24 Fla. L. Weekly Supp. 980b
Online Reference: FLWSUPP 2411MERRInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy that states that insurer will limit reimbursement to 80% of properly billed reasonable charge but in no event will pay more than 80% of schedule of maximum charges provided legally sufficient notice of intent to limit reimbursement to statutory fee schedule
RICHARD W. MERRITT, D.C., P.A. (assignee of Gladys Medina) Plaintiff, v. TRAVELERS HOME AND MARINE INSURANCE COMPANY, Defendant. County Court, 10th Judicial Circuit in and for Polk County. Case No. 2015SC-006296. December 7, 2016. Susan L. Barber, Judge. Counsel: Christopher Kasper, for Plaintiff. David B. Kampf and Sarah Sorgie, for Defendant.
ORDER GRANTING DEFENDANT’S MOTION FORPARTIAL SUMMARY JUDGMENT BASEDON POLICY LANGUAGE
This matter was before the court on Defendant’s Motion for Partial Summary Judgment based upon Policy Language. As this is a small claims action, the court treats the Motion as a Motion for Summary Disposition. Defendant (hereinafter “Travelers”) asserts that its subject insurance policy permits Travelers to limit reimbursement for medical services based on the application of the fee schedules set forth in Section 627.736, Florida Statutes, and that its policy properly provides notice to the insured of its election to use the fee schedules. Plaintiff asserts that the Travelers policy does not provide sufficient notice to the insured of Travelers’ election to use the fee schedules and as such, the fee schedules cannot properly be used to limit reimbursement for medical services provided. The court considered the motion, argument of counsel, case law presented, and makes the following findings:
1. This lawsuit arises out of Personal Injury Protection (“PIP”) Benefits which are alleged to be due and owing. Plaintiff is a medical provider who is an assignee of an individual insured by Travelers.
2. According to the complaint, on or about September 13, 2014, Gladys Medina was in a motor vehicle accident. She alleged injuries and secured medical treatment from the Plaintiff herein.
3. The motor vehicle accident in question was determined to be a covered loss under the subject policy issued by Travelers.
4. Gladys Medina executed an assignment of benefits to Plaintiff, her medical service provider. The assignment permitted Plaintiff to bill and receive payment directly from Travelers for the services rendered to Gladys Medina.
5. Thereafter, Plaintiff submitted a claim to Travelers for PIP benefits. Travelers paid PIP benefits, but not in the amounts sought by Plaintiff.
6. Plaintiff sued Travelers for breach of contract, alleging that Travelers failed to pay the full amount of benefits required by the insurance policy and by Florida Statute 627.736. Plaintiff argues that under section 627.736(1), Florida Statutes, Travelers should have paid eighty percent of the billed amounts, and thus still owes Plaintiff $1,472.25. Travelers argues that it correctly paid Plaintiff under the alternate fee schedule provisions of section 627.736(5)(a)(2)(f) and its policy, and therefore, no breach of contract occurred herein.
7. The Florida Supreme Court explained in Geico General Insurance Co. v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a], two distinct methodologies in section 627.736, Florida Statutes for an insurer to pay a reasonable charge for medical services. One method is a fact-based inquiry to determine reasonableness under section 627.736(5)(a)(1), and a second method utilizes Medicare fee schedules to “predetermine” a reasonable reimbursement for medical services, as detailed in section 627.736(5)(a)(2). As held in Virtual Imaging, in order to use the fee schedules to limit reimbursement for medical services, insurers must first give notice to their insured within the insurance policy. “The insurer cannot take advantage of the Medicare fee schedules to limit reimbursement without notifying its insured by electing those fee schedules in its policy.” See id. at 158-159.
8. The issue for resolution by this court is whether Travelers’ insurance policy language permitted Travelers to limit reimbursement for medical services according to the Medicare fee schedule of maximum charges described in section 627.736(5)(a)(2)(a)-(f), Florida Statutes.
9. Plaintiff argues that the pertinent language in the Travelers insurance policy is similar to language in insurance policies issued by State Farm, which has been determined by a number of courts around the state of Florida to be deficient in providing the required notice. The State Farm policy language is not “of record” herein; however, this court has been provided a plethora of case law for review which sufficiently details the pertinent language in the State Farm policies. Apparently, the concern by many courts about the State Farm policy language is that in its definition of “Reasonable Charge”, State Farm includes the fee schedule as one of its factors in determining reasonableness. In other words, State Farm’s definition of “reasonable charge” intermingles the characteristics of both a “reasonableness” methodology and “fee schedule” methodology. Courts have opined that State Farm can’t leave the choice “in limbo”. State Farm must select one of the two methods — either fact-based inquiry to determine reasonableness or utilization of the fee schedules as a “predetermination” of reasonableness — not both, in providing reimbursement for medical services. Thus, many courts have found that the State Farm policy language is deficient in providing the required notice of the election to use the fee schedules. See Pain and Injury Relief of Lake Worth v. State Farm Fire and Casualty Company, 23 Fla. L. Weekly Supp. 1087a (Broward Cty Ct. March 30, 2016) as but one example.
10. Travelers, on the other hand, urges the court to consider the notice provisions of an Allstate policy on review by the Second District Court of Appeal in Allstate Indemnity Company v. Markley Chiropractic & Acupuncture, LLC, __ So.3d __, 41 Fla. L. Weekly D793b (Fla. 2d DCA Mar. 30, 2016). In Markley, the District Court found the following policy language of an Allstate policy provided sufficient notice of its election to use statutory fee schedules in determining reimbursement of medical expenses:
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. Id.
Travelers argues that its policy language provides even clearer notice than the Allstate language reviewed in Markley, and as such, the decision in Markley is controlling upon this court.1
11. The terms of the Travelers policy at issue herein (including within the Declarations page) provide in relevant part:
Use of Medical Fee Schedule for Personal Injury Protection Claims:
We will limit reimbursement of medical expenses to 80 percent of a properly billed reasonable charge, but in no event will we pay more than 80 percent of the following schedule of maximum charges:
——
(f) For all other medical services, supplies and care, 200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.
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NOTICE: We limit payment under Personal Injury Protection to the schedule of charges specified in Florida Statutes, section 627.736. This includes determining the amount we will pay using all fee schedules, as well as all other payment limitations, identified in that statute.
12. The Travelers policy specifically and unambiguously states that Travelers will limit reimbursement based upon application of all fee schedules. Indeed, the policy language unequivocally provides notice that the schedule of maximum charges as outlined within the fee schedules will serve as an upper limit for calculations of reimbursements of bills for medical services. Thus, this court finds that the Defendant, Travelers, provided legally sufficient notice of its intent to use the schedule of maximum charges set forth in the PIP statute to make payment for billed medical services provided on behalf of Gladys Medina.
Accordingly, it is hereby
ORDERED AND ADJUDGED:
The Defendant’s Motion for Partial Summary Judgment (Disposition) based upon Policy Language is GRANTED.
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1This court notes that the Allstate policy language in question is before the Supreme Court of Florida on a certified conflict between the District Courts of Appeal.
