24 Fla. L. Weekly Supp. 631b
Online Reference: FLWSUPP 2408COOKInsurance — Personal injury protection — Coverage — Medical expenses — Deductible was properly applied to amount remaining after claim was reduced by percentage described in PIP statute — Policy language provided sufficient notice to insured that insurer would use statutory fee schedules to determine reasonableness of medical expenses
FOUNDATION FOR A HEALTH ST. PETERSBURG, INC., (a/a/o Cook, Breanna), Plaintiff, vs. DIRECT GENERAL INSURANCE COMPANY, Defendant. County Court, 6th Judicial Circuit in and for Pinellas County, Case No. 12-000622-SC-SPC. August 4, 2016. Lorraine M. Kelly, Judge. Counsel: Russel Lazega, Dania Beach, for Plaintiff. Dorothy V. DiFiore, Quintairos, Prieto, Wood & Boyer, P.A., Tampa, for Defendant.
ORDER DENYING PLAINTIFF’S MOTIONFOR FINAL SUMMARY JUDGMENT AS TOREASONABLENESS, RELATEDNESS AND MEDICALNECESSITY OF THE SERVICES RENDERED TO PATIENT
This Cause was heard by the Court on Plaintiff’s Motion for Final Summary Judgment as to Reasonableness, Relatedness and Medical Necessity of the Services Rendered to Patient with learned counsel for the parties present. The Court heard argument, reviewed the pleadings, motions, affidavits, insurance policy language, and applicable law.
The parties agreed there was no dispute as to the facts, the usual and customary charges, nor their relatedness nor necessity as to the instant facts elaborated upon exhaustively and well in previous pleadings in this cause. It was agreed that for purposes of the motion going forward the only decisions for the Court were two matters of law, as follows:
1. Whether the deductible required under the insured’s policy should be applied to the original billed amount, or the amount after the figure had been reduced by the percentage described in the PIP statute1
and,
2. Whether or not the insurance policy provided sufficient notice to the insured that the Defendant would use the fee schedules2 contained in the PIP statute to determine reasonableness of medical expenses.3
ISSUE ONE: In this case Defendant used the “reasonable” arnount4 charged by Plaintiff as the “usual and customary charge” for the hospital expenses. The Court agrees with Defendant’s analysis that applying the deductible to the plain meaning of “100 percent of the expenses and losses described in s. 627.736” means 100% “that PIP pays,” and 100% of the reasonable medical expenses. Reasonable medical expenses are the only medical expenses described in section 627.736. The Florida Supreme Court has held that the fee schedule can be used to determine reasonableness. The fee schedule amount IS the reasonable amount, the only amount described in the statute.
ISSUE TWO: Giving the language of the policy its plain meaning the Court finds the policy puts the insured on notice that the permissible fee schedule may be opted into by the insurer. The Court finds the language is not vague, but instead represents a floor or baseline upon which the insurance company may exercise discretion. Moreover, the Court finds the language of the policy properly incorporates the reasonableness contemplated by the language of Fla. Stat. 627.736(5)(a)(1)(b).
In determining whether charges for medical expenses under this Part are reasonable, we may reduce payments for amounts that are billed to any lesser amount that results from the application of any schedule of charges or alternative reimbursement method that is expressly referenced or authorized for use by insures under the No Fault Law. Any reductions we make will not affect the rights of an insured for coverage under this Part. Direct’s policy language.
CONCLUSION: In reaching this decision the Court takes note of the stated purpose of the Insurance Rates and Contracts Statute which is to protect the citizens of Florida. Any construction or interpretation should be liberally construed in favor of the insured. Because Defendant applies the insured’s chosen deductible to the sum arrived at after the reduction of 75% using the PIP schedule of charges, the consumer’s portion ends up being nearly 1/3 the amount s/he would pay, were the $1000 deductible applied in the fashion suggested by the Plaintiff. Although this results in a smaller net payout to the provider, the insured is ultimately out of pocket substantially less money. Looking to the language of the statute whose stated purpose, inter alia is “to promote the public welfare by regulating insurance rates” and to “protect policyholders and the public against the adverse effects of excessive, inadequate, or unfairly discriminatory insurance rates. . .” Fla. Stat. s.627.031(1-2) the Court finds this goal is best achieved when the bottom line dollar amount to be paid by the insured is lowest, not upon whether the provider’s net receipt is diminished.
It is therefore Ordered and Adjudged that this Court DENIES Plaintiff’s Motion for Final Summary Judgment as to Reasonableness, Relatedness and Medical Necessity of the Services Rendered to Patient. Counsel for the parties have discussed and agree that in the future, Defendant will likely be filing a Motion for Summary Judgment.
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1At the time of the accident in 2012, the PIP statute provided;
“2. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:
a. For emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges. . .” 627.736(5)(a)2.b., Fla. (2010)
2The Defendant advises that reimbursements will be “subject to” the fee schedules. Moreover, Defendant specifies it will only pay reasonable medical expenses and in determining reasonableness, will reduce payments to any less amount that results from the application of the schedule of charges expressly referenced and authorized for use under the No Fault Law. The only fee schedule applicable to hospitals is found in F.S. 627.736(5)(a)2.b. Fla. Stat. (2010), the one used by Defendant in this case.
3A Court in this Circuit has recognized the validity of the Defendant’s policy concluding the same policy language as in the instant case unambiguously references the fee schedules and is sufficient to put the insured on notice the Defendant will use the schedules in the PIP statute to determine what is reasonable. See, Wood Health, Inc., a/a/o Joshua Brown v. Direct General Ins. Co., Case No,: 12-4904SC-SPC (Pin. Cnty, July 10, 2013)(Hon. Kathleen Hessinger); Spinal Connection Centers d/b/a Stellar Life Care, Inc., a/a/o MST Sunjida Afrin v. Direct General Ins. Co., Case No.: 12-4908SC-SPC, (Pin. Cnty., July 10, 2013) (Hon. Kathleen Hessinger).
4$1643.90 was Plaintiff’s usual and customary charge for the services provided. Plaintiff wants to have the deductible apply to the sum of $1,643.90 leaving $643.94 to be paid by the insurer. Using Plaintiff’s methodology the consumer pays a larger out-of-pocket amount because the deductible is applied to the original, total bill instead of the amount reduced by 75% as permitted by Fla. Stat. s. 627.736(5)(a)(2). Using Defendant’s methodology, insured’s portion is factored on a lower total payout making the insured’s dollar go further. If, as Direct’s policy provides the deductible is applied to the total amount billed calculated AFTER applying the fee schedule amount, then Insured’s responsibility is factored on the amount of $1,232.93 resulting in a net savings to the insured consumer.
