25 Fla. L. Weekly Supp. 277a
Online Reference: FLWSUPP 2503MURIInsurance — Personal injury protection — Coverage — Medical expenses — Statutory fee schedules — Clear and unambiguous election by insurer — PIP policy that states that insurer will pay 80% of reasonable charge but in no event will insurer pay more than 80% of schedule of maximum charges clearly and unambiguously elects to limit reimbursement to permissive statutory fee schedules
CEDA HEALTH OF FIU/KENDALL a/a/o Mercedez Murillo, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2014-03913-SP-24. Diana Gonzalez-Whyte, Judge.
THIS CAUSE having come upon Plaintiff’s Amended Motion for Summary Judgment and Defendant’s Motion for Summary Judgment and the Court having considered the record, and otherwise being duly advised in the premises, it is ORDERED AND ADJUDGED: Plaintiff’s Amended Motion for Summary Judgment is DENIED, and Defendant’s Motion for Summary Judgment is GRANTED.
I. FACTS
Mercedes Murillo (“insured”) was injured in an automobile accident on January 19, 2013. CEDA Health (“CEDA” or “Plaintiff”) provided the insured with treatment for the injuries sustained in the accident between January 21, 2013 and April 26, 2013. The State Farm insurance policy providing Personal Injury Protection (“PIP”) for Ms. Murillo was in full force on the date of the accident. Ms. Murillo assigned benefits to CEDA, who billed STATE FARM (“Defendant”) in the amount of $10,407.00 for the treatment provided to Ms. Murillo. State Farm reduced the bill and paid $5,974.38, leaving $2,351.22 unpaid. Defendant contends that the amount paid equals eighty (80) percent of the total allowable medical expenses calculated pursuant to the schedule of maximum charges set forth in Florida Statute § 627.736(5)(a)2.
II. ISSUE(S) BEFORE THE COURT
The issue before for this Court on summary judgment is whether State Farm’s policy in conjunction with the amendatory endorsement language is plain and unambiguous, clearly construed, and plainly understood so that the insured understands the pay schedule which State Farm has elected to reimburse according to.
III. SUMMARY JUDGMENT STANDARD
Summary judgment is properly granted where the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fla. R. Civ. P. 1.510. When facts of a cause of action are clear, and only questions of law exist, summary judgment is properly granted. Duprey v. United Servs. Auto. Assoc., 254 So. 2d 57, 58 (Fla. 1st DCA 1971).
IV. PIP STATUTORY PROVISION AND ENDORSEMENTS
The law is well-established that the Florida PIP statute § 627.736 (2007-2011) describes two distinct payment calculation methodologies. The first method is mandatory pursuant to § 627.736(1)(a) and (5)(a), which requires the insurer to pay for medical services rendered to the insured based on a fact intensive analysis of the reasonable amount of the charges (the “Reasonable Amount Method”). Fla. Stat. § 627.736(1)(a) and (5)(a).
The second method, is a permissive limitation which allows the insurer to limit reimbursement for medical services based on various Medicare fee schedules and numerous other terms and conditions (“Medicare Fee Schedule Method”). Specifically, these provisions provide that insurers “may limit reimbursement” to eighty (80) percent of a schedule of maximum charges set forth in the PIP statute. Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147, 154 (Fla. 2013) [38 Fla. L. Weekly S517a]. Fla. Stat. § 627.736(5)(a)2 and 5.
A PIP insurer cannot take advantage of the Medicare fee schedules to limit reimbursements without notifying its insured by electing those fee schedules in its policy or amendatory endorsement. See Allstate Ins. Co. v. Orthopedic Specialists, 212 So.3d 973, 976 (Fla. Jan. 26, 2017) [42 Fla. L. Weekly S38a]. Notice to the insured is necessary because the PIP statute, § 627.736 requires the insurer to pay for reasonable expenses for medically necessary services, but also permits the insurer to use the Medicare fee schedules as a basis for limiting reimbursements. Id. at 976, 977. The plain language of § 627.736 affords insurers two mechanisms for calculating reimbursements, however the insurer must clearly and unambiguously elect the permissive payment methodology in order to rely on it. See Kingsway Amigo Insurance Co. v. Ocean Health, Inc., 63 So. 3d 63, 67 (Fla. Dist. Ct. App. 2011) [36 Fla. L. Weekly D1062a]; See also Virtual Imaging, 141 So. 3d at 158.
STATE FARMS POLICY LANGUAGE
Under Section 11 — No-Fault — Coverage P and Medical Payments of State Farm’s original insurance policy, paragraph 2 states, “We will pay in accordance with the No-Fault Act. . . 1. Medical Expenses: 80% of the reasonable charges incurred. . .” The plain language of the original policy clearly elects to pay under the Reasonable Amount Method.
Defendant’s first amended to the policy is the 6910.3 Amendatory Endorsement, which states in pertinent part: “This endorsement is apart of your policy. Except for the changes it makes, all other terms of the policy remain the same and apply this endorsement. It is effective at the same time as your policy unless a different effective date is specified by us in writing.” (emphasis added) The 6910.3 Endorsement makes no change to the payment method in that it continues the default reimbursement methodology of the original policy by providing for 80% percent of all reasonable medical expenses to be reimbursed, and it further explains what Defendant will consider when assessing the reasonableness of medical expenses.
Defendant subsequently amended the policy with the 6126LS Amendatory Endorsement, which states the following in pertinent part:
This endorsement is part of the policy. . . .
The following is added to No-Fault — Coverage P: We will limit reimbursement of medical expenses to 80 percent of a properly billed reasonable charge but in no event will we pay more than 80 percent of the following schedule of maximum charges. . . . For all other medical services, supplies, and care, 200 percent of the allowable amount under the participating physicians’ fee schedule of Medicare Part B. . . .
The 6126LS Amendatory Endorsement language states (1) that State Farm will pay 80% of the reasonable charge, however (2) the amount paid will never exceed more than 80 the schedule of maximum charges of the allowable fee schedules. The language of § 627.736(5)(a)2 is permissive and offers State Farm a choice in dealing with the insured as to 1) whether to limit reimbursements based on the Medicare Fee Schedule Method or 2) whether to continue to reimburse pursuant to the Reasonable Amount Methodology mandated under § 627.736(5)(a)1. See Virtual Imaging, 141 So. 3d at 157.
V. CLEAR AND UNAMBIGUOUS
“If the language used in an insurance policy is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning of the language used so as to give effect to the policy as it was written.” Virtual Imaging, 141 So. 3d at 157. “Further, in order for an exclusion or limitation in a policy to be enforceable, the insurer must clearly and unambiguously draft a policy provision to achieve that result.” See Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 36 (Fla. 2000) [25 Fla. L. Weekly S211a]. The Medicare Fee Schedule Method set forth in § 627.736(5)(a)2 provides an option for insurers and in order for the insurer to exercise the option, the insurer must provide notice in the policy. Virtual Imaging, 141 So. 3d at 157-58. The provider also needs notice of the reimbursement rate because it is the provider who is forced to accept the lower payment rate after rendering services in reliance on the terms of the policy. Virtual Imaging, 141 So. 3d at 159-160. In Virtual Imaging, the Supreme Court of Florida held that an insurer may limit payment as authorized by the statute only if the insurance policy provides notice, at the time of issuance or renewal, that the insurer may limit payment pursuant to the schedule of charges as specified in Fla. Stat. § 627.736(5)(a)5. Id. at 154.
Plaintiff argues that Defendant’s policy is ambiguous under Virtual because it fails to state that State Farm (1) will not pay 80 percent of reasonable charges and that instead (2) will calculate benefits only under the permissive Medicare fee schedules. Their argument boils down to the belief that the Court in Virtual Imaging did not intend for the Insurers to be able to state both methods of payment and basically to pick and choose at their whim which payment methodology they will use to reimburse providers. The Court in Virtual Imaging, referred to this dilemma when it stated that [a]s the Fourth District explained in Kingsway, 63 So.3d at 67, the language in section 627.736(5)(a)5 “anticipates that an insurer will make a choice.” “Geico Indem. Co. v. Virtual Imaging Services, Inc., 79 So.3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]; 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”)(emphasis added).
The language in Virtual Imaging seemed to logically indicate that the Defendant would have to make a choice between one method or the other and could not have it both ways. This idea is further propounded within the Virtual Imaging decision when the Court states “([a]ccordingly, we conclude that the 2008 amendments were clearly permissive and offered insurers a choice in 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.” (emphasis added). In his dissenting opinion, Justice Canady, states that “[n]othing in the statute suggests that an insurer must make a one-time election between section 627.736(5)(a)l and section 627.736(5)(a)2. Nor does anything in the statute suggest that section 627.736(5)(a)2 is operative only if it is specifically referred to in the text of the relevant policy.” Virtual Imaging, 141 So. 3d at 161.
Allstate Ins. Co. v. Orthopedic Specialist is the most recent Florida Supreme Court decision on the issue. In Allstate, the Majority decision written by Justice Canady, continued Virtual Imaging’s dissenting opinion’s school of thought by concluding that “PIP policy cannot contain a statement that the insurer will not pay eighty (80) percent of reasonable charges because no insurer can disclaim the PIP statute’s reasonable medical expenses coverage mandate.” Allstate Ins. Co., 212 So.3d at 977. In other words, the reasonableness payment methodology is mandatory and cannot be disclaimed by the insurer. Furthermore, a PIP policy cannot state that the insurer will calculate benefits solely under the Medicare fee schedules contained within § 627.736(5)(a)2 because the Medicare fee schedules are not the only applicable mechanism for calculating reimbursements under the permissive payment methodology. Id. This means the insurer must follow the mandatory reasonableness method and may choose to limit pursuant to the Medicare fee schedule, so long as notice has been provided (emphasis added). See Allstate Ins. Co. v. Orthopedic Specialist, etc., 212 So.3d at 976 (Fla 2017) [42 Fla. L. Weekly S38a].; see also Virtual Imaging, 141 So. 3d at 157-58.
Because insurers may not elect the permissive Medicare fee schedule without also providing the mandatory Reasonableness payment methodology, this Court finds that the 6126LS Endorsement provides sufficient notice to the insured that State Farm will pay pursuant to the reasonableness payment methodology as required by § 627.736, and that State Farm may limit under the Medicare fee schedule of 627.736(5)(a)2.VI. CONCLUSION
This Court therefore finds that there is no genuine issue of material fact. STATE FARM’s policy is clear and unambiguous and has properly elected the option to limit reimbursement, satisfying the PIP statute’s mandate, permissive election and the case law. Plaintiff’s Motion for Summary Judgement is DENIED and Defendant’s Motion for Summary Judgment is GRANTED.
