23 Fla. L. Weekly Supp. 853a
Online Reference: FLWSUPP 2308MURPInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy that includes fact-dependent factors in one policy endorsement and tracks Office of Insurance Regulation’s sample fee schedule endorsement language in second conjunctive endorsement commingles payment methodologies and does not provide clear and unambiguous notice of intent to limit reimbursement to fee schedule
QUALITY MEDICAL GROUP, INC. A/A/O CHRISTLE MURPHY (“QUALITY MEDICAL”), Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (“STATE FARM”), Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 14-3904 SP 05 (04). December 3, 2015. Lourdes Simon, Judge. Counsel: Adam Saben, Shuster & Saben, Jacksonville, for Plaintiff. Carlos Carmona, Bronstein & Carmona, P.A., for Defendant.
ORDER DENYING DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT
THIS MATTER comes before this Court for hearing on September 30, 2015 on Defendant’s Motion for Summary Judgment as to “Reasonable Payments Made”. This Court, having reviewed the Court file and having heard argument of counsel and being otherwise advised in the premises finds as follows:
1. The Plaintiff submitted bills for medical services rendered to the assignor arising from a motor vehicle accident that occurred on December 13, 2012. The Defendant paid said bills pursuant to the “permissive payment” methodology in F.S. 627.736(5)(a)2 (2007). Plaintiff’s position is that the Defendant failed to properly amend its 8107 policy and, therefore, cannot avail itself of the “permissive payment” methodology and must reimburse the Plaintiff at 80% of the submitted reasonable charges. The operative endorsement is the “6910.3” endorsement as well as the “6126LS Amendatory Endorsement”, both of which were submitted by the Defendant for review by the Court without objection.
2. The Florida Supreme Court in Geico v. Virtual Imaging Services, 141 So.3d 147 (2013) [38 Fla. L. Weekly S517a] explained that there are two different payment methodologies for reimbursement of PIP claims for submitted medical expenses. The first “default” payment methodology, found in F.S. 627(5)(a)1 (2007) is a “fact-dependent inquiry determined by consideration of various factors”1. The second payment methodology, found in F.S. 627.736(5)(a)2 (2007) relies on a mere application of the “schedule of maximum charges” to the charge submitted for a particular service or supply. However, in order to avail itself of the option in F.S. 627.736(5)(a)2, the insurer must provide notice in its policy of its election to use the fee schedules”. Virtual, at 159. The notice must be in language that is clear and unequivocal.
3. On page 3 of its “6910.3” endorsement, State Farm amends its original “8107” policy by advising, in pertinent part:
“What we pay is changed to read:
1. Medical Expenses, 80% of all reasonable expenses incurred for:
a. Medically necessary medical, surgical, dental [services].”
The policy then goes on to state:
“To determine whether a charge is reasonable, we may consider usual and customary charges and payments accepted by the provider, reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.”
The above factors in State Farm’s policy endorsement essentially track the factors listed in the “default” payment methodology.
4. The Court next reviews endorsement 6126LS, which essentially tracks the language in the “Sample Fee Schedule Endorsement” published by the Office of Insurance Regulation (“OIR”) in its Informational Memorandum issued May 4, 2012.2 Although the OIR sample endorsement may contain the requisite language to constitute a proper election for the permissive payment methodology, the Court must review the policy at issue, “as a whole, endeavoring to give every provision its full meaning and operative effect” See, Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla. 2000) [25 Fla. L. Weekly S211a]3.
5. Looking at the State Farm 6126LS Amendatory Endorsement, the introductory language states:
“No-Fault — Coverage P
The following is added to No-Fault coverage P:”
State Farm Amendatory Endorsement, page 1 of 1 (emphasis added).
The Court finds the language “is added” (in the introductory sentence to the 6126LS endorsement) to be conjunctive, not amendatory. That is, the choice by the Defendant to use the words “is added” suggests that the Defendant affirmatively opted to have the 6126LS policy endorsement and the 6910.3 policy endorsement read together. Amendment 6910.3 clearly shows an intent to rely on the “default methodology”, and, therefore, when read as a whole, there is a failure to make a “clear and unequivocal election” to employ the “permissive payment” methodology, as required by Virtual.
6. The apparent intent of the Defendant to have the two amendments (6910.3 and 6126LS) to be read in conjunction is further evidenced by the subject policy containing other provisions that are clearly amendatory in nature. For example, in its original 8107 policy, on page 13, State Farm discusses “Disputes Regarding Charges for Treatment of Injured Persons.” However, in its 6127HH endorsement, this section is “deleted”. Also, in its 6910.3 endorsement, on page 3, State Farm writes that “The first paragraph of No-Fault Coverage P is “replaced” by the following. . . :”. There are other references between the original policy and its endorsements where State Farm clearly chose its language to state substitution and not addition; Amendatory Endorsement 6126LS is not one of them.
7. Finally, State Farm relies on Allstate Fire and Casualty Insurance v. Stand-Up MRI of Tallahassee, 2015 WL 1223701 Fla. 1st DCA (Opinion of March 18, 2015) [40 Fla. L. Weekly D693b]. In Stand-Up MRI, the First DCA found the policy language on an Allstate policy places the insured on notice that Allstate was going to pay pursuant to the permissive payment methodology. However, the First DCA found that Allstate properly placed its insured on notice with a “plain statement that reimbursements shall be subject to the limitations in F.S. 627.736, including all fee schedules”. Unlike the Allstate policy in Stand-Up MRI, the State Farm 8107 policy, 6910.3 endorsement, and 6126LS amendatory endorsement, when read as a whole, includes language that commingles the “default” and “permissive” payment methodologies. Therefore, Defendant’s Motion for Summary Judgment is DENIED.
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1These factors include: charges and payments accepted by the provider, reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply. F.S. 627.736(5)(a)1(2007).
2Exhibit “C” introduced by the Defendant without objection.
3As cited in the Defendant’s Motion for Summary Judgment, page 3, filed September 12, 2014.
