24 Fla. L. Weekly Supp. 368a
Online Reference: FLWSUPP 2405MCDEInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy providing that insurer will pay 80% of reasonable expense but also providing that in no event will insurer pay more than 80% of No-Fault Act schedule of maximum charges does not provide clear and unambiguous notice of intent to limit reimbursement to permissive statutory fee schedule
ROY GOODMAN, D.C., P.A. d/b/a FLORIDA SPINE & WELLNESS GROUP as assignee of Paul McDermott, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 14-012525 COWE 81. May 27, 2016. Jane Fishman, Judge. Counsel: Cris Evan Boyar, Boyar and Freeman, P.A., Coral springs, for Plaintiff. Viraj A. Mehta, for Defendant.
ORDER DENYING DEFENDANT’S MOTION
FOR PARTIAL SUMMARY JUDGMENTTHIS CAUSE came before the Court on May 25, 2016 for hearing of the Defendant’s Motion for Partial Summary Judgment, and the Court’s having reviewed the Motion, the entire Court file, and the relevant legal authorities; having heard argument; having made a thorough review of the matters filed of record; and having been sufficiently advised in the premises, the Court finds as follows:
This case involves a relatively narrow issue: whether State Farm’s new PIP policy, form 9810A, complies with the requirements of Florida law to entitle it to limit its payment of PIP claims to the rate of 200% of Medicare. There are no issues of material fact in dispute, and the matter is ripe for Summary Judgment.
The Plaintiff filed suit to recover PIP benefits based on the Defendant’s failure to pay 80% of the billed amount. The Defendant filed an answer alleging one, and only one affirmative defense, that the “Plaintiff’s claim is barred based upon the IME/PEER review performed wherein the doctor opined that no further treatment after 4/28/14 would be reasonable, necessary or related.
The Defendant seeks a judicial finding, of an un-pled issue, as to whether the Defendant paid a reasonable amount of medical bills at issue pursuant to its policy of insurance with the Insured and Fla. Stat. §627.736. The Defendant filed a copy of the policy of insurance, the declaration page, and an Informational Memorandum OIR-12-02M issued on May 4, 2012, and the House of Representatives Final bill Analysis Bill # CS/CS/HB (Cs/CS/SB 1860).
The Defendant alleges, and the Court agrees, the interpretation of an insurance contract is a question of law to be determined by the court. Graber v. Clarendon, 819 So.2d 840, 842 (Fla. 4th DCA 2002) [27 Fla. L. Weekly D1158a].
The terms of the policy at issue specifically states:
We will pay in accordance of the No-Fault Act property billed and documented reasonable charges for bodily injuries to an insured caused by an accident resulting from the ownership, maintenance, or use of a motor vehicle as follows.”
The policy then states:
Medical Expenses — we will pay 80% of properly billed and documents medical expenses,. .
Medical Expenses is defined as:
Medical Expenses means reasonable charges incurred for medically necessary medical, surgical, X-Ray and rehabilitative services, including medically necessary
The Defendant’s policy then broadly defines reasonable charges. It states
Reasonable Charge, which includes reasonable expenses, 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.
Florida law does state a medical provider may only charge a reasonable amount. See F.S. §627.736(5)(a).
The Defendant argues it can then limit payment to 200% of medicare because of language found on pages 15-16 which states:
Limits
1. We will not pay any charge that the No-Fault Act does not require us to pay, or the amount of any charge that exceeds the amount the No-Fault Act allows to be charged.
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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:
***
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.
Therefore, the court must decide if the Defendant has properly elected the permissive Medicare fee schedules by providing the insured’s with reasonable notice of this election.
Conclusions of law:
The Court finds the Defendant has not made a clear election. The Defendant has placed the insured on notice that it will decide whether a charge is reasonable. The Defendant thereafter provided their insured with the factors it will consider. The Defendant will consider 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.
According to the PIP statute §627.736 the Defendant had a choice. It could elect from two methodologies. Orthopedic Specialists v. Allstate, 177 So.3d 19, 22 (Fla 4th DCA 2015) [40 Fla. L. Weekly D1918a]. The Defendant could have determined what is a reasonable charge for a medical service based on §627.736(5)(a) which allows a PIP insurer to consider 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.
In the alternative, the Defendant may elect the permissive methodology to limit reimbursement to 80 percent of the schedule of maximum charges found in §627.736(5)(a)(1). Orthopedic Specialists v. Allstate, 177 So.3d 19, 22 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a]. This is the permissive way for an insurer to calculate reimbursements to satisfy the PIP statute’s reasonable medical expense coverage mandate. GEICO v. Virtual Imaging Services, 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
Any limitation in a policy, to be enforceable, must be clearly and unambiguously drafted to achieve that result. GEICO v. Virtual Imaging Services, 141 So.3d 147, 157 (Fla. 2013) [38 Fla. L. Weekly S517a]; Orthopedic Specialists v. Allstate, 177 So.3d 19, 23 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a]. If the Defendant intended to elect the permissive payment methodology it must clearly and unambiguously notify its insureds. GEICO v. Virtual Imaging Services, 141 So.3d 147, 158 and 160 (Fla. 2013) [38 Fla. L. Weekly S517a].
Clarity and SPECIFICITY is required under insurance statutes. Orthopedic Specialists v. Allstate, 177 So.3d 19, 26 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a]. Here, State Farm has improperly selected both methodologies.
A clear and unambiguous election and notification is critical because an insurer that makes this election would preclude the provider from balance billing its patients. §627.736(5)(a)(4). Additionally, if an insurer makes this election the insurer would not be precluded from using medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, to determine the appropriate amount of reimbursement for medical services, supplies, or care if the coding policy or payment methodology does not constitute a utilization limit. §627.736(5)(a)(3). The Defendant attempts to use this method in paragraph 7 in its factors to consider when determining what is reasonable as well as the schedule of maximum charges in the No-Fault Act in paragraph 5.
The Plaintiff argues and the Court agrees the Defendant cannot, as it is doing in this policy, elect both methodologies. These two positions are inconsistent. State Farm’s policy language yields only uncertainty because it commingles two separate and distinct payment calculation methods in a single policy. The court will interpret the policy, drafted by the Defendant, in favor of the insured and against the drafter. Discover Prop v. Beach Cars of West Palm, 929 So.2d 729, 732 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D1499a].
For State Farm to be allowed to pick and chose which methodology it would like to use, after a claim is made, would render the ruling in GEICO v. Virtual Imaging Services, 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a] meaningless. Orthopedic Specialists v. Allstate, 177 So.3d 19, 25 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a].
In Pain and Injury Relief v. State Farm, 23 Fla. L. Weekly Supp. 1087a (Fla. Broward County Court 2016) Judge Lee, when addressing this same exact policy, opined:
Clearly, State Farm is attempting to have its cake and eat it too. It is attempting to leave itself the option of choosing a reasonableness option when it is to its advantage, or choosing the 200% Medicare methodology if this option would result in a lower reimbursement. Under the case law interpreting the “two methodology” provision of the PIP statute, an insurer cannot do this. It must “elect” the “option” in a “clear and unambiguous” manner in its policy. State Farm did not do so.
This court agrees with Judge Lee as well as the well reasoned decisions entered in the cases of Theramed, LLC v. State Farm Mutual Automobile Ins. Co., Order Denying Defendant’s Motion for Summary Judgment and Granting Plaintiff’s Motion for Summary Judgment, 23 Fla. L. Weekly Supp. 1038a (Duval Cty. Ct. Feb. 25, 2016) (Derke, J.); and Florida Emergency Physicians Kang & Associates, M.D., P.A. v. State Farm Mutual Automobile Ins. Co., Order Granting Plaintiff’s Motion for Final Summary Judgment and Denying Defendant’s Amended Motion to Final Summary Judgment, Case No. 2014-SC-9502-O (Orange Cty. Ct. Feb. 10, 2016) [23 Fla. L. Weekly Supp. 1052a] (Jewett, J.); DNA Center v. State Farm, 23 Fla. L. Weekly Supp. 1043a (Fla. Volusia County Court 2016) Pompano Spine v. State Farm, 15-005621 (54)(FIa. Broward Cty Court 2016, Judge Zaccor) [24 Fla. L. Weekly Supp. 253a]; Niles Lestrange v. State Farm, 15-012098 (80)(Fla. Broward Cty Court 2016, Judge Levine); Central Palm Beach v. State Farm, 15-001696 CONO 73 (Fla. Broward Cty Court 2016, Judge DeLuca) [24 Fla. L. Weekly Supp. 174a]; Ceda Health v. State Farm, 14-005314 (54)(Fla. Broward Cty Court 2016, Judge Zaccor) [24 Fla. L. Weekly Supp. 81a]; Argyle Chiro v. State Farm,16-2015-SC-157 MA(CC-M) (Fla. Duval Cty Court 2016); Ceda Health v. State Farm, 14-1787 CC 25 (Fla. Miami Dade Cty Court 2016); Ceda Orthopedics v. State Farm, 23 Fla. L. Weekly Supp. 565a (Fla. Miami Dade Cty Court 2016); Crespo v. State Farm, 23 Fla. L. Weekly Supp. 982b (Fla. Hillsborough Cty Court 2016); DNA Center v. State Farm, 23 Fla. L. Weekly Supp. 1043a (Fla. Volusia Cty Court 2016); First Coast v. State Farm, 23 Fla. L. Weekly Supp. 943a (Fla. Duval Cty Court 2016); Migdal v. State Farm, 5020144SC011182XXXXSBRD (Fla. Palm Beach Cty Court 2016, Colrew); Neurology Partners v. State Farm, 16-2015-SC1816-MA (Fla. Duval Cty Court 2016); Neurology Partners v. State Farm, 23 Fla. L. Weekly Supp. 55a (Fla. Duval Cty Court 2016); Neurology Partners v. State Farm, 23 Fla. L. Weekly Supp. 833a (Fla. Duval Cty Court 2016); New Life Medical v. State Farm, 14-05263SP05 (Fla. Miami-Dade Cty Court 2016); Quality Medical v. State Farm, 23 Fla. L. Weekly Supp. 853a (Fla. Miami Dade Cty Court Court 2016); Rembrandt Mobile v. State Farm, 15-1657 SP 24 (Fla. Miami Dade Cty Court 2016); Thompson v. State Farm, 14-12640 SP 05 (01)(Fla. Miami Dade Cty Court 2016).
Therefore, based upon all of the above, including the Defendant’s failure to allege this as an affirmative defense, the Court finds neither the Defendant’s policy language nor the argument that the OIR approval would permit the Defendant to use §627.736(5)(a)(1) as the exclusive methodology of payment and denies the Defendant’s Motion. The Defendant had a choice as to which methodology it would use to determine whether a charge is a reasonable The Defendant impermissibly choose both. The Defendant is precluded from arguing to the jury it had the option to pay claims based on §627.736(5)(a)(1).
