24 Fla. L. Weekly Supp. 383a

Online Reference: FLWSUPP 2405BARDInsurance — Personal injury protection — Deductible — PIP insurer improperly applied statutory fee schedule to reduce bills before applying those bills to deductible — Pursuant to both PIP statute and policy terms, fee schedule may only be applied to bills for which benefits are actually paid — Question certified: Pursuant to Fla. Stat. §627.739, is an insurer required to apply the deductible to 100% of an insured’s expenses and losses prior to applying any permissive fee schedule payment limitation found in §627.736(5)(a)1, Fla. Stat. (2013)?

CARE WELLNESS CENTER, LLC, (a/a/o Virginia Bardon-Diaz), Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 14-07576 CONO (70). May 12, 2016. John D. Fry, Judge.

REVERSED. 43 Fla. L. Weekly D573a (State Farm Mutual Ins. Co. v. Care Wellness Center, 4D16-2254, 03-14-2018)

DCA opinion subsequently DISAPPROVED. 44 Fla. L. Weekly S59a (Progressive Select Ins. Co. v. Florida Hospital Medical Center, SC18-278, 12-28-2018)

AMENDED ORDER GRANTING PLAINTIFFFINAL SUMMARY JUDGMENT[Original Opinion at 23 Fla. L. Weekly Supp. 985a]

THIS CAUSE came before the Court on November 30, 2015 on Plaintiff’s Motion for Summary Judgment directed at Count I of Plaintiff’s Amended Complaint which concerned Plaintiff’s request for declaratory judgment and Defendant’s cross-motion for Summary Judgment. The Court issued an order on January 6, 2016. As this Court is certifying a question of great public importance, in order to strictly comply with Fla. R. App. P. 9.160, the Court wholesale adopts its January 6, 2016 order Granting Plaintiff’s Motion for Summary Judgment and Denying Defendant’s Motion for Summary Judgment and finds as follows:

On June 30, 2013, Virginia Bardon-Diaz (“the injured insured”) was injured in a motor vehicle accident. She was covered by a policy of insurance issued by Defendant that had a limit of $10,000 in No-Fault (“PIP”) benefits with an elected $1,000 deductible. Solely for purposes of this motion, Defendant’s election of the fee schedules as a reimbursement methodology was not challenged by Plaintiff. Following the motor vehicle accident, the injured insured treated at various medical providers. Specifically, Defendant was billed $1427 for medical services by three providers prior to its receipt of Plaintiff’s first bill. Defendant reduced the bills of these three providers according to the fee schedules contained in §627.736(5)(a)1, Fla. Stat. (2013) and applied the reduced amount of $567.36 to the deductible. Thereafter, Defendant received bills from Plaintiff in the total amount of $385 for dates of service July 15, 2013 and July 17, 2013. Defendant reduced these amounts to the fee schedule rate of $258.60 and then applied the entire reduced amount to the deductible. Although the injured insured was billed $1,812 at this point, Defendant still considered the deductible unsatisfied. The Court finds these facts are not in dispute. Indeed, both parties rely on these facts in their respective motions.

The dispute described in Count I of Plaintiff’s motion is a request for declaratory judgment pursuant to ch. 86, Fla. Stat. concerning a pure legal question of whether it was appropriate for the Defendant to make fee schedule reductions to bills that are applied to the deductible. Plaintiff seeks a declaration that both the policy and relevant statutes limit the applicability of the fee schedules to bills that are actually reimbursed, that the injured insured’s deductible should have been completely satisfied prior to receipt of Plaintiff’s first bill, and that Defendant erred by failing to reimburse Plaintiff’s July 15 and July 17 bills. Defendant’s position, in summary, is that since the policy of insurance permits it to reimburse providers in accordance with the fee schedules, it may reduce all bills (including those falling under the deductible or outside of policy limits) to the fee schedule rates. The Court agrees with Plaintiff’s position. The Court finds that neither the statutes nor the policy permit Defendant to make fee schedule reductions to bills that are applied to the deductible. The Court further finds that the deductible was completely satisfied prior to receipt of Plaintiff’s bills and that Defendant was required to pay Plaintiff’s bills for dates of service July 15 and July 17.The Statutes

This Court is required to enforce the plain meaning of an unambiguous statute. See Shelby Mut. Ins. Co. v. Smith, 556 So. 2d 393 (Fla. 1990). The Court finds the relevant statutory provisions unambiguous. The crucial terms are defined within the statute. The court cannot find ambiguities within the statutory definitions as the statutes utilize words in conformity with dictionary definitions.

The Court begins its analysis with the mandated methodology for applying a medical provider’s bills to a deductible which is provided by the legislature in §627.739(2), Fla. Stat. (2013) (the “Deductible Statute”). The statute states, in pertinent part:

The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1). (Emphasis Added).

This section leaves no room for an insurer’s discretion. Defendant’s position rests on a misinterpretation of several terms. Defendant inappropriately conflates the meaning of the terms “expenses” and “losses” with the term “benefits”. These terms possess specific meanings within the No-Fault statutory scheme. “Expenses” are bills “for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services”. See §627.736(1)(a), Fla. Stat. This definition comes from the No-Fault statute and is in harmony with the dictionary definition of this term. See Black’s Law Dictionary (which defines the term “Medical Expense”, in pertinent part, as “[i]n civil litigation, any one of many possible medical costs that the plaintiff has sustained. . .including charges for visits to physician’s offices, medical procedures, hospital bills, medicine. . .” [Emphasis Added]). “Losses” pertain to lost wages and are described in §627.736(1)(b) but appear to be inapplicable to the case sub judice. “Benefits”, as defined in both the statute and the dictionary, are amounts for which the insurer is liable for payment. See also Untied States Sec. Ins. Co. v. Silva, 693 So.2d 593 (Fla. 3d DCA 1997) [22 Fla. L. Weekly D507a] (“. . .the word ‘benefits’ as used in the statute, and in the insurance contract herein, means payments, and not medical treatment. . .”). Similarly, the Court finds that the No-Fault statute clearly states that fee schedule reductions only come into play when the insurer is actually paying a provider’s bills. The statute uses the specific language that “[t]he insurer may limit reimbursement”. §627.736(5)(a)1, Fla. Stat. (2013). There is no statutory language that would expand the role of the fee schedules outside of the occurrence of an insurer actually reimbursing a medical bill. In this case, it is indisputable that the Defendant did not reimburse the bills in question and accordingly, the Court finds that Defendant’s fee schedule reductions were inappropriate.

Plaintiff’s interpretation also harmonizes with the plain meaning of §627.736(5)(a)4., Fla. Stat (2013). This subsection creates a balance billing limitation on providers when an insurance policy elects the fee schedule reimbursement methodology. However, the legislature specifically excluded coinsurance amounts and amounts outside of maximum policy limits from fee schedule reductions. Bills that are applied to the deductible do not fall within the $10,000 policy benefits. Accordingly, the Court finds that only bills that fall within the $10,000 (i.e. the bills or charges that are actually paid by an insurer) may be reduced when an insurance policy clearly and unambiguously elects the fee schedule methodology to the exclusion of the “fact based” methodology.

Even if this Court found ambiguity somewhere in these statutes, such an ambiguity would allow the Court to consider factors that would nevertheless resolve this issue in Plaintiff’s favor. Among the many tools a court may utilize in interpreting ambiguous legislation, a court may consider the history of legislative changes. See, e.g., League of Women Voters of Fla. v. Detzner, 172 So.3d 363 (Fla. 2015) [40 Fla. L. Weekly S432a]. In 2003, the Legislature amended the deductible statute by eliminating the $2,000 deductible, ensuring the full $10,000 in benefits was available to insureds, and modifying the calculation methodology governing bills being applied to the deductible from “benefits otherwise due” to “100% of expenses and losses”. The former statute’s “benefits otherwise due” methodology allowed insurers to reduce bills prior to applying the bills to the deductible. The Court finds that the 2003 amendments were intended to reduce the threshold for an insurer’s responsibility and provide insureds with the opportunity to utilize the full policy bargained for. Further, the shift from focusing on “benefits otherwise due” to “expenses and losses” tilted the scales of balance in deductible issues in favor of the insured as the net effect of the statutory modification was to allow an insured to satisfy the deductible more rapidly. The removal of the $2,000 deductible option further evidences the legislature’s concern that the bar was set too high for an insured to enjoy the benefits of the insurance policy. The Court finds that Defendant’s position would require ignoring these legislative changes and would amount to a reversion to the pre-2003 deductible statute. Moreover, while the legislature specifically eliminated deductibles greater than $1,000, Defendant’s position in this case would require this Court to ratify an interpretation that would permit an insurer to force an insured to shoulder a deductible burden in excess of the limits imposed by the legislature.

Defendant attempts to take refuge in General Star Indemnity Co. v. West Florida Willae Inn, Inc., 874 So.2d 26 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D348a], however it has severely misinterpreted the holding of this case and it has limited applicability to a statutory insurance case. See Flores v. Allstate Ins. Co., 819 So. 2d 740 (Fla. 2002) [27 Fla. L. Weekly S499a]. General Star stands generally for the proposition that non-covered losses should not be applied to the deductible which is an issue that is wholly irrelevant to the case sub judice. General Star involved a pure contractual property claim where an insured sought to have a specifically excluded loss be applied to the deductible. When types of loss are wholly excluded, they, of course, are outside the scope of coverage and thus cannot be applied to a deductible. But the PIP Statute only authorizes a small number of loss exclusions — none of which are applicable here. In the case sub judice, Defendant does not dispute that Plaintiff’s medical bills are covered under the applicable insurance policy. The type of expense at issue in the instant case is exactly what was contemplated by the coverage section of the insurance contract and the No-Fault statute: medical expenses related to a motor vehicle accident. This is further confirmed by Defendant’s decision to apply the bills at issue in this case, as well as the prior providers’ bills, to the deductible. The issue in General Star simply concerned what could be applied to the deductible, the issue in the instant case is only how much of the covered losses to apply to the deductible. As such, the Court finds General Star inapplicable to the instant case. The Court additionally finds that the orders cited by Defendant that agree with Defendant’s position unpersuasive as they rely, inappropriately in this Court’s view, on General Star. Several of the orders supplied by Defendant compound the problem of reliance on General Star by permitting an insurer, through contractual terms, to redefine statutory terms that set minimum coverages. Moreover, Defendant’s cited orders ignore §627.736(5)(a)4 and overlook the clear intent behind the 2003 amendments to the Deductible Statute.

The Court finds that Plaintiff’s interpretation creates a consistent whole, gives full effect to all terms of both statutes, and does not treat key phrases of the statute as mere surplusage. See Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452 (Fla. 1992). As such, the Court finds that Defendant was required by §627.739 to apply the full amount of the prior providers’ bills to the deductible. Accordingly, the Court finds that the applicable deductible was completely satisfied prior to consideration of Plaintiff’s bills. As such, the Court finds that Defendant is required to issue reimbursement for Plaintiff’s bills for dates of service July 15 and July 17.The Policy

The Court finds that the policy at issue is even clearer regarding the inapplicability of the fee schedules to bills that are applied to the deductible. The No-Fault statute only provides the minimum thresholds for coverage and benefits which an insurer cannot restrict or negate. See Nunez v. Geico Gen. Ins. Co., 117 So. 3d 388 (Fla. 2013) [38 Fla. L. Weekly S440a]; Salas v. Liberty Mut. Fire Ins. Co., 272 So. 2d 1 (Fla. 1972); and Mullis v. State Farm Mut. Auto. Ins. Co., 252 So. 2d 229, 232-34 (Fla. 1971). An insurer may always issue policies with broader coverage or greater benefits than the statutory minimums. See Wright v. Auto-Owners Insurance Company, 739 So. 2d 180 (Fla. 2d DCA 1999) [24 Fla. L. Weekly D2033a]; Sturgis v. Fortune Insurance Company, 475 So. 2d 1272 (Fla. 2d DCA 1985). Assuming, arguendo, the §627.736 and §627.739 permitted application of the fee schedule limitations to charges that are applied to the deductible, the Court finds that Defendant’s policy language would nevertheless control as it provides broader benefits. In fact, Defendant’s policy appears to specifically endorse Plaintiff’s position regarding the interpretation of the Deductible Statute.

The methodology of applying bills to the deductible is detailed in Defendant’s policy of insurance. The methodology is found in the appropriately titled section: “Application of Any Deductible and Workers’ Compensation Offset”. The policy provides, in pertinent part:

1. . . .Any deductible will be applied to 100% of properly billed and documented Medical Expenses. . .that are eligible to be paid under this coverage. The deductible will be applied to such expenses and losses upon our receipt of reasonable documented proof of the expenses and losses and the amount of expenses and losses incurred.

2. After any applicable deductible has been applied, we will pay the balance of properly billed and documented Medical Expenses. . .in accordance with the percentages and limits as described in the section titled Limits.

The term “Medical Expenses” is defined, in pertinent part, as: “reasonable charges incurred for medically necessary medical. . .services”. The policy then defines reasonable charges by listing several factors the insurer may consider. The factors include all of the “fact based” elements contained in §627.736(5)(a). It is clear, that without more, this policy could not be considered to have clearly and unambiguously elected the fee schedules. See Geico Gen. Ins. Co. v. Virtual Imaging Servs., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; and Orthopedic Specialists v. Allstate Ins. Co., 2015 Fla. App. LEXIS 12467 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a]. Accordingly, under the facts of this case, the Court finds that Paragraph 1 of this section requires Defendant to apply the injured insured’s full bills to the deductible without making fee schedule reductions.

The Court’s view of the correct operation of this contractual clause is further confirmed when examining paragraph 2 which first invokes the “Limits” section. This section provides, in pertinent part:

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” . . .

. . . .

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. . .

If this policy makes a fee schedule election, the “Limits” section is where such election resides.¹ However, the Court finds that the “Limits” section is clearly self-limited to situations where Defendant issues payment for a medical bill. There is no language that would expand the applicability of the fee schedules to bills Defendant was not paying, such as those being applied to a deductible. Paragraph 2 of the “Application of Any Deductible and Workers’ Compensation Offset” clause reinforces this idea as it is clear the fee schedule limitation is only applicable “[a]fter any applicable deductible has been applied”. Accordingly, in the case sub judice, the Court finds that the policy of insurance required Defendant to apply the providers’ full bills to the deductible. Accordingly, the Court finds that the deductible was fully satisfied prior to the Defendant’s application of Plaintiff’s bill to the deductible. The Court finds that the policy of insurance requires Defendant to pay Plaintiff’s bills.

Therefore, based on the foregoing, it is hereby ORDERED, ADJUDGED, AND DECLARED:

1. Plaintiff’s motion for Summary Judgment is GRANTED,

2. Defendant’s motion for Summary Judgment is DENIED,

3. The phrase “expenses” as used in §627.739 means “medical bills”,

4. §627.739 requires an insurer apply the full expenses and losses,

5. The fee schedule limitations found in §627.736(5)(a)1 are only applicable when an insurer actually reimburses an expense,

6. Based on the statute, Defendant inappropriately made fee schedule reductions to bills that were applied to the deductible and this misapplication lead to an impermissible nonpayment of Plaintiff’s bills; and

7. Based on the policy at issue, Defendant inappropriately made fee schedule reductions to bills that were applied to the deductible and this misapplication lead to an impermissible nonpayment of Plaintiff’s bills.

CERTIFIED QUESTION

The Court finds that the issue presented in this case is one of great public importance affecting the uniform administration of justice. This Court has jurisdiction over numerous cases that were solely filed on this single issue. Two Circuit Courts, sitting in appellate capacity, are in conflict over this issue. See Progressive American Insurance Co. v. Chambers Medical Group, Inc. (a/a/o Sheila Wilcox), Case No. 2015 SP 000850 NC (Fla. 12th Cir. Ct. App. February 24, 2016) and Garrison Property and Cas. Ins. Co v. New Smyrna Imaging, LLC (a/a/o Megan McClanahan, 23 Fla. L. Weekly Supp. 708a (Fla. 18th Cir. Ct. App. 2015). Additionally, the Court has been made aware of several County Courts that have diverged on this same issue. This divergence of opinions has created a tremendous amount of uncertainty for insureds, insurers, and medical providers. Accordingly, this Court certifies the following question to the District Court of Appeal, Fourth District, as a matter of great public importance:

PURSUANT TO FLA. STAT. §627.739, IS AN INSURER REQUIRED TO APPLY THE DEDUCTIBLE TO 100% OF AN INSURED’S EXPENSES AND LOSSES PRIOR TO APPLYING ANY PERMISSIVE FEE SCHEDULE PAYMENT LIMITATION FOUND IN §627.736(5)(a)1, FLA. STAT. (2013)?

FINAL JUDGMENT

THIS CAUSE having been reviewed by the Court, the Court having granted Summary Judgment regarding the proper methodology of applying a deductible in a No-Fault policy to medical bills, and the parties having agreed this case solely concerns the single issue addressed in the Summary Judgment order, it is hereupon ORDERED AND ADJUDGED as follows:

1. Final Judgment is entered in favor of Plaintiff, Care Wellness Center, LLC, which shall recover from the Defendant State Farm Mutual Automobile Insurance Company in the above-captioned action.

2. The Final Judgment amount as to damages is $241.90 (which consists of $214.12 medical benefits and $27.78 prejudgment interest). This Final Judgment shall bear interest at the legal rate, 4.78% per annum, upon the entire sum of the judgment for which let execution issue forthwith.

3. The Court finds that Plaintiff is entitled to an award of attorneys’ fees and costs. The Court reserves jurisdiction to determine the amount of fees and costs and to enter further orders to enforce this judgment.

__________________

¹The parties have specifically excluded, for the purposes of this motion, any issue concerning the sufficiency of Defendant’s fee schedule election as to charges Defendant reimburses. As none of the charges at issue have been reimbursed by Defendant, such a determination is unnecessary to the resolution of this motion.