24 Fla. L. Weekly Supp. 535a
Online Reference: FLWSUPP 2407HAMIInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy that defines “unreasonable or unnecessary medical benefits” to be anything in excess of maximum charges set forth in No-Fault Law and affirmatively states that insurer will limit reimbursement to no more than 80% of schedule of maximum charges clearly and unambiguously elects to limit reimbursement to permissive statutory fee schedule
NEUROLOGY PARTNERS, P.A. D/B/A EMAS SPINE & BRAIN SPECIALISTS as assignee for KAREN HAMILTON, Plaintiff, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2016-SC-001016. August 15, 2016. Scott F. Mitchell, Judge.
AMENDED ORDER GRANTING DEFENDANT’SMOTION FOR SUMMARY FINAL JUDGEMENTBASED ON THE POLICY ENDORSEMENTAND DENIAL OF PLAINTIFF’S MOTION FORSUMMARY JUDGMENT AS TO APPLICATIONOF THE MEDICARE FEE SCHEDULEAND MEMORANDUM OF LAW
THIS MATTER having come before the Court for hearing on July 21, 2016 on Defendant’s Motion for Summary Final Judgement Based on the Policy Endorsement and Plaintiff’s Motion for Summary Judgment as to Application of the Medicare Fee Schedule and Memorandum of Law, and the Court having reviewed the Court file, including all record evidence presented, the parties’ motions and supporting documents, and the Court having heard argument, rules as follows:
ISSUE
The issue before the Court is whether the Defendant, PROGRESSIVE AMERICAN INSURANCE COMPANY, (“PROGRESSIVE”) properly amended its automobile insurance policy on October 17, 2011 to add endorsement A041 FL (06/11) and avail itself of the permissive payment option of Fla. Stat 627.736(5)(a)(2) and base its reimbursement methodology on 200% of Medicare Part B for Personal Injury Protection (P.I.P) benefits.
In forming its ruling, this Court is guided by the opinion by the Florida Supreme Court in Geico General Insurance Company v. Virtual Imaging Services, 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a] and Allstate Fire & Cas. Ins. v. Stand Up MR1 of Tallahassee, P.A., 188 So. 3d 1 (Fla. App. 1st Dist. 2015) [40 Fla. L. Weekly D693b]. In Virtual, the Supreme Court ruled that the insurer was required to give notice to its insured before using Medicare fee schedules to limit reimbursement for medical services.FACTS
The facts of this case are not in dispute. Claimant, Karen Hamilton, was involved in a motor vehicle accident on December 8, 2011 and sought treatment related to injuries sustained at Neurology Partners, P.A. d/b/a Emas Spine & Brain Specialists (“Neuro Partners”) in Jacksonville, Florida. Nero Partners submitted its bills to the Defendant insurance carrier, PROGRESSIVE, which were paid under the permissive methodology of Fla. Stat. 627.736(5)(a)(2), which permits the insurer to use Medicare fee schedules as a basis for limiting reimbursements for medical services. The Plaintiff subsequently filed suit, alleging that the Defendant failed to properly amend its policy, and, therefore, the proper methodology to calculate reimbursement is found in Fla. Stat 627.736(5)(a)(1), which caps payment at 80% of “reasonable expenses for medically necessary services.” The parties have already agreed that there are no remaining disputed issues of fact and the Court’s decision will be dispositive.
DEFENDANT’S POSITION
The Defendant’s position is that it gave proper notice to the insured (and to any medical provider of the insured) that it was going to reimburse submitted bills under the permissive payment methodology and, therefore, properly reimbursed the Plaintiff using the Medicare Fee Schedule.PLAINTIFF’S POSITION
The Plaintiff’s position is that the Defendant did not properly elect the permissible payment methodology because the language of amendatory endorsement A041 FL (06/11) did not “clearly and unambiguously” place the insured on notice of the calculation methodology that would be employed by the Defendant.ANALYSIS
The analysis by this Court is guided by the holding in Geico General Insurance Company v. Virtual Imaging Services, 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]. In Virtual, the Florida Supreme Court ruled that automobile insurers were required to give notice to their insureds before using Medicare fee schedules to limit reimbursement for medical services. In this case, the Defendant amended its automobile insurance policy with respect to P.I.P on October 17, 2011 by adding amendment A041 FL (06/11), which states, in pertinent part:
Personal Injury Protection Coverage Endorsement
The “Unreasonable or Unnecessary Medical Benefits” provision in Part II(A) is deleted and replaced by the following:
UNREASONABLE OR UNNECESSARY MEDICAL BENEFITS
If an insured person incurs medical benefits that we deem to be unreasonable or unnecessary, we may refuse to pay for those medical benefits and contest them.
We will determine to be unreasonable any charges incurred that exceed the maximum charges set forth in Section 627.736(5)(a)(2) (a through f) of the Florida Motor Vehicle No-Fault Law, as amended. Pursuant to Florida law, we will limit reimbursement to, and pay no more than, 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 of the Florida Statutes, 75 percent of the hospital’s usual and customary charges;
c. for emergency services and care as defined by s. 395.002 of the Florida Statutes, 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; and
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, we will limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under Section 440.13 of the Florida Statutes, 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 will not be reimbursed by us. . . .
[W]e will reduce any payment to a medical provider under this Part II(A) by any amounts we deem to be unreasonable medical benefits. . . .
Applying the Virtual analysis to this amendatory language, this Court finds that the Defendant places its insured on proper notice that reimbursement will be made under the permissive option of the P.I.P Statute. The Defendant clearly defines, in the language of its endorsement, that it will determine an “unreasonable or unnecessary benefit” to be anything in excess of the maximum charges set forth in Section 627.736(5)(a)(2) (a through f) of the Florida Motor Vehicle No-Fault Law. Furthermore, in the event the Defendant determines an “unreasonable or unnecessary benefit,” it will limit reimbursement to no more than 80% of the listed maximum charges. Defendant’s endorsement language clearly and affirmatively notifies the insured what will constitutes an “unreasonable or unnecessary benefit” and what reimbursement amount PROGRESSIVE will provide when this event occurs.
The Virtual opinion states that the election for the “permissive methodology” must be made in “clear and unambiguous” language. While the opinion discusses the importance of putting the correct language into an insurance policy with respect to “fee schedules”, the opinion also discusses the importance of advising the insured of the election of a particular methodology. Specifically, the Supreme Court rephrased the certified question from the Third District Court of Appeals to ask:
WITH RESPECT TO PIP POLICIES ISSUED AFTER JANUARY 1, 2008, MAY AN INSURER LIMIT REIMBURSEMENT BASED ON THE MEDICARE FEE SCHEDULES IDENTIFIED IN SECTION 627.736(5)(a), FLORIDA STATUTES WITHOUT PROVIDING NOTICE IN ITS POLICY OF AN ELECTION TO USE THE MEDICARE FEE SCHEDULES AS THE BASIS FOR CALCUALTING REIMBURSMENTS?
Virtual, at 3 (emphasis added).
From the very beginning of its analysis, the Supreme Court was focused on the clarity of the election and notice of same to its insured of the permissive payment methodology. In discussing Subsection (5)(a)2, the Court goes on to discuss the permissive payment option and states:
This provision, adopted in the 2008 amendments, states that an insurer “may limit reimbursement” for certain services rendered, such as MRIs, to “200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.” § 627.736(5)(a) 2.f., Fla. Stat,. (emphasis supplied). The dispute in this case centers around GEICO’s reliance on subsection (5)(a)2. To limit reimbursements without providing notice in its policy of its election to do so.
Virtual at 7. (emphasis in original)
Relying on this analysis, PROGRESSIVE’s endorsement language constitutes a “clear and unambiguous” election in the eyes of this Court.
The Plaintiff in this case focuses on this Court’s previous ruling in the case of St. John’s Medical Center (Christina Brown) v. Direct General, 21 Fla. L. Weekly Supp. 925a (Fla. 4th Jud. Cir., Dec. 19, 2013). The Plaintiff relies on the reasoning of this case to support that PROGRESSIVE’s endorsement is ambiguous regarding the election of its payment methodology; however, this Court notes significant differences between PROGRESSIVE’s endorsement language and that of Direct General’s in the Brown case. First, the policy in the Brown case states, “We may reduce any medical expense payment to a provider by any amount we deem to be unreasonable;” however, the policy makes no effort to define what amount would constitute an “unreasonable” amount. The language in the policy at issue is significantly different, as the language of the endorsement clearly and unequivocally defines what an “unreasonable medical benefit” is — which is amounts charged above the fee schedule. Second, the policy language in the Brown case states that Direct General “may” reduce the subject medical expense. The term “may” is a permissive term that does not affirmatively indicate to the insured that the insurer will utilize the permissive fee schedule. The language in the policy at issue uses affirmative language that indicates PROGRESSIVE will utilize the fee schedule when payment demands exceed this amount. As such, policy at issue satisfies the conditions of Virtual.
ACCORDINGLY, it is hereby
ORDERED and ADJUDGED that Plaintiff’s Motion for Summary Judgment as to Application of the Medicare Fee Schedule and Memorandum of Law is hereby DENIED; Defendant’s Motion for Summary Final Judgement Based on the Policy Endorsement is hereby GRANTED; it is further ORDERED and ADJUDGED that Plaintiff shall take nothing by this action and Defendant shall go hence without day.
