24 Fla. L. Weekly Supp. 253a
Online Reference: FLWSUPP 2403SIMIInsurance — Personal injury protection — Coverage — Medical expenses — Statutory fee schedules — Insurer did not clearly and unambiguously elect to limit reimbursement to statutory fee schedules where policy as a whole indicated that insurer could calculate reimbursement through either a fact dependent inquiry or through Medicare fee schedules — Safe harbor — Approval of policy by Office of Insurance Regulation does not satisfy requirement that policy provide unambiguous notice of intent to limit reimbursement to permissive statutory fee schedule
POMPANO SPINE CENTER as assignee for IFAUTANE SIMILIEN, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE 15-005621 (54). April 25, 2016. Nina Di Pietro, Judge. Counsel: Mac S. Phillips and Michael J. Fischetti, Fort Lauderdale, for Plaintiff. Michael S. Walsh, Fort Lauderdale, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PARTPLAINTIFF’S MOTION FOR RECONSIDERATION ORREHEARING AND ORDER DENYING DEFENDANT’SSECOND AMENDED MOTION FORFINAL SUMMARY JUDGMENT
THIS CAUSE having come before the Court regarding Plaintiff’s Motion for Reconsideration or Rehearing, the Court having reviewed the Motion, the entire Court file, and the relevant legal authorities; having made a thorough review of the matters filed of record; and having been sufficiently advised in the premises, the Court hereby Grants in part and Denies in part Plaintiff’s Motion for Reconsideration or Rehearing in that the Court Grants reconsideration and Denies rehearing. The Court further dispenses with oral argument, recedes from its February 18, 2016 Order Granting Defendant’s Second Amended Motion for Final Summary Judgment, and substitutes the following as the ruling of the Court:
The following material facts are undisputed: the patient in this case, Ifautane Similien, sustained injuries in an automobile accident on September 9, 2013; this patient was covered under a policy of insurance (State Farm Policy Form 9810A) issued by Defendant, State Farm Mutual Automobile Insurance Company (hereinafter “Defendant”); Pompano Spine Center (hereinafter “Plaintiff”) submitted bills to Defendant for services rendered to the patient from September 11, 2013 through January 8, 2014; and Defendant paid the claims at a rate that equals eighty (80) percent of the total allowable medical expenses calculated pursuant to the schedule of maximum charges set forth in §627.736(5)(a)(1) (2013). Therefore, the Court finds that there are no issues of material fact in dispute, and the matter is ripe for summary judgment.Florida Statutes §627.736(5)(a), §627.736(5)(a)(1),§627.736(5)(a)(5), and Controlling Case Law
The legal issue in this case is whether Defendant, through its policy of insurance, was permitted to limit reimbursement of Plaintiff’s claims pursuant to Florida Statute §627.736(5)(a)(1). Florida Statute §627.736(5)(a) provides guidelines for medical treatment providers to follow as it relates to the amounts they may charge for treatment provided to an insured patient when seeking personal injury protection benefits from the respective insurance company as an assignee of the insured. F.S. §627.736(5)(a) (2013). A medical treatment provider, “may charge the insurer and injured party only a reasonable amount pursuant to this section. . .” Id. This statute further provides guidance regarding what factors may be considered when an insurer makes the determination as to whether the medical provider’s submitted charge is reasonable. Id. Specifically, the statute states:
In determining whether a charge for a particular service, treatment, or otherwise is reasonable, 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 the service, treatment, or supply.
Id. Florida Statute §627.736(5)(a)(1) provides insurance companies with the ability to limit the reimbursement of reasonable charges to 80% of a schedule of maximum charges so long as the insurance policy involved contains language which clearly and unambiguously provides notice to the insured of the election of aforementioned statutory reimbursement limitation. Id. and F.S. §627.736(5)(a)(5) (2013).
In 2013, the Supreme Court of Florida issued its ruling in Geico General Insurance Company v. Virtual Imaging Services, Inc., (hereinafter “Virtual”), which details the history of the Florida No-Fault Law and the various amendments to the statute over the years through the 2012 amendments. 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]. Virtual held that a PIP insurer cannot take advantage of the Medicare fee schedules [one of the enumerated fee schedules contained within F.S. §627.736(5)(a)(1)] to limit reimbursements without notifying its insured by electing those fee schedules in its policy. Id. at 1601. Specifically, Virtual states:
We conclude that notice to the insured, through an election in the policy, is necessary because the PIP statute, section 627.736, requires the insurer to pay for “reasonable expenses. . . for medically necessary. . . services,” §627.736(1)(a) Fla. Stat., but merely permits the insurer to use the Medicare fee schedules as a basis for limiting reimbursements. . . In other words, the PIP statute provides that the Medicare fee schedules are one possible method of calculating reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate, but does not provide that they are the only method of doing so.
Virtual at 150. Virtual interpreted the statute, with reference to several district court decisions, as containing two methods to determine the reasonableness of a medical provider’s charges: one being the fact dependent inquiry discussed in the former §627.736(5)(a)(1) [currently numbered as §627.736(5)(a)]; and the other being by reference to the Medicare fee schedules discussed in the former §627.736(5)(a)(2) [currently numbered as §627.736(5)(a)(1)]. Id. at 156. Virtual’s holding makes it clear that the PIP statute affords insurers two different mechanisms for calculating reimbursements and that the insurer must clearly and unambiguously elect the permissive payment methodology [the former §627.736(5)(a)(2), currently numbered §627.736(5)(a)(1)] in order to rely on it to limit reimbursements. Id. at 158.
On August 19, 2015, the 4th District Court of Appeals (hereinafter “4th DCA”) published its ruling in the case of Orthopedic Specialists, as Assignee of Kelli Serridge v. Allstate Insurance Company, 177 So.3d 19 (Fla. 4th DCA 2015)[40 Fla. L. Weekly D1918a] (hereinafter “Serridge”). In Serridge, the 4th DCA was charged with reviewing an Allstate Insurance Company policy to determine whether the language in that policy was legally sufficient to authorize that insurer to apply the Medicare fee schedule reimbursement limitations set forth in §627.736(5)(a)(1). In coming to its ruling, the 4th DCA stated:
Virtual Imaging’s central holding is clear: To elect a payment limitation option, the PIP policy must do so “clearly and unambiguously.” A policy is not sufficient unless it plainly and obviously limits reimbursement to the fee schedules exclusively. . . The policy must make it inescapably discernable that it will not pay the “basic” statutorily required coverage and will instead substitute the Medicare fee schedules as the exclusive form of reimbursement.
Id. at 25-26.State Farm Policy Form 9810A
In this case, Defendant’s policy of insurance provides for “No-Fault Coverage” and states, “We will pay in accordance with the No-Fault Act properly billed and documented reasonable charges for bodily injury to an insured caused by an accident resulting from the ownership, maintenance, or use of a motor vehicle. . . .” State Farm Policy Form 9810A, page 4. The policy defines “reasonable charge” in the following manner:
Reasonable Charge, which includes reasonable expense, means an amount determined by us to be reasonable in accordance with the No-Fault Act, considering one or more of the following: 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 the 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.
State Farm Policy Form 9810A, page 5.
The policy further contains the following provisions regarding the “Limits” to the abovementioned coverage:
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.
However, if such services, supplies, or care is not reimbursable under Medicare Part B, as provided in this sub-subparagraph, then we will limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13, 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 workers’ compensation (Florida Rules of Procedure for Worker’s Compensation Adjudication) will not be reimbursed by us.
State Farm Policy Form 9810A, page 16.
Here, Defendant’s policy on page 5 defines the term “reasonable charge” as an amount determined by the insurer pursuant to all of the factors discussed in §627.736(5)(a), as well as the schedule of maximum charges. By doing so, the policy indicates that the Defendant has the option to calculate reimbursement through either the fact dependent inquiry or through the Medicare fee schedules. Then, on page 16 of the policy, Defendant states that it will limit maximum reimbursement by application of the Medicare fee schedules. With this language, the policy shifts to calculating reimbursement solely pursuant to §627.736(5)(a)(1)’s permissive payment methodology. Based upon Virtual and Serridge, in order for an insurer to limit reimbursement, a policy must clearly indicate that the Medicare fee schedules are the exclusive form of reimbursement. Since Defendant’s policy as a whole elects both methods of calculating reimbursement, and therefore does not inescapably discern that the Medicare fee schedules are the one and only method of calculating reimbursement, the policy language does not permit for Defendant to limit reimbursement pursuant to the schedule of maximum charges.
Office of Insurance Regulation Approval
The PIP statute contains a safe harbor provision for an insurer to rely on in order to limit payment pursuant to the Medicare fee schedules. F.S. §627.736(5)(a)(5) (2013). This portion of the statute states, “Effective July 1, 2012, an insurer may limit payment as authorized by this paragraph only if the policy includes a notice at the time of issuance or renewal that the insurer may limit payment to the schedule of charges specified in this paragraph. A policy form approved by the office satisfies this requirement.” Id. (emphasis added). Here, Defendant submitted its Form 9810A policy to “the office” [the Office of Insurance Regulation (hereinafter “OIR”)] and received the OIR’s approval to issue the policy in 2012. The Court agrees with, and incorporates into this Order, the persuasive and thorough analysis by both Hon. Eleni Derke and Hon. Robert W. Lee in the following decisions as it relates to the failings of the safe harbor provision in general and of the approval received by the OIR for Defendant’s Form 9810A policy: Theramed, LLC v. State Farm Mutual Automobile Ins. Co., Case No. 16-2015-SC-4069-MA (Duval Cty. Ct. Feb. 25, 2016) [23 Fla. L. Weekly Supp. 1038a]; and Pain and Injury Relief of Lake Worth v. State Farm Fire and Casualty Co., Case No. COCE15-2819 (53) (Broward Cty. Ct. Mar. 30, 2016) [23 Fla. L. Weekly Supp. 1087a], respectively.
Therefore, based upon all of the above, the Court finds that neither the Defendant’s policy language, nor Defendant’s reliance on the safe harbor provision, allowed Defendant to limit reimbursement of Plaintiff’s claims pursuant to Florida Statute §627.736(5)(a)(1).
ORDERED AND ADJUDGED that Defendant’s Motion for Final Summary Judgment is Denied.
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1Although Virtual’s opinion limits its holding to insurance policies in effect from the effective date of the 2008 amendments to the PIP statute through the effective date of the 2012 amendments, the Supreme Court of Florida’s interpretation of the language of F.S. §627.736(5)(a) and F.S. §627.736(5)(a)(1) [formerly F.S. §627.736(5)(a)(1) and F.S. §627.736(5)(a)(2)] is equally applicable here.
