24 Fla. L. Weekly Supp. 532a
Online Reference: FLWSUPP 2407PHARInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy providing that insurer will pay 80% of reasonable charges and that in no event will insurer pay more than 80% of PIP statute’s schedules of maximum charges, but also incorporating reasonableness analysis in definition section of policy provides clear and unambiguous notice of intent to limit reimbursement to permissive statutory fee schedule despite commingling payment methodologies
NEUROLOGY PARTNERS, P.A., d/b/a EMAS SPINE & BRAIN SPECIALISTS as assignee for Paola Harris, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County, Civil Division. Case No. 16-2015-SC-3825. Division CC-H. August 3, 2016. Kelly E. Eckley, Judge. Counsel: Adam Saben, Shuster & Saben, Jacksonville, for Plaintiff. Troy McRitchie, and Michael G. Rabinowitz, Banker Lopez Gassler, P.A., Plantation, for Defendant.
ORDER GRANTING DEFENDANT’S AMENDEDMOTION FOR SUMMARY JUDGMENTAND ORDER DENYING PLAINTIFF’SMOTION FOR SUMMARY JUDGMENT
THIS CAUSE came before the Court on Cross-Motions for Summary Judgment by Plaintiff and Defendant and a hearing was held June 21, 2016. The Court having reviewed the documents, evidence and heard oral arguments of counsel finds as follows:
In this suit seeking Personal Injury Protection (“PIP”) benefits, the Court is called upon to determine whether the Defendant made a clear and unambiguous election in its 9810A policy1 to limit PIP benefits for medical services based on the “schedule of maximum charges” as defined under section 627.736(5)(a)1 Fla. Stat. (2013). The parties stipulate that this is the only issue before this Court.
The standard for summary judgment is well known and need not be set forth at length. Moreover, the issue before the Court is not factual but deals with the legal interpretation of a contract. Since State Farm drafted the contract at issue, any ambiguities would be held against the Defendant. This is consistent with the well-known standard in summary judgment that issues be viewed in the light most favorable to the non-moving party.
Section 627.736, Florida Statutes (the “PIP Statute”) describes two separate and distinct payment methodologies for PIP benefits. The first is found in section 627.736(5)(a) Fla. Stat. (2013) and requires insurers to pay for PIP medical benefits rendered to the insured based on a fact-intensive analysis of the “reasonable” amount of the charges. This is the default methodology. See Allstate Fire & Casualty Ins. Co v. Stand-Up MRI of Tallahassee, P.A. 188 So. 3d. 1, 2 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D693b]. The second methodology is set for the in section 627.736(5)(a)1 and allows insurers to pay for PIP medical benefits at the ceiling of the “schedule of maximum charges” which includes 200% of the Medicare B fee schedule (as Defendant allowed in this suit). Id at 3. This is a permissive payment method.
PIP insurers must “clearly and unambiguously elect the permissive payment methodology in order to rely on it.” See Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147, 158 (Fla. 2013) [38 Fla. L. Weekly S517a]. The reason for this requirement is to give notice to the insured and in turn the PIP medical provider as to how much the insurer will pay.
This is one of many cases hinging on a legal determination of whether the subject insurance policy made a sufficient election to pay for medical services based on various Medicare fee schedules. See Fla. Stat. § 627.736(5)(a)2-5. Otherwise, payment determinations would revert to the “default” methodology utilizing a fact-intensive analysis of the “reasonable” amount of the charges. What constitutes a clear and unambiguous election has been molded by case law and statute. See Fla. Stat. § 627.736(5)(a)1.
Beginning in 2012, the Legislature amended Section (5)(a)5 of the PIP Statute to state:
Effective July 1, 2012, an insurer may limit payment [to the permissive method] only if the insurance policy includes a notice at the 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 of Insurance Regulation] satisfies this requirement.
What constitutes sufficient notice has been explicitly addressed by case law. In this Court, the First District’s decision in Stand-Up MRI controls — even if it is at odds with other decisions throughout the state. The Florida Supreme Court has scheduled oral arguments on this very important issue. However, until there is some clarification from our highest court, the Stand-Up MRI case controls this Court’s analysis and must be followed.
In Stand-Up MRI, the First District analyzed a policy with some similarities to the policy at issue in this case. In that case, the only language quoted from the policy at issue stated:
In accordance with the Florida Motor Vehicle No-Fault Law, [Allstate] will pay to or on behalf of the injured person the following benefits. . .
1. Medical Expenses
Eighty percent of reasonable expenses for medically necessary . . . services . . .
Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including but not limited to, all fee schedules.
Stand-Up MRI, 188 So. 3d at 2. The First District held that “the policy gives sufficient notice of its election to limit reimbursements by use of the fee schedule.” Id.
RELEVANT CONTRACTUAL LANGUAGE
The policy at issue in this lawsuit contains the following relevant language on page 16:
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:
a. For emergency transport and treatment by providers licensed under chapter 401, Florida Statutes, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, Florida Statutes, 75 percent of the hospital’s usual and customary charges.
c. For emergency services and care as defined by s. 395.002, Florida Statutes, provided in a facility licensed under chapter 395, Florida Statutes, 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.
DISCUSSION
Plaintiff properly concedes that the above-quoted section of the 9810A State Farm policy, standing alone, would constitute valid notice that State Farm was electing the Medicare fee schedule payment method. However, Plaintiff argues that the language in the definition section on page 5 of the policy incorporates the reasonableness analysis that is the default methodology. Thus, the payment methodologies from the PIP statute are commingled and there is not sufficient notice to impose the Medicare fee schedule methodology.
A substantial number of County Court Judges have agreed with this argument. I agree with the argument. The highest amount that the policy will pay is the Medicare fee schedule amount. However, the policy reserves the right to make a reasonableness challenge to any charges, services or expenses. No reasonable person reading the quoted language above could say that the policy chose the Medicare fee schedule methodology to the exclusion of the default “reasonableness” methodology. This would be the end of the story except for binding case law that the Court must follow.
However, Stand-Up MRI found that a policy provided sufficient notice of the Medicare fee schedule election with language that charges “shall be subject to any and all limitations, authorized by [the PIP laws] including but not limited to, all fee schedules.” Stand-Up MRI, 188 So. 3d at 2 (emphasis added).
In reading this language from Stand-Up MRI, the Court understands that fee schedules are one of the limitations of payment. However, the language also permits payments to be limited by the “reasonableness” methodology — that is certainly one of the “any and all limitations” in the PIP statute — as well as any other limitation contained in the PIP statute. If the language in Stand-Up MRI constitutes sufficient notice, the Court is hard-pressed to think of any policy that wouldn’t provide sufficient notice so long as there was some mention or reference to fee schedule. Here, State Farm’s policy did make a specific reference to the Medicare fee schedules right before it also reserved the right to use a reasonableness methodology.
Being bound by Stand-Up MRI, the Court will dutifully follow it. Although State Farm’s policy clearly commingles the payment methodologies in the PIP statute, it still provides sufficient notice to the policyholder of the Medicare fee schedule limitation based on binding precedent.
Accordingly, it is ORDERED and ADJUDGED:
1. Defendant’s Amended Motion for Summary Judgment and Supporting Memorandum of Law is hereby GRANTED.
2. Plaintiff’s Motion for Summary Judgment is hereby DENIED.
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1Introduced into evidence as Exhibit E in the Defendant’s Motion for Summary Judgment without objection.
