer, insured, or provider who accepts an assignment to argue that the language is not clear and unambiguous. The policy provides:
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 federal Centers for Medicare and Medicaid Service, . . . .
Each of the words or phrases in bold letters are defined in the definition section of the policy which governs this action. Reasonable charge is defined as:
An amount determined by us to be reasonable in accordance with the No-Fault Act, considering:
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 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.
Thus, the Defendant, State Farm, agrees to pay the Medicare fee schedule (permissive election), unless they believe that the amount should be less, and in that case, they have the option of paying what they determine to be the reasonable charge (default method). Even the attorney representing the Defendant during the hearing said, “the most we will pay is the Medicare fee schedule.” Obviously, if the Medicare fee schedule is the most they will pay, then there will be times when they could decide to pay a lesser amount. If there is a lesser amount, then the insurer has not made a clear and unequivocal election of the permissive payment method.
THEREFORE, it is
ORDERED AND ADJUDGED:
1. Plaintiff’s Counter Motion for Summary Judgment is granted. The Defendant cannot limit reimbursement pursuant to the “permissive” payment methodology based upon a failure to properly amend its policy of insurance (Form 9810A).
2. The Defendant’s Amended Motion for Summary Judgment is denied.
