23 Fla. L. Weekly Supp. 707a
Online Reference: FLWSUPP 2307CHRIInsurance — Personal injury protection — Deductible — Proper formula for payment of PIP claim under policy that elects usage of permissive statutory fee schedule requires that insurer determine reasonable expense per statutory fee schedule, apply deductible to that reasonable expense, and pay 80% of that amount
PROGRESSIVE AMERICAN INSURANCE COMPANY, Appellant, vs. MUNROE REGIONAL HEALTH SYSTEM, INC. d/b/a MUNROE REGIONAL MEDICAL CENTER a/a/o Kayla Christopher, Appellee. Circuit Court, 18th Judicial Circuit (Appellate) in and for Seminole County. Case No. 14-11-AP. Consolidated With 14-13-AP & 14-14-AP. April 17, 2015. Appeal from the County Court for Seminole County, Honorable Carmine Bravo, County Court Judge. Counsel: Douglas H. Stein, for Appellant. Thomas A. Player, for Appellee.
(RECKSIEDLER, Judge.) THIS CAUSE comes before the Court on appeal from a Final Judgment rendered in the lower tribunal. This Court dispenses with oral argument pursuant to Fla. R. App. P. 9.320.BACKGROUND
This case arises out of claims filed by Munroe Regional Health System, Inc. (Munroe or Appellee), alleging that Progressive American Insurance Company (Progressive or Appellant) failed to pay Personal Injury Protection (PIP) benefits under policies issued to Kayla Christopher (Case No. 14-11-AP), Edwin Lugo (Case No. 14-13-AP), and Victor Etherington (Case No. 14-14-AP). This case consolidates these three cases as they involve identical issues.
Each of the insureds was involved in a motor vehicle accident and received treatment from Munroe. Munroe subsequently filed claims with Progressive as assignee of the policies. The policies at issue have $1000 deductibles as well as endorsements allowing Progressive to reimburse medical bills pursuant to section 627.736(5)(a)2.b, Florida Statutes.1 Munroe alleged in its Complaint that Progressive improperly applied the deductible after reducing each bill to the statutory schedule of charges. Progressive argued that it had properly reduced the bills pursuant to the fee schedule in § 627.736(5)(a)2.b, applied the deductible, and then paid 80% of that amount. Progressive filed a Motion for Final Summary Judgment, and Munroe filed its own competing Motion for Final Summary Judgment on the same issue.
After hearing, the trial court granted Munroe’s Motion for Summary Judgment and denied Progressive’s motion, holding that section 627.736, Florida Statutes required that the deductible first be applied to the total bill, and the insurer may then adjust the payment accordingly. Final Judgment was entered on February 4, 2014, and Progressive appealed.STANDARD OF REVIEW
A trial court’s ruling on a motion for summary judgment is reviewed de novo. Volusia Cty v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) [25 Fla. L. Weekly S390a]. Similarly, statutory interpretation is a pure legal matter subject to a de novo standard of review. Kephart v. Hadi, 932 So. 2d 1086, 1089 (Fla. 2006) [31 Fla. L. Weekly S375a].
ANALYSIS
This case addresses the interplay of sections 627.739(2) and 627.736, Florida Statutes and the proper order for application of the deductible and fee schedule when calculating payments to providers. This Court addressed this issue in Garrison Property & Casualty Insurance Company v. New Smyrna Imaging, LLC, Case No. 13-03-AP (Fla. 18th Circ. Ct., App. Div., Feb. 9, 2015). As discussed in Garrison, prior to 2003, a deductible was “to be deducted from the benefits otherwise due each person subject to the deduction.” § 627.739, Fla. Stat. (1999). However, the post-2003 version of § 627.739(2), mandates that “[t]he deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736.” § 627.739, Fla. Stat. (2003). Thus, as an initial step, the insurer must first determine what are the “expenses and losses described in s. 627.736,” in order to apply the deductible to 100 percent of those expenses and losses. Section 627.736 contains several references to expenses, almost all of which are described as or used in the context of reasonable expenses or expenses “covered by the policy.” § 627.736(1)(a), (1)(b), (4), & (6)(b), Fla. Stat. Thus, when read together, § 627.739 and § 627.736 require that a PIP deductible be applied to 100 percent of the reasonable and necessary medical expenses, or those expenses covered by the policy.
In GEICO Gen. Ins. Co. v. Virtual Imaging Svcs., Inc., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a], the Florida Supreme Court explained that § 627.736 provides two means for determining what is a reasonable and necessary medical expense. Section 627.736(5)(a) sets forth several factors that may be considered in determining the reasonableness of medical expenses. Alternately, under § 627.736(5)(a)1 (previously (5)(a)2), the Legislature provided that “[t]he insurer may limit reimbursement to 80 percent of [a defined] schedule of maximum charges.” In order to pay in accordance with this fee schedule limitation, the insurer must clearly and unambiguously select that payment methodology such that the insured and medical providers are aware of it. GEICO, 141 So. 3d at 160.
As this Court noted in Garrison, nothing in the plain language of § 627.739 would appear to require that the deductible be applied differently depending on which method is chosen for determining the reasonableness of the expenses to which it is applied. Therefore, if the insurer has clearly stated its intention to use the fee schedule, the deductible can be applied to 100 percent of the reasonable expenses found in the fee schedule, as referenced in § 627.736.
In the case at hand, the policy at issue contained a proper endorsement allowing Progressive to utilize the fee schedule. In calculating the payment owed to Munroe, Progressive determined the reasonable expense, as per the fee schedule, applied the deductible to that amount, reduced it to the allowed 80%, and paid that sum to Munroe. This Court finds that this was in agreement with the statutory interpretation outlined above.2
Because Progressive properly applied the deductible, the Order Granting Plaintiff’s Motion for Summary Judgment and Denying Defendant’s Motion for Summary Judgment is reversed and the matter is remanded to the trial court for further proceedings consistent with this opinion.
Appellant’s Motion for Attorney’s Fees Pursuant to Proposal for Settlement, under Fla. R. App. P. 9.400(b) and §768.79, Fla. Stat., is remanded to the trial court for hearing as to both entitlement and amount of award, if any. Appellee’s Motion for Appellate Attorney’s Fees is denied.
REVERSED and REMANDED.
__________________
1Section 627.736(5)(a)2.b has subsequently been renumbered as § 627.736(5)(a)1.b. However, this Court refers to the section title as referenced in the trial court record and party briefs.
2As the trial court noted, because Progressive utilized the alternative mechanism for determining reasonableness under § 627.736, the reasonableness of Munroe’s bills is not at issue in this case.
