25 Fla. L. Weekly Supp. 61a
Online Reference: FLWSUPP 2501ABREInsurance — Personal injury protection — Coverage — Medical expenses — Insurer failed to make clear and unambiguous election to utilized permissive statutory fee schedule to reimburse bills for medical services — Policy language indicating that insurer would pay 80% of reasonable charges and also stating that insurer would not pay more than 80% of schedule of maximum charges created impermissible hybrid reimbursement methodology — Further, PIP policy includes significant impermissible deviations from PIP statute that purport to allow insurer to rely on fee schedules not listed in statute and Medicare payment methodologies and policies to pay even less than minimum amount allowed under PIP statute and to provide for reductions in insured’s coinsurance amount — Approval of policy by Office of Insurance Regulation does not automatically validate legal sufficiency or enforceability of contents of policy
ADVANTACARE OF FLORIDA, LLC, a/a/o Danely Abreu, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County, Civil Division. Case No. 2016-20888-CONS. March 17, 2017. Shirley Green, Judge. Counsel: J. David Davila, Davila Law Group, Altamonte Springs, for Plaintiff. Michael Hammond, Progressive PIP House Counsel, Maitland, for Defendant.
PER CURIAM AFFIRMED. 3-28-2018 (Progressive American Insurance Co. v. Advantacare of Florida, LLC, Case No. 2017-1008-APCC (7th Jud. Circuit)).
ORDER ON COMPETING MOTIONS FORSUMMARY DISPOSITION
THIS MATTER came before the Court on February 27, 2017, concerning: (1) the “Defendant’s Motion for Final Summary Disposition on Election of Fee Schedule and Incorporated Memorandum of Law” filed on February 23, 2017 by the Defendant, Progressive American Insurance Company (“Progressive”) and Plaintiff’s Motion for Summary Disposition” filed on February 21, 2017 by the Plaintiff, Advantacare of Florida, LLC, as assignee of Danely Abreu (the “Insured Patient”).” After considering the motions, responses to the motions, replies to the responses, the admissible evidence, and arguments of counsel, and being otherwise advised in the premises, this Court
ORDERS AND ADJUDGES as follows:
A. Introduction
1. This is an action involving claims for personal injury protection (“PIP”) insurance benefits for health care services provided by the Plaintiff to the Insured Patient, who was covered by Progressive’s insurance policy (i.e., Form 9611AFL (07/13)). Plaintiff’s complaint is for breach of contract and contends that the Defendant failed to pay the proper amount under the terms of the policy.
2. The issue at the crux of the parties’ competing motions for summary judgment is whether Progressive’s Policy 9611AFL (07/13) invokes the default fact-dependent reasonable amount payment calculation methodology set forth in Section 627.736(5)(a), Florida Statutes (2012-2016) (the “Reasonable Amount Method”), or the “schedule of maximum charges” and permissive payment calculation methodology set forth in Section 627.736(5)(a)1-5, Florida Statutes (2012-2016) (the “Medicare Fee Schedule Method”),1 or a hybrid method which includes elements from both of those methods as well as other elements not authorized by Section 627.736, Florida Statutes (2012-2016) (the “PIP statute”). Progressive contends that Policy 9611AFL lawfully elects the Medicare Fee Schedule Method, while the Plaintiff contends 9611AFL Policy adopts an unlawful hybrid method, and as a result, the Reasonable Amount Method must be applied as the “default” method.
3. Disputes concerning statutory interpretation and contract interpretation present questions of law, which are properly resolved by summary judgment. See, e.g., Almand Const. Co., Inc. v. Evans, 547 So. 2d 626, 628 (Fla. 1989); Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 131 (Fla.2000) [25 Fla. L. Weekly S390a]; Tindall v. Allstate Ins. Co., 472 So.2d 1291, 1292 (Fla. 2d DCA 1985).
4. As explained below, this Court concludes the undisputed material facts demonstrate as a matter of law that the Plaintiff is entitled to partial summary disposition against Progressive.
B. Undisputed Material Facts
5. The Insured Patient was involved in a motor vehicle accident on October 13, 2016. At that time, the Insured Patient had PIP coverage pursuant to an insurance policy (i.e., Form 9611AFL) issued by Progressive.
6. Progressive’s insurance policy providing PIP coverage to the Insured Patient states the following in pertinent part:
PART II(A) — PERSONAL INJURY PROTECTION COVERAGE
INSURING AGREEMENT
If you pay the premium for this coverage, we will pay benefits that an insured person is entitled to receive pursuant to the Florida Motor Vehicle No-Fault Law, as amended . . . .
. . . . .
Personal Injury Protection Coverage benefits consist of:
1. Medical benefits. . .
(emph. added). In addition, the policy includes the following provisions associated with PIP coverage under Part II(A):
UNREASONABLE OR UNNECESSARY MEDICAL BENEFITS
If an insured person incurs medical benefits that we deem to be unreasonableor unnecessary, we may refuse to pay for those medical benefits and contest them.
We will determine to be unreasonable any charges incurred that exceed the maximum charges set forth in Section 627.736(5)(a)(1)(a through f) of the Florida Motor Vehicle No-Fault Law, as amended. Pursuant to Florida law, we will limit reimbursement to, and pay no more than, 80 percent of the following schedule of maximum charges:
. . . . .
a. for emergency transport and treatment by providers licensed under Chapter 401 of the Florida Statutes, 200 percent of Medicare;
b. for emergency services and care provided by a hospital licensed under Chapter 395 of the Florida Statutes, 75 percent of the hospital’s usual and customary charges;
c. for emergency services and care as defined by Section 395.002 of the Florida Statutes, provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community;
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;
e. for hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services; and
f. for all other medical services, supplies and care, 200 percent of the allowable amount under the participating physicians fee schedule of Medicare Part B, except as follows:
(1) for services, supplies and care provided by ambulatory surgical centers and clinical laboratories, 200 percent of the allowable amount under Medicare Part B; and
(2) for durable medical equipment, 200 percent of the allowable amount under “The Durable Medical Equipment Prosthetics/Orthotics and Supplies” fee schedule of Medicare Part B.
However, if such services, supplies or care is not reimbursable under Medicare Part B, as provided in subsection f., we will limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under Section 440.13 of the Florida Statutes, and rules adopted thereunder which are in effect at the time such services, supplies or care is provided. Services, supplies or care that is not reimbursable under Medicare or workers’ compensation will not be reimbursed by us.
The applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the year in which the services, supplies or care is rendered and for the area in which such services, supplies or care is rendered. This applicable fee schedule or payment limitation applies throughout the remainder of that year, notwithstanding any subsequent change made to the fee schedule or payment limitation, except that it may not be less than the allowable amount under the applicable schedules of Medicare Part B for 2007 for medical services, supplies and care subject to Medicare Part B.
In determining the appropriate reimbursement under the applicable Medicare fee schedule, all reasonable, medically necessary, and covered charges for services, supplies and care submitted by physicians, non-physician practitioners, or any other provider will be subject tothe Center for Medicare Services (CMS) coding policies and payment methodologies, including applicable modifiers. The CMS policies include, but are not limited to: coding edits, both mutually exclusive and inclusive, payment limitations, andcoding guidelines subject to the National Correct Coding Initiative (NCCI), Hospital Outpatient Prospective Payment System (OPPS), Multiple Procedure Payment Reduction (MPPR), and Multiple Surgery Reduction Rules (MSRR).
We will reduce any payment to a medical provider under this Part II(A) by any amounts we deem to be unreasonable medical benefits. However, the medical benefits shall provide reimbursement only for such services, supplies and care that are lawfully rendered, supervised, ordered, or prescribed. Any reduction taken will not affect the rights of an insured person for coverage under this Part II(A). Whenever a medical provider agrees to a reduction of medical benefits charged, any co-payment owed by an insured person will also be reduced.
The insured person shall not be responsible for payment of any reductions applied by us. If a medical provider disputes an amount paid by us, we will be responsible for resolving such dispute. . . . .
The policy also provides the following definition of “Medical benefits”:
“Medical benefits” means 80% of all reasonable expenses incurred for medically necessary medical, surgical, x-ray, dental and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services. . . . .
See, Exhibit to ASffidavit of Thomas Soich.2
7. Thus, the insurance policy agrees to pay “medical benefits,” which are expressly defined as “80% of all reasonable expenses incurred for medically necessary. . . services.” Notably, the insurance policy’s express definition of “medical benefits” says absolutely nothing about any Medicare fee schedules or CMS policies. Id. Nonetheless, the policy states Progressive “will limit reimbursement to, and pay no more than, 80 percent of the . . . schedule of maximum charges” in Section 627.736(5)(a)l.a-f of the Medicare Fee Schedule Method.
8. Despite stating that Progressive will “pay no more than” 80% of the “schedule of maximum charges” of the Medicare Fee Schedule Method, the policy nonetheless purports to give Progressive the authority to pay less than that in at least three ways: (a) the policy provision which states Progressive “will reduce any payment . . . by any amounts we deem to be unreasonable medical benefits,” (b) the policy omits several important restrictions placed on the Medicare Fee Schedule Method by the PIP statute, and (c) the policy purports to adopt all “CMS policies” which “include but are not limited to” things like coding edits, payment limitations, coding guidelines, NCCI, OPPS, MPPR and MSRR, as well as any and all other unidentified “CMS policies.”
9. Although the policy states that Progressive “will determine to be unreasonable any charges incurred that exceed the maximum charges set forth in Section 627.736(5)(a)(1)(a through f),” the policy does not identify or explain the amount that Progressive will actually accept as being “reasonable”And, the policy does not include any definition for the terms “reasonable expenses” or “unreasonable medical benefits” used therein. When corporate representatives were asked how Progressive goes about determining whether a charge is “reasonable,” Progressive’s attorneys claimed that information is confidential and privileged, and instructed its corporate representatives not to answer. See, e.g., Martin (b)(6) Depo. at p. 50-57; Campbell (b)(6) Depo. at p. 50-51, 56-57. In any event, according to the testimony of Progressive’s corporate representative, if a health care provider’s charge is less than the schedule of maximum charges amount, Progressive can still determine that lesser charge is “unreasonable.” See, Barrow (b)(6) Depo. at p. 38.
10. On August 3, 2015 through August 26, 2015, the Plaintiff provided medical treatment to the Insured Patient and obtained a written assignment of benefits. Instead of paying 80% of the billed amount, Progressive reduced the charge to a purported “allowed amount,” which was less than the 80% of the amount that would be paid according to the Medicare Fee Schedule Method. Instead of paying 80% of the billed amount or 80% of the Medicare Fee Schedule Method amount, Progressive paid 80% of a lesser amount based on MPPR as well as various payment schemes.
11. Progressive maintains that it properly reimbursed the Plaintiff. The Plaintiff contends that Progressive’s policy does not lawfully elect the Medicare Fee Schedule Method.
c. Legal Analysis
12. The subject claim is governed by the version of Section 627.736, Florida Statutes (2012-2016), as amended in 2012 and in effect since January 1, 2013. However, the PIP statute has been amended numerous times, and a brief history of that law is helpful to understand the context of the controversy in this case.
13. The Florida Motor Vehicle No-Fault Law was originally enacted in 1971, and is found in Sections 627.730 through 627.7405, Florida Statutes. See, Ch. 71-252, Laws of Fla. (1971). Since then, Florida has operated under as a “no-fault” system, whereby motor vehicle operators must secure PIP insurance with $10,000.00 in combined medical expense and lost wages coverage. See, e.g., § 627.736(1)(a), Fla. Stat. The PIP statute has always required insurers to cover “reasonable expenses” for medical expenses. Id.
14. Under the versions of Section 627.736 in effect from January 1, 2008 through June 30, 2012, the Legislature gave PIP insurers two alternative options for calculating the reasonable medical expenses coverage amount payable: (a) the original longstanding methodology of paying 80% of the reasonable amount of the charges based on various fact-dependent elements, referred to herein as the Reasonable Amount Method, or (b) a new alternative permissive methodology of paying 80% of various predetermined fixed amounts derived from a list of Medicare fee schedules and various other terms and conditions set forth in Section 627.736(5)(a)2 through 5, referred to herein as the Medicare Fee Schedule Method.
15. With respect to the 2008 version of Section 627.736, the following concepts are clear:
(a) Under the Reasonable Amount Method described in Section 627.736(5)(a)1 (2008), PIP insurers must pay 80% of all reasonable expenses charged by a health care provider, based on a fact-dependent methodology, but not “in excess of the amount the person or institution customarily charges for like services or supplies.”
(b) Alternatively, under the Medicare Fee Schedule Method described in Section 627.736(5)(a)2-5 (2008), the PIP insurer “may” limit payment of medical bills “to” 80% of amounts derived from a list of Medicare fee schedules and other applicable terms and conditions. Under the Medicare Fee Schedule Method, any lawfully provided treatment that is not covered by Medicare or workers’ compensation is not required to be reimbursed by the insurer, and therefore, must be paid by the insured patient himself. See, § 627.736(5)(a)1.f (2008). Additionally, the health care provider may not balance-bill the insured for any amount in excess of such limits, except for amounts not covered by PIP due to coinsurance or maximum policy limits. See, § 627.736(5)(a)4 (2008).
16. The Reasonable Amount Method is the “default methodology for calculating PIP benefits” and typically generates the highest level of PIP benefits recoverable under the PIP statute.3 In contrast, the alternative Medicare Fee Schedule Method typically generates the “minimum” level of PIP benefits recoverable under the PIP statute.4 Under both methods, however, the insurer is not required to pay more than the health care provider actually charged. See, §627.736(5)(a) and (5)(a)5, Fla. Stat.
17. After the PIP statute was amended in 2008, a series of appellate decisions was issued by the Second, Third and Fourth DCAs concerning the Medicare Fee Schedule Method. See, Geico Indemnity Co. v. Physicians Group, LLC, a.a.o., Paul Androski, 47 So.3d 354, 356 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D2448a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; Nationwide Mut. Ins. Co. v. AFO Imaging, Inc., 71 So.3d 134, 137 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D1463b]; Geico Indem. Co. v. Virtual Imaging Servs., Inc., 79 So.3d 55 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a] (“Virtual I”); DCI MRI, Inc. v. Geico Indem. Co., 79 So.3d 840 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D170e]; Geico General Insurance Co. v. Virtual Imaging Services, Inc. 90 So.3d 321 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D985b] (“Virtual II”).
18. In Nationwide, the Second DCA held that the Medicare Fee Schedule Method was the “minimum” amount payable and that PIP insurers could not rely on a Medicare fee schedule (i.e., the OPD fee schedule) that was not listed in the Medicare Fee Schedule Method provisions of the PIP statute. In four other district court cases (Kingsway, Virtual I, DCI MRI, and Virtual II), the Third and Fourth DCAs generally held that PIP insurers must make a clear and unambiguous election in the policy to rely on the Medicare Fee Schedule Method.
19. More specifically, in Kingsway, the Fourth DCA held the PIP statute “allows an insurer to choose between two different payment calculation methodology options” and “anticipates that an insurer will make a choice” which must be “clearly and unambiguously” elected. Kingsway, 63 So.3d at 67-68 (emph. added). Thereafter, in DCI MRI, the Fourth DCA explained that its prior decision in Kingsway required the PIP insurers to provide adequate “notice” to insureds and their health care providers of the intent to adopt the Medicare Fee Schedule Method. DCI MRI, 79 So.3d at 842.
20. After these district court appellate decisions were issued, the Legislature amended the PIP statute again in mid-2012. Among other things, some of the subsections were renumbered and modified as of July 1, 2012 and January 1, 2013. The substance of subsection (5) remained largely unchanged, but the subsections were renumbered and a new subsection (5)(a)5 was added. See, Ch. 2012-197, Laws of Fla. (2012).
21. Notably, the 2012 amendments maintained the same two different alternative methods established by the 2008 amendments, and did nothing to abrogate the pre-existing case law such as Kingsway, which required PIP insurers “to choose between two different payment calculation methodology options,” or DCI MRI, which explained that PIP insurance companies must provide adequate “notice” to adopt the Medicare Fee Schedule Method. See, Ch. 2012-197, Laws of Fla. (2012). Indeed, the 2012 amendments codified the DCI MRI notice requirement in the new subsection (5)(a)5. Nothing in the 2012 amendments authorized PIP insurers to combine the two alternative methods, or to pick and choose among the terms and conditions to create a single amalgamated or hybrid method.
22. About one year after the new 2012 amendments took effect, the Florida Supreme Court issued its decision in Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc.,141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a] (“Virtual III”). Even though the 2008 version of the PIP statute did not include the new subsection (5)(a)5 notice provision created in the 2012 amendment, the Florida Supreme Court repeatedly explained, consistent with the Fourth DCA’s prior holdings in Kingsway and DCI MRI, that “notice” to insureds and their health care providers is required under the 2008 version of the PIP statute:
. . . We rephrase the certified question because the specific legal issue in this case is not whether an insurer can compute reimbursements based on the Medicare fee schedules “rather than” provide “reasonable medical expenses” coverage, as the question certified by the Third District frames the issue, but whether the insurer can use the Medicare fee schedules as a method for calculating the “reasonable medical expenses” coverage[5] the insurer is required by section 627.736 to provide, when the policy does not provide notice of the insurer’s election to use the fee schedules.
. . . . .
. . . We conclude that notice to the insured, through an election in the policy, is necessary becausethe PIP statute, section 627.736, requires the insurer to pay for “reasonable expenses … for medically necessary … services,” § 627.736(1)(a), Fla. Stat., but merely permits the insurer to use the Medicare fee schedules as a basis for limiting reimbursements, see § 627.736(5)(a)2., Fla. Stat. ….
Accordingly, we conclude that the insurer was required to give notice to its insured by electing the permissive Medicare fee schedules in its policy before taking advantage of the Medicare fee schedule methodology to limit reimbursements. …
Virtual III, 141 So.3d at 150 (emph. added; footnote omitted).
23. Besides this notice-of-election requirement, one of the main issues decided in Virtual III was whether the 2008 amendments to the PIP statute created one amalgamated method or two separate and distinct methods. The Florida Supreme Court confirmed that there are two separate and distinct methods, and consistent with the Fourth DCA’s prior holding in Kingsway, the Florida Supreme Court held that the PIP insurer must make “a choice” between one method “or” the other in its insurance policy:
… GEICO contends that there are not two methodologies for determining reasonableness. Four district courts of appeal cases, however, have all concluded the opposite; that is, that there are two methodologies. See Virtual II, 90 So.3d at 323; DCI MRI, 79 So.3d at 842; Virtual I, 79 So.3d at 57-58; Kingsway, 63 So.3d at 67. We agree with the district court decisions in this line of cases and conclude that the 2008 amendments provided an alternative, permissive way for an insurer to calculate reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate, but did not set forth the only methodology for doing so.
The 2008 fee schedule amendments used the word “may” to describe an insurer’s ability to limit reimbursements based on the Medicare fee schedules. See [former] § 627.736(5)(a)2. [now (5)(a)1], Fla. Stat. As the Third District observed in Virtual I, if an insurer is not required to use the Medicare fee schedules as a method of calculating reimbursements, the insurer must have “recourse to some alternative means for determining a reimbursement amount” if it chooses not to use the Medicare fee schedules. Virtual I, 79 So.3d at 58; see also Kingsway, 63 So.3d at 67 (stating that the 2008 amendments plainly allow an insurer “to choose between two different payment calculation methodology options” based on the Legislature’s use of the word “may,” which “indicates that this option choice is not mandatory”).
… The permissive language of the 2008 amendments, therefore, plainly demonstrates that there are two different methodologies for calculating reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate. See Kingsway, 63 So.3d at 67.
Accordingly, we conclude that the 2008 amendments were clearly permissive and offered insurers a choicein dealing with their insureds as to whether to limit reimbursements based on the Medicare fee schedules or whether to continue to determine the reasonableness of provider charges for necessary medical services rendered to a PIP insured based on the factors enumerated in section 627.736(5)(a)1.
Virtual III, 141 So.3d at 156-157 (italics in original; bold and underline added). In Virtual III, Justice Canady’s dissenting opinion pointed out that the majority’s opinion in that case rests on the premise that sections 627.736(5)(a)1 and 2 “respectively establish mutually exclusive payment methodologies.” Virtual III, 141 So.3d at 160 (Canady, J., dissenting) (emph. added). Because there are two “alternative” or “mutually exclusive” methods to determine the amount of PIP benefits, Virtual III requires PIP insurers to “elect” or make “a choice” between one method or the other. Moreover, the Florida Supreme Court also held that in making this “choice,” PIP insurers cannot rely on the Medicare fee schedules unless their policy “clearly and unambiguously” adopts the Medicare Fee Schedule Method. Virtual III, 141 So.3d at 158.
24. As illustrated by the Florida Supreme Court’s refusal to give Geico the option to use both methods in the same policy, PIP insurers do not have the option of alternating between or combining the two methods to create an amalgamated or hybrid method. See, DNA Center, LLC, a.a.o. Helen Roy v. State Farm Mut. Auto. Ins. Co., 23 Fla. L. Weekly Supp. 1043a (Volusia County Ct. Feb. 24, 2016). See also, Crespo & Associates, P.A., a.a.o. Debra Thompson v. State Farm Mut. Auto. Ins. Co., FLWSUPP 2409DTHO, __ Fla. L. Weekly Supp. __, ¶24 (Hillsborough County Ct. Sept. 19, 2016); Crespo & Associates, P.A. a.a.o. Veronica Rondon v. State Farm Mut. Auto. Ins. Co., 23 Fla. L. Weekly Supp. 982b, ¶¶ 12-13 (Fla. Hillsborough County Ct. Dec. 18, 2015); University Community Hosp. a/a/o Marjorie Young v. Mercury Ins. Co. of Fla., 21 Fla. L. Weekly Supp. 89a, ¶¶ 8-11 (Fla. Hillsborough County Ct., Sept. 16, 2013).
25. A “hybrid” method is not only contrary to Virtual III, but also creates significant problems for insureds and their health care providers. The biggest problem caused by a hybrid method is its effect on the applicability of various terms and conditions in Section 627.736(5)(a)1 through 5 (2012-2015). For example, under the default Reasonable Amount Method, the health care provider may balance-bill the patient for the difference left unpaid by the PIP insurer. But if the PIP insurer properly elects the Medicare Fee Schedule Method, such balance-billing is prohibited. See, § 627.736(5)(a)4 (2012-2015). As another example, under the Reasonable Amount Method, the PIP insurer must pay a reasonable amount, even if the type of service rendered would not be paid by Medicare or worker’s compensation. But under the Medicare Fee Schedule Method, the PIP insurer can pay nothing in that situation and the insured patient would be left responsible for paying the entire bill. See, § 627.736(5)(a)l.f and 4 (2012-2015). As another example, under the Medicare Fee Schedule Method, the PIP insurer may, in appropriate circumstances, avail itself to certain other Medicare coding policies and payment methodologies, but cannot do so under the Reasonable Amount Method. See, § 627.736(5)(a)3 (2012-2015). Thus, the structure of the PIP statute’s payment provisions and the governing case law require the PIP insurer to choose one method or the other. See, DNA Center, LLC, a.a.o. Shakeithia Sylvester v. State Farm Mut. Auto. Ins. Co., Case No. 2016-20877-CONS, “Order Granting Plaintiff’s Motion for Partial Summary Judgment and Denying Defendant’s Motion for Final Summary Disposition” at p. 15-16 (Volusia County Ct. Feb. 3, 2017).
D. Progressive’s Policy Form 9611FLA does not “clearly and unambiguously” elect the Medicare Fee Schedule Method, and instead, adopts a hybrid method
26. Most PIP disputes are decided by the county courts. As of the date of the summary judgment hearing, dozens of different county and circuit court judges across the State of Florida have issued persuasive and well-reasoned decisions concluding that another PIP insurer (i.e., State Farm) has improperly adopted a hybrid method or otherwise failed to lawfully elect the Medicare Fee Schedule Method in its PIP insurance policies. In addition to the undersigned Judge, Judge Christopher Kelly here in Volusia County is among the many judges who have so ruled. See, New Smyrna Imaging, LLC, a/a/o Randy Durgin v. State Farm Mut. Auto. Ins. Co., Case No. 2014-20922-CONS, Div. 71, “Order Granting Plaintiff’s Motion for Partial Summary Judgment” (Fla. Volusia County Ct. Sept. 23, 2016)(Hon. Christopher Kelly); DNA Center LLC, a/a/o Jimmie Brazel v. State Farm Mut. Auto. Ins. Co., Case No. 2016-10572-CODL, Div. 71, “Order Granting Plaintiff’s Motion for Summary Disposition and Denying Defendant’s Motion for Summary Judgment” (Fla. Volusia County Ct., Sept. 23, 2016)(Hon. Christopher Kelly). A very similar decision was issued against another PIP insurer (i.e., Mercury Insurance). See, University Community Hosp. a/a/o v. Mercury Ins. Co. of Fla., 21 Fla. L. Weekly Supp. 89a (Fla. Hillsborough County Ct., Sept. 16, 2013).
27. Moreover, at least six other judges have entered similar decisions concerning Progressive’s policy language. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev v. Progressive American Ins. Co., Case No. 15-CC-16500, “Order on Competing Motions for Summary Judgment” (Hillsborough County Ct. Jan. 9, 2017) (Hon. Michael S. Williams); Interventional Spine Center, LLC, a. a. o. Pascal Files-Aime v. Progressive American Ins. Co., 23 Fla. L. Weekly Supp. 610a (Miami-Dade County Ct. Oct. 7, 2015) (Hon. Caryn C. Schwartz); Neurology Partners, P.A., d.b.a. Emas Spine & Brain Specialists, a.a.o. Phyllis Easley v. Progressive Select Ins. Co., Case No. 16-2015-SC-03690, “Order Denying Defendant’s Amended Motion for Summary Judgment on Policy Language Permitting F.S. 627.736(5)(a)(1) (2013)” (Duval County Ct. Dec. 15, 2015) (Hon. Gary P. Flower); Neurology Partners, P.A., d.b.a. Emas Spine & Brain, a.a.o. Arkeelia Evans v. Progressive Select Ins. Co., Case No. 16-2015-SC-5526 (CC-D), “Order on Cross-Motions for Summary Judgment” (Duval County Ct. July 22, 2016) (Hon. Lester Bass); Neurology Partners, P.A., d.b.a. Emas Spine & Brain Specialists, a.a.o. Heather Tyrie v. Progressive American Ins. Co., Case No. 16-2016-SC-89 (CC-J), “Order on Cross-Motions for Summary Judgment” (Duval County Ct. August 18, 2016) (Hon. Eleni Derke); Broward Rehab Center, Inc., a.a.o. Renarda L. Lewis v. Progressive Select Ins. Co., Case No. 14-12432-COSO-61, “Order Denying Defendant’s Motion for Final Summary Judgment Regarding the Application of Multiple Procedure Payment Reduction (‘MPPR’) Edits”, (Broward County Ct. April 12, 2016) (Hon. Arlene Simon Backman); Hollywood Diagnostics Center, Inc., a.a.o. Manuel Salinas v. 21st Century Centeninal Ins. Co., Case No. 15-22975- COCE (53) [24 Fla. L. Weekly Supp. 731b], “Order Granting Plaintiff’s Motion for Final Summary Disposition and Denying Defendant’s Motion for Final Summary Disposition” (Broward County Ct. Aug. 17, 2016) (Hon. Robert W. Lee). This Court generally agrees with those decisions.
28. As confirmed in Virtual III, the PIP statute does not create a single amalgamated payment calculation methodology, but rather “there are two methodologies.” Id., 141 So.3d at 156 (italics in original). In this case, Progressive’s policy commingles the two methods together to create a single “hybrid” method, in which Progressive attempts to give itself discretion to pay even less than the “minimum” amount authorized by the Medicare Fee Schedule Method by refusing to pay “any amounts we deem to be unreasonable medical benefits.” Progressive’s own corporate representative confirmed that this provision means that Progressive may deem a health care provider’s charge to be “unreasonable” even if that charge is less than the minimum amount payable under the Medicare Fee Schedule Method. See, Barrow (b)(6) Depo. at p. 38. Accordingly, Progressive’s policy does not clearly and unambiguously “elect” to rely on the Medicare Fee Schedule Method, but rather, attempts to use that method as a cap, so that Progressive can pay even less than the minimum amount allowed by the Medicare Fee Schedule Method. See, Nationwide, 71 So.3d at 137 (the Medicare Fee Schedule Method is “utilized in computing the minimum amount” payable by PIP insurance).
29. A PIP insurer is not authorized to give to itself the option to pay less than the minimum amount allowed by the Medicare Fee Schedule Method. As one judge explained:
Clearly, [the PIP insurer] 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. [The insurer] did not do so.
Pain & Injury Relief of Lake Worth, a.a.o. Evener Deronvil v. State Farm Fire & Cas. Co., 23 Fla. L. Weekly Supp. 1087a (Fla. Broward County Court 2016) (emph. added). Another judge explained:
… [The insurance company] agrees to pay the Medicare fee schedule (permissive election), unless they believe that the amount should be less, and in that case, they have the option of paying what they determine to be the reasonable charge (default method). Even the attorney representing the [insurance company] during the hearing said, “the most we will pay is the Medicare fee schedule.” Obviously, if the Medicare fee schedule is the most they will pay, then there will be times when they could decide to pay a lesser amount. If there is a lesser amount then the insurer has not made a clear and unequivocal election of the permissive payment method.
Moore Chiropractic Center, Inc., a.a.o. Ny Seng v. State Farm Mut. Auto. Ins. Co., Case No. 2014-SC-939 C, “Order Granting the Plaintiff’s Counter-Motion for Summary Judgment and Denying Defendant’s Amended Motion for Summary Judgment,” p. 4 (Fla. Clay County Ct. April 27, 2016) [24 Fla. L. Weekly Supp. 621a]. Progressive’s policy does the same thing.
30. Unlike State Farm’s 9810A policy, Progressive’s policy goes far beyond merely conflating the Reasonable Amount Method and the Medicare Fee Schedule Method into a single hybrid or amalgamated method. In contrast to State Farm’s 9810A policy, Progressive’s Policy Form 9611FLA also includes several significant deviations from the PIP statute, which are impermissible. These deviations are thoroughly explained in Judge Williams’ decision in Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev. For example, Policy 9611FLA purports to modify the requirements of subsection (5)(a)2 of the PIP statue. Policy 9611FLA omits the qualifying introductory provision from subsection (5)(a)2 of the PIP statue which indicates that the subsequent provisions are “For purposes of subparagraph 1.” That subparagraph (i.e., (5)(a)1) is where the “schedule of maximum benefits” is found in the PIP statute. See, §627.736(5)(a)1.a-f. Without that qualifying introductory phrase, Progressive attempts give itself the ability to rely on any and all other Medicare fee schedules and/or payment limitations that are not listed in Section 627.736(5)(a)1.a-f. This was confirmed by Progressive’s corporate representative, who testified that Progressive could apply “anything that Medicare could apply,” and that Progressive is “allowed to process PIP claims the same way that Medicare would process a Medicare claim[.]” See, Pisani (b)(6) Depo. at p. 76. Not only does the omission of this introductory phrase purport to permit Progressive to apply anything that Medicare could apply, but the omission also avoids the various statutory percentages of any fee schedule that must be applied under subsection (5)(a)1.a-f of the PIP statute. This contradicts the language of the PIP statute and purports to place additional restrictions on PIP benefits that are not authorized by the PIP statute. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶33.
31. Several other deviations from the PIP statute are found in the “CMS policies” provision of Policy 9611FLA, which states:
In determining the appropriate reimbursement under the applicable Medicare fee schedule, all reasonable, medically necessary, and covered charges for services, supplies and care submitted by physicians, non-physician practitioners, or any other provider will be subject to the Center for Medicare Services (CMS) coding policies and payment methodologies, including applicable modifiers. The CMS policies include, but are not limited to: coding edits, both mutually exclusive and inclusive, payment limitations, and coding guidelines subject to the National Correct Coding Initiative (NCCI), Hospital Outpatient Prospective Payment System (OPPS), Multiple Procedure Payment Reduction (MPPR), and Multiple Surgery Reduction Rules (MSRR).
As explained in Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev, at ¶¶34-47, this “CMS policies” provision is invalid for several reasons.
32. The first sentence of Section 627.736(5)(a)3 states that the Medicare Fee Schedule Method “does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation.” However, the “CMS policies” provision of the policy does not include this prohibition. Instead, it states that Progressive will use “CMS policies” which “include, but are not limited to” the enumerated items. Progressive’s corporate representative testified that the “include, but are not limited to” provision indicates that this is a non-exhaustive list and that Progressive can use other “CMS policies” that are not actually identified in the policy. See, Martin (b)(6) Depo. at p. 146. Another corporate representative testified that the “including but not limited to” phrase means Progressive can use anything that Medicare can use. See, Campbell (b)(6) Depo. at p. 101. Likewise, another corporate representative testified that Progressive can apply “anything that Medicare could apply,” and “process PIP claims the same way that Medicare would process a Medicare claim[.]” See, Pisani (b)(6) Depo. at p. 76. That same corporate representative (Lisa Pisani) also testified that Progressive can even use Medicare restrictions that place a reimbursement limitation on the number of treatments provided by the health care provider on a given day to the same patient. See, Pisani (b)(6) Depo. at p. 98. Therefore, the “CMS policies” provision is directly contrary to the first sentence of Section 627.736(5)(a)3. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶35.
33. The second sentence of Section 627.736(5)(a)3 states, “An insurer that applies the allowable payment limitations of subparagraph 1. must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider is entitled to reimbursement under Medicare due to restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes.” Once again, the above-quoted “CMS policies” provision of the policy does not include this prohibition, but instead has the “include, but are not limited to” provision. Therefore, the “CMS policies” provision is directly contrary to the second sentence of Section 627.736(5)(a)3. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶36.
34. Next, the term “CMS” refers to the U.S. Department of Health’s Centers for Medicare and Medicaid Services. The PIP statute’s fee schedule method only refers to Medicare and not Medicaid. However, according to Progressive’s corporate representative, the “CMS polices” provision in the policy is not just limited to “Medicare” policies, but also extends to “Medicaid” policies. See, Martin (b)(6) Depo. at p. 148-149. Therefore, the “CMS policies” provision is overbroad and improperly attempts to modify or expand the “Medicare” provisions of Section 627.736(5)(a)1-5. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶37.
35. Next, the “CMS polices” provision in the policy purports to authorize Progressive to rely on NCCI. NCCI restrictions are not mentioned or otherwise authorized anywhere in the PIP statute. The Fifth DCA has held that the PIP statute does not authorize insurers to use NCCI. See, SOCC, P.L. v. State Farm Mut. Auto. Ins. Co., 95 So.3d 903, (Fla. 5th DCA 2012) [37 Fla. L. Weekly D1663a] (PIP insurers are not allowed to rely on NCCI edits, because they are “any limitation on the number of treatments or utilization limits that would apply under Medicare”). See also, Interventional Spine Center, LLC, a.a.o. Pascal Files-Aime v. Progressive American Ins. Co., 23 Fla. L. Weekly Supp. 610a (Miami-Dade County Ct. Oct. 7, 2015) (holding that Progressive’s policy improperly invokes NCCI). Accordingly, the “CMS policies” provision unlawfully purports to rely on NCCI. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶38.
36. Next, the “CMS polices” provision in the policy purports to authorize Progressive to rely on OPPS (also known as the OPD fee schedule). OPPS is not mentioned or otherwise authorized anywhere in the PIP statute. The Second DCA has previously held that PIP insurers are prohibited from relying on OPPS. See, Nationwide Mutual Fire Insurance Co. v. AFO Imaging, Inc., 71 So.3d 134 (Fla. 2d DCA 2011) (PIP insurers are not allowed to rely on OPPS because the OPD fee schedule “is an entirely separate component of the Medicare B program from the participating physicians schedule”). Accordingly, the “CMS policies” provision unlawfully purports to rely on OPPS. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶39.
37. Next, the “CMS polices” provision in the policy purports to give Progressive the authority to do anything that Medicare and CMS (including Medicaid) can do. That provision is invalid because it “fails to clearly and unambiguously elect a single methodology of reimbursement” and instead, “allows it to use an almost limitless list of CMS reimbursement limitations and methodologies,” including methodologies which are “prohibited as limits on the number of treatments” and “utilization limits.” See, Interventional Spine Center, 23 Fla. L. Weekly Supp. 610a; Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶40.
38. With respect to this issue, the Court recognizes that Section 627.736(5)(a)3 was amended in 2012, as follows:
3.4
: Subparagraph 1.2.
does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation. An insurer that applies the allowable payment limitations of subparagraph 1.2.
must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider is would be
entitled to reimbursement under Medicare due to restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes. However, subparagraph 1. does not prohibit an insurer from using the 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.
Ch. 2012-197, §10, Laws of Fla. (2012) (strike-through and underline in original). Thus, the 2012 amendment to subsection (5)(a)3 added a new third sentence, but left the first and second sentences unchanged in all material respects (except for renumbering the cross-references and a grammatical change). The 2012 amendment did not alter or amend the substantive requirements of the first and second sentences of subsection (5)(a)3. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶41.
39. In summary, Section 627.736(5)(a)3 restricts PIP insurers from (1) using any limitation on the number of treatments or other utilization limits, (2) limiting reimbursement based upon the discipline or scope of a health care provider’s license, (3) from using coding policies or payment methodologies that constitute utilization limits, and most importantly, (4) because it expressly incorporates subparagraph 1, Section 627.736(5)(a)3 does not authorize an insurer to circumvent (5)(a)1, including (5)(a)1.f(I), to reimburse less than 80% of 200% of the participating physician fee schedule of Medicare Part B. The new third sentence of subsection (5)(a)3 permits the use of “Medicare coding policies and payment methodologies of [CMS], including applicable modifiers,” but that sentence does not allow them to use Medicare payment methodologies and policies (like NCCI, OPPS, MPPR, and others) to pay even less than the minimum amount allowed under the PIP statute. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶42.
40. The new third sentence added to subsection (5)(a)3 in 2012 cannot be construed to allow a PIP insurer to pay less than the “minimum” amount authorized by subsections (5)(a)1 and 2. Adopting such an interpretation would render completely meaningless the “schedule of maximum charges” provision of subsection (5)(a)1 and the other minimum payment provisions of subsection (5)(a)2, in conflict with well-settled principles of statutory construction. “Statutory language is not to be assumed superfluous; a statute must be construed so as to give meaning to all words and phrases contained within that statute.” See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶43, citing Terrinoni v. Westward Ho!, 418 So.2d 1143, 1146 (Fla. 1st DCA 1982); Atl. Coast Line R. Co. v. Boyd, 102 So. 2d 709, 712 (Fla. 1958).
41. In Nationwide, the Second DCA held that the fee schedules listed in subsection (5)(a)1.a.-f are used to calculate the “minimum amount” of PIP benefits. Id., 71 So.3d at 137. Further, under Section 627.736(5)(a)2, the amount paid under subsections (5)(a)1.a-f “may not be less than the allowable amount under the applicable schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.” Therefore, the new third sentence of subsection (5)(a)3 cannot be interpreted to allow PIP insurers to pay even lower benefits than the “minimum amount” indicated by subsection (5)(a)1 and 2. Otherwise, the result would be the total evisceration of subsections (5)(a)1 and 2. If the third sentence of subsection (5)(a)3 is truly intended to allow a PIP insurer to apply any Medicare coding policy or payment methodology, that would mean a PIP insurer can step into the shoes of Medicare, act like Medicare, by-pass subsections (5)(a)1.a-f and (5)(a)2 altogether, and simply pay 80% of 100% (instead of 80% of 200%) of the Medicare Participating Physicians Fee Schedule amount, because that is obviously a Medicare payment methodology; or that a PIP insurer could pay 80% of 95% of the Medicare physicians fee schedule amount to non-participating physicians, because that is also a Medicare payment methodology that applies to non-participating physicians. Those results would be directly contrary to subsections (5)(a)l.a-f and (5)(a)2, and would render those subsections completely meaningless. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶44.
42. The only way to give meaning and effect to the entire Medicare fee schedule method provisions of subsections (5)(a)1, 2 and 3, is to recognize (like the Second DCA has) that subsections (5)(a)1 and 2 establish the “minimum amount” payable under the Medicare fee schedule method. Subsection (5)(a)3 permits a PIP insurer to rely on Medicare coding policies and payment methodologies, but only to the extent such coding policies and payment methodologies are not “utilization limits,” do not impose restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes, and do not otherwise result in reimbursement less than the minimum amount payable under subsections (5)(a)1 and (5)(a)2. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev, at ¶45.
43. Thus, each portion of the PIP statute must be read in harmony with the other provisions of the PIP statute. If a PIP insurer clearly and unambiguously elects the Medicare Fee Schedule Method in its insurance policy, the minimum amounts to be paid are set by the fee schedules and payment limitations specifically listed in 627.736(5)(a)l.a.-f. for the year in which the medical services were rendered, or if greater, the 2007 version of those same fee schedules and payment limitations as required by 627.736(5)(a)2. As for the third sentence of Section 627.736(5)(a)3, the PIP insurer can only use other Medicare provisions to the extent they do not:
· result in payment less than the minimum amount reimbursable under Section 627.736(5)(a)l.a.-f. and (5)(a)2;
· apply any limitation on the number of treatments or other utilization limit, as prohibited by the first sentence of Section 627.736(5)(a)3; or
· result in a payment restriction or limitation that is based upon the type or discipline of the healthcare provider as prohibited by the second sentence of Section 627.736(5)(a)3.
See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶46.
44. Here, the plain language of the “CMS policies” provision in the policy purports to give Progressive the ability to totally disregard the Medicare Fee Schedule Method and step into the shoes of Medicare and CMS to pay less than the minimum authorized amount based on a CMS policy not identified in the PIP statute. This is unlawful. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶47, citing, Nunez v. Geico Gen. Ins. Co., 117 So. 3d 388, 392 (Fla. 2013) [38 Fla. L. Weekly S440a] (the Florida No-Fault statute “is mandatory” and conditions in a policy that are contrary to that statute are “invalid”); Vasques v. Mercury Cas. Co., 947 So. 2d 1265, 1269 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D363a] (insurance policy’s restrictions on statutorily mandated PIP coverage that are inconsistent with purpose of statute are invalid).
45. Yet another conflict between the PIP statute and Policy 9611FLA is found in the following provision concerning the insured patient’s co-payment amount:
Whenever a medical provider agrees to a reduction of medical benefits charged, any co-payment owed by an insured person will also be reduced.
The insured person shall not be responsible for payment of any reductions applied by us. If a medical provider disputes an amount paid by us, we will be responsible for resolving such dispute. . . . .
(Emph. added). According to this provision, if a health care provider’s charge is reduced to the Medicare Fee Schedule Method amount, that reduction applies to both the 80% portion paid by Progressive and to the 20% co-payment (or coinsurance) portion paid by the insured patient. See, Campbell (b)(6) Depo. at p. 109-110. This provision is in direct conflict with Section 627.736(5)(a)4, which states:
If an insurer limits payment as authorized by subparagraph 1., the person providing such services, supplies, or care may not bill or attempt to collect from the insured any amount in excess of such limits, except for amounts that are not covered by the insured’s personal injury protection coverage due to the coinsurance amount or maximum policy limits.
(Emph. added). According to subsection (5)(a)4, the Medicare Fee Schedule Method only applies to the 80% portion of the medical bill paid by the PIP insurer. The Medicare Fee Schedule Method does not afford any discount whatsoever to the insured patient’s 20% portion of the medical bill. Progressive has no legal authority to extend such a discount to the insured patient. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶48.
46. Finally, Progressive’s policy is not clear and unambiguous. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev, at ¶49. Indeed, Progressive’s own corporate representatives repeatedly testified that they themselves did not know the meaning of some of the terms used in the “CMS policies” provision of the policy or how they apply to PIP claims. See, e.g., Barrow (b)(6) Depo. at p. 32, 59, 60; Martin (b)(6) Depo. at p. 68-69, 72; Willis (b)(6) Depo. at p. 69; Campbell (b)(6) Depo. at p. 99, 107. When ambiguities exist in an insurance policy, they are interpreted liberally in favor of the insured and strictly against the insurance company who drafted the policy. See, e.g., Washington Nat. Ins. Corp. v. Ruderman, 117 So. 3d 943,951 (Fla. 2013); Prudential Prop. & Cas. Co. v. Swindell, 622 So. 2d 467, 470 (Fla. 1993); Miller Elec. Co. of Fla. v. Employers’ Liab. Assur. Corp., 171 So. 2d 40, 43 (Fla. 1st DCA 1965).
D. Progressive’s contrary arguments are rejected
47. In support of its argument, Progressive cites to decisions holding that an Allstate PIP insurance policy properly elects the Medicare Fee Schedule Method. See, Allstate Ins. Co. v. Orthopedic Specialists, — So.3d — , 2017 WL 372092 (Fla. Jan. 26, 2017) [42 Fla. L. Weekly S38a]; Allstate Fire & Cas. Inc. Co. v. Stand-Up MRI of Tallahassee, P.A., 188 So. 3d 1 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D693a]; Allstate Indemnity Co. v. Markley Chiro. & Acupuncture, LLC, — So. 3d — , 2016 WL 1238533 (Fla. 2d DCA Mar. 30, 2016) [41 Fla. L. Weekly D793b]; Florida Wellness & Rehab. v. Allstate Fire & Cas. Ins. Co., __ So.3d __, 2016 WL 3745527 (Fla. 3d DCA July 13, 2016) [41 Fla. L. Weekly D1619c]; South Fla. Wellness, Inc. v. Allstate Ins. Co., 89 F.Supp.3d 1338 (S.D. Fla. 2015). The Allstate policy does not include any provisions like Progressive’s policy which expressly commingles the various elements of the Reasonable Amount Method and the Medicare Fee Schedule Method, eliminates restrictions contained in the PIP statute, and purports to allow Progressive to do anything that CMS can do. And, in all of the Allstate cases, that insurance company consistently paid the Medicare Fee Schedule Method amount. In contrast, Progressive sometimes pays less and sometimes pays more than the Medicare Fee Schedule Method, depending on what factors it decides to apply. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶50; DNA Center, LLC, a.a.o. Shakeithia Sylvester, at Section VI.
48. This Court respectfully disagrees with Progressive’s argument that its hybrid method is authorized by the policy form approval process described in the 2012 version of Section 627.736(5)(a)5. Subsection (5)(a)5 states:
5. An insurer may limit payment as authorized by this paragraph only if the insurance policy includes a notice at the time of issuance or renewal that the insurer may limit payment pursuant to the schedule of charges specified in this paragraph. A policy form approved by the [Office of Insurance Regulation] satisfies this requirement. If a provider submits a charge for an amount less than the amount allowed under subparagraph 1., the insurer may pay the amount of the charge submitted.
(Emph. added). In this case, the Plaintiff is not challenging the sufficiency of “a notice” allegedly provided by Progressive, but rather is challenging provisions within Policy Form 9611FLA itself. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶51.
49. Progressive also contends that Policy Form 9611FLA complies with OIR Informational Memorandum OIR-12-02M dated May 4, 2012 and was approved by the Florida Office of Insurance Regulation (“OIR”) pursuant to subsection (5)(a)5 of the PIP statute. The OIR’s memorandum specifically states the agency “will commit to review filings submitted for this purpose . . . provided that the insurer has only submitted one endorsement in the file and that one endorsement only contains language to implement the notice requirement,” and explains that “All form filings are subject to the standard form review process of Section 627.410, Florida Statutes.” In addition, the OIR memorandum also contains disclaimers which state, “Depending upon the existing policy language and case by case filing details” the sample language “may be suitable,” but “Ultimately, it is the insurer’s responsibility to develop its own language after researching the issue, reviewing its contract forms, and conferring with its legal staff.” In this case, Progressive’s endorsement does not merely address the single isolated issue which OIR indicated that it would review. Further, there is also no admissible evidence in this record showing that Progressive’s endorsement was approved by the OIR for purposes of satisfying the general purposes of Section 627.410 or for the limited purposes of Section 627.736(5)(a)5 or for some other purpose. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶52.
50. As explained in Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶53, the mere approval by the OIR of “a notice” form or even an entire insurance policy form for use in the State of Florida does not automatically validate the legal sufficiency or enforceability of the contents of the insurance policy itself. See, e.g., Gonzalez v. Associates Life Ins. Co., 641 So.2d 895 (Fla. 3d DCA 1994); Kaufman v. Mutual of Omaha Ins. Co., 681 So.2d 747 (Fla.3d DCA 1996) [21 Fla. L. Weekly D1716b]. It is also well-settled that state agencies, such as the OIR, have no authority to interpret or enforce contracts, or to adjudicate contract disputes, and that such authority and jurisdiction is vested exclusively in the judiciary. See, e.g., Peck Plaza Condominium v. Div. of Florida Land Sales and Condominiums, Dept. of Business Reg., 371 So.2d 152, 153-54 (Fla. 1st DCA 1979); Biltmore Construction Co. v. State, Department of General Services, 363 So.2d 851, 853-854 (Fla. 1st DCA 1978); Vincent J. Fasano, Inc. v. School Bd. of Palm Beach , 436 So.2d 201, 202 (Fla. 4th DCA1983). Subsection (5)(a)5 of the PIP statute does not delegate to the OIR the authority to determine the meaning and legal sufficiency and enforceability of any and all provisions within an PIP insurance policy and to circumvent the exclusive jurisdiction of the court system to determine contract disputes by the mere act of rubber-stamping the word “approved” on a proposed insurance form. Such a delegation would violate the constitutional separation of powers doctrine. See, e.g., Askew v. Cross Key Waterways, 372 So. 2d 913, 924 (Fla. 1978).
51. In this case, Progressive’s Policy Form 9611FLA has material deviations from the sample language contained in the OIR memorandum and the PIP statute. These differences are significant because the OIR memorandum explains that the sample language “may” be suitable “depending” on the rest of the policy language and other case-by-case details. See, Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev at ¶54.
E. Conclusion
52. In summary, this Court agrees with the well-reasoned and persuasive decision of Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev, and the dozens of other county court decisions cited by the Plaintiff which hold that PIP insurers are not authorized to adopt the type of hybrid method contained in Progressive’s policy. In contrast, the cases cited by Progressive do not address or analyze the type of overreaching provisions contained in Policy 9611FLA or the implications of those provisions.
53. Accordingly, the Plaintiff’s “Motion for Summary Disposition” is hereby GRANTED, and Progressive’s “Motion for Final Summary Disposition on Election of Fee Schedule” is hereby DENIED.
54. This Court hereby determines and declares as a matter of law as follows:
(a) Progressive’s Insurance Policy and Policy Form 9611FLA do not clearly and unambiguously invoke the Medicare Fee Schedule Method as Progressive’s choice of one particular method of calculating PIP benefits to the exclusion of all others.
(b) With respect to PIP claims submitted under the Insurance Policy and Policy 9611FLA, Progressive is not lawfully authorized to pay such claims pursuant to the hybrid method described in that policy, and must instead pay such claims pursuant to the Reasonable Amount Method described in Section 627.736(5)(a) by default.
55. This is a non-final order. The Court reserves jurisdiction to determine the proper amount of damages to be awarded and any other remaining issues in this case.
__________________
1The terms “Reasonable Amount Method” and “Medicare Fee Schedule Method” are not actually found in the PIP statute itself, but are often used by courts and litigants as a short-hand reference for convenience. The Reasonable Amount Method is also sometimes referred to as the “default method,” the “fact-dependent method” and the “(5)(a) method.” The Medicare Fee Schedule Method is sometimes referred to as the “schedule of maximum charges,” the “permissive method,” the “alternative method” and the “(5)(a)1 method.”
2The Court notes that the above-quoted provisions found in Progressive’s Form 9611AFL are identical to the provisions found in Progressive’s “Form 9610A FL (10/05) Version 2.0.” as amended by “Personal Injury Protection Coverage Endorsement” labeled “Form A085 FL (05/12),” which are quoted in Hess Spinal & Medical Centers, Inc., a.a.o. Stefan Iliev v. Progressive American Ins. Co., Case No. 15-CC-16500, “Order on Competing Motions for Summary Judgment” (Hillsborough County Ct. Jan. 9, 2017).
3See, Allstate Fire & Cas. Ins. v. Stand-Up MRI of Tallahassee, P.A., 188 So.3d 1, 2-3 (Fla. 1st DCA Aug. 19, 2015) [40 Fla. L. Weekly D693b] (noting that the Reasonable Amount Method “is the default methodology for calculating PIP reimbursements, which also apparently results in higher reimbursements” than the Medicare Fee Schedule Method) (emph. added). See also, § 627.736(5)(a), Fla. Stat. (2012-2015) (health care provider “may charge the insurer and injured party only a reasonable amount pursuant to this section” and “such a charge may not exceed the amount the person or institution customarily charges”); Geico Indemnity Co. v. Physicians Group, LLC, a.a.o., Paul Androski, 47 So.3d 354, 356 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D2448a] (noting that amount payable for surgical procedure was $10,800 under the Reasonable Amount Method, but was merely $1,122 under the Medicare Fee Schedule Method).
4See, Nationwide Mut. Ins. Co. v. AFO Imaging, Inc., 71 So.3d 134, 137 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D1463b] (the Medicare Fee Schedule Method is “utilized in computing the minimum amount” payable by PIP insurance) (emph. added).
5As explained in Crespo & Associates, P.A., a.a.o. Debra Thompson v. State Farm Mut. Auto. Ins. Co., FLWSUPP 2409DTHO, __ Fla. L. Weekly Supp. __, n. 3 (Hillsborough County Ct. Sept. 19, 2016):
The “reasonable medical expenses coverage” described by the Florida Supreme Court refers to the required coverage described in subsection (1)(a) of the PIP statute (“Every insurance policy . . . shall provide personal injury protection . . . to a limit of $10,000 . . . as follows . . . Eighty percent of all reasonable expenses. . .”), and does not refer to the fact-dependent default payment calculation method that many courts and litigants commonly refer to as the “Reasonable Amount Method” described in subsection (5)(a)1 of the PIP statute. In rephrasing the certified question, the Florida Supreme Court was confirming that the “reasonable medical expenses coverage” is not replaced by the fee schedule method, but can be calculated using either the fact-dependent method or the fee schedule method. Virtual III clearly holds that “there are two different methodologies for calculating reimbursements to satisfy the PIP statutes reasonable expenses coverage mandate” and that insures must make “a choice” between one method “or” the other. Virtual III, 141 So.3d at 156-157 (italics in original; underline added). Likewise, Justice Canady’s dissenting opinion observes that the majority’s decision rests on the premise that the PIP statute establishes two “mutually exclusive payment methodologies.” Id., 141 So.3d at 160. Because the majority held that PIP insurers must make “a choice” between one method “or” the other, the “mutually exclusive” nature of the two methods is inescapable. Virtual III, 141 So.3d at 157 and 160.
