25 Fla. L. Weekly Supp. 384b
Online Reference: FLWSUPP 2504HANLInsurance — Personal injury protection — Coverage — Medical expenses — Statutory fee schedules — Clear and unambiguous election by insurer — PIP policy that states that insurer will pay reasonable charges and defines “reasonable charge” as amount determined by insurer pursuant to all factors discussed in section 627.736(5)(a) as well as No-Fault Act schedule of maximum charges does not clearly and unambiguously elect to limit reimbursement to permissive statutory fee schedules — Compliance with Office of Insurance Regulation requirements for insurance and mere approval by OIR of policy form does not validate policy as complying with requirement that it provide unambiguous notice of intent to limit reimbursement to permissive statutory fee schedules
HALLANDALE OPEN MRI, LLC., a/a/o Avonelle Hanley-Green, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE 16-17126 (54). June 14, 2017. Florence T. Barner, Judge. Counsel: Fesner Petion, Law Offices of Fesner Petion, Hollywood, for Plaintiff. Michael S. Walsh and Kubicki Draper, Ft. Lauderdale, for Defendant.
ORDER GRANTING PLAINTIFF’S CROSS MOTION FORFINAL SUMMARY JUDGMENT AND DENYINGDEFENDANT’S AMENDED MOTION FOR FINALSUMMARY JUDGMENT
THIS CAUSE having come on to be considered before the Court on May 24, 2017 on Defendant’s Second Amended Motion for Final Summary Judgment and the Plaintiff’s Cross Motion for Final Summary Judgment and the Court having reviewed the Motion, relevant legal authorities, having heard oral argument, having made a thorough review of the matters filed of record and having been sufficiently advised in the premises, the Court finds as follows:
Defendant, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (hereinafter “Defendant”, “Insurer” or “State Farm”) filed its Amended Motion for Final Summary Judgment on or about February 23, 2017. Plaintiff, HALLANDALE OPEN MRI, LLC., a/a/o Avonelle Hanley-Green (hereinafter “Plaintiff”) filed its Cross Motion for Final Summary Judgment on regarding the medical reasonableness of Plaintiff’s charges on or about May 3, 2017. It is undisputed that Plaintiff provided diagnostic medical treatment to the Defendant’s insured, Avonelle Hanley-Green, on November 12, 2014. Plaintiff billed $4,950.00 for the services provided to Defendant’s insured pursuant to an assignment of benefits. In response, Defendant allowed $2,943.46 and $14.18 in interest which is equivalent to 80% of the total allowable medical expenses calculated pursuant to the schedule of maximum charges set forth in F.S. 627.736(5)(a)1. Plaintiff argues that the language contained in State Farm’s 9810A policy and Explanation of Benefits are insufficient to permit State Farm to apply the limitation set for in F.S. 627.736(5)(a)1.
The Florida Supreme Court established that there are different payment methodologies for calculating reimbursement under the subject PIP Statute, F.S. 627.736. The first payment methodology is contained within Subsection 627.736(5)(a)1 — insurer pays 80% of all reasonable expenses for medically necessary services (hereinafter “reasonableness methodology” or “fact-dependent inquiry”). Based on that methodology, reasonableness is a fact-dependent inquiry determined by the considerations of various factors including:
(a). the usual and customary charges and payments accepted by the provider involved in the dispute;
(b). reimbursement levels in the community;
(c). reimbursement levels in various federal and state medical fee schedules applicable to automobile coverages;
(d). and any other information relevant to the reasonableness of the reimbursement for the service, treatment or supply. F.S. 627.736(5)(a)(1)(2010).
The other payment method, the alternative payment methodology contained within Subsection 627.736(5)(a)2, provides that insurers may limit reimbursement to 80% of 200% of the allowable amount under the participating physician’s schedule of Medicare Part B. See Geico General Ins. Co. v. Virtual Imaging Services, Inc. 141 So. 2d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]; Allstate Ins. Co. v. Orthopedic Specialists, 212 So.3d 973 (Fla. 2017) [42 Fla. L. Weekly S38a]. However, the Florida Supreme Court held that under the 2008 amendments to the PIP Statute, “a PIP insurer cannot take advantage of the [new/permissive] Medicare Fee Schedules to limit reimbursements without notifying its insured by electing those Fee Schedules in its policy” Virtual Imaging at 160. Further, while Florida law is clear that an insurer must pay a provider’s charge if it is reasonable, an insurer does have the right to challenge the reasonableness of the charge and it is not relevant whether the insurer’s proposed reimbursement would likewise be deemed reasonable. State Farm Mutual Automobile Ins. Co. v. New Smyrna Imaging, LLC, 22 Fla. L. Weekly Supp. 508a, 509 n.1 (7th Cir. App. 2014).
In 2012, the Florida Legislature amended the PIP statute, again, to include express directives as to how an insurer can adopt the Schedule of Maximum Charges (the “Schedule”). This case is governed by this newer notice provision, Fla. Stat §627.736(5)(a)(5) which provides:
Effective July 1, 2012, 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 satisfies this requirement.
The legal issue in this case is whether Defendant, through its policy of insurance, was permitted to limit reimbursement of Plaintiff’s claims pursuant to Florida Statute §627.736(5)(a)(1). Florida Statute §627.736(5)(a) provides guidelines for medical treatment providers to follow as it relates to the amounts they may charge for treatment provided to an insured patient when seeking personal injury protection benefits from the respective insurance company as an assignee of the insured. F.S. §627.736(5)(a) (2013). A medical treatment provider, “may charge the insurer and injured party only a reasonable amount pursuant to this section. . .” Id. This statute further provides guidance regarding what factors may be considered when an insurer makes the determination as to whether the medical provider’s submitted charge is reasonable. Id. Specifically, the statute states:
In determining whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.
Id. Florida Statute §627.736(5)(a)(1) provides insurance companies with the ability to limit the reimbursement of reasonable charges to 80% of a schedule of maximum charges so long as the insurance policy involved contains language which clearly and unambiguously provides notice to the insured of the election of aforementioned statutory reimbursement limitation. Id. and F.S. §627.736(5)(a)(5) (2013).
In the instant case, the relevant policy language is excerpted below:
We will limit payment of Medical Expenses described in the Insuring Agreement of this policy’s No-Fault Coverage to 80% of a properly billed and documented reasonable charge, but in no event will we pay more than 80% of the following No-Fault Act “schedule of maximum charges” including the use of Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers:
a. For emergency transport and treatment by providers licensed under chapter 401, Florida Statutes, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, Florida Statutes, 75 percent of the hospital’s usual and customary charges.
c. For emergency services and care as defined by s. 395.002, Florida Statutes, provided in a facility licensed under chapter 395, Florida Statutes, 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.
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, except as provided in sub-sub-subparagraphs (II) and (III).
(II) Medicare Part B, in the case of services, supplies, and care provided by ambulatory surgical centers and clinical laboratories. (III) The Durable Medical Equipment Prosthetics/Orthotics and Supplies fee schedule of Medicare Part B, in the case of durable medical equipment.
Furthermore, the Declarations Page for the Insuring Agreement which is part of the policy at issue states, in relevant part,:
IMPORTANT NOTICE — Under No-Fault Coverage, the only medical expenses we will pay are the reasonable medical expenses that are payable under the Florida Motor Vehicle No-Fault Law. The most we will pay for such reasonable medical expenses is 80% of the “schedule of maximum charges” found in the Florida Motor Vehicle No-Fault Law and in the Limits section of the Florida Car Policy’s No-Fault Coverage
This Court finds the recent Florida Supreme Court decision in Allstate Ins. Co. v. Orthopedic Specialists, instructive in the instant case. 212 So. 3d 973, 2017 WL 372092 (Fla. Jan. 26, 2017) [42 Fla. L. Weekly S38a]. In Allstate the Florida Supreme Court was charged with reviewing an Allstate Insurance Company policy to determine whether the language in that policy was legally sufficient to authorize that insurer to apply the Medicare fee schedule reimbursement limitations set forth in §627.736(5)(a)(1).The Supreme Court clarified that the Section 5(a) schedules (including the “various federal and state medical fee schedules applicable to automobile and other insurance coverages”) “do not operate as ‘limitations’ on charges.” Id. Rather, they are “various relevant factors” that may be considered in determining the reasonableness of a charge for medical services. Id.
In the instant case, State Farm’s definition of “reasonable charge” appropriately lists these factors as “various relevant factors” that may be considered in determining the reasonableness of charges. The fact that the definition of “reasonable charge” follows that of the PIP Statute does not create an ambiguity. In fact, Defendant’s policy of insurance provides for “No-Fault Coverage” and states, “We will pay in accordance with the No-Fault Act properly billed and documented reasonable charges for bodily injury to an insured caused by an accident resulting from the ownership, maintenance, or use of a motor vehicle.. . .” State Farm Policy Form 9810A, page 4. Here, Defendant’s policy on page 5 defines the term “reasonable charge” as an amount determined by the insurer pursuant to all of the factors discussed in §627.736(5)(a), as well as the schedule of maximum charges. By doing so, the policy indicates that the Defendant has the option to calculate reimbursement through either the fact dependent inquiry or through the Medicare fee schedules. Further still, on page 16 of the policy, Defendant states that it will limit maximum reimbursement by application of the Medicare fee schedules. With this language, the policy shifts to calculating reimbursement solely pursuant to §627.736(5)(a)(1)’s permissive payment methodology. Since Defendant’s policy as a whole elects both methods of calculating reimbursement, and therefore does not definitively state that the Medicare fee schedules are the one and only method of calculating reimbursement, the policy language does not permit for Defendant to limit reimbursement pursuant to the schedule of maximum charges. Stated differently, in order to elect a payment limitation option, the PIP policy must do so clearly and unambiguously and may not alternate between two payment methods — there is no option for a hybrid method intertwining the two different methodologies. Since Florida law is clear that an ambiguous contractual provision is to be construed against the drafter, this Court finds that the 9810A policy fails as a matter of law to provide notice that it will limit reimbursement of Plaintiff’s claims pursuant to Florida Statute §627.736(5)(a)(1).
The PIP statute contains a safe harbor provision for an insurer to rely on in order to limit payment pursuant to the Medicare fee schedules. F.S. §627.736(5)(a)(5) (2013). This portion of the statute states, “Effective July 1, 2012, an insurer may limit payment as authorized by this paragraph only if the policy includes a notice at the time of issuance or renewal that the insurer may limit payment to the schedule of charges specified in this paragraph. A policy form approved by the office satisfies this requirement.” Id. (emphasis added). While the Defendant argues that since its policy form was approved by the Office of Insurance Regulation (hereinafter “OIR”) with an effective date of March 5, 2013, then it must be deemed lawful, this Court respectfully disagrees and holds that compliance with the OIR requirements for insurance and mere approval by the OIR of the form of an insurance contract does not provide an opinion as to its legality nor does it validate the contract for insurance. See e.g., Gonzalez v. Associates Life Ins. Co., 641 So.2d 895 (Fla. 3rd DCA 1994); Kaufman v. Mutual of Omaha Ins. Co., 681 So.2d 747 (Fla. 3rd DCA 1996) [21 Fla. L. Weekly D1716b]. Here, although the Defendant submitted its Form 9810A policy to the OIR and received the OIR’s approval to issue the policy, the Court agrees with, and incorporates into this Order, the persuasive and thorough analysis by both Hon. Eleni Derke and Hon. Robert W. Lee in the following decisions as it relates to the failings of the safe harbor provision in general and of the approval received by the OIR for Defendant’s Form 9810A policy: Theramed, LLC v. State Farm Mutual Automobile Ins. Co., Case No. 16-2015-SC-4069-MA (Duval Cty. Ct. Feb. 25, 2016) [23 Fla. L. Weekly Supp. 1038a]; and Pain and Injury Relief of Lake Worth v. State Farm Fire and Casualty Co., Case No. COCE15-2819 (53) (Broward Cty. Ct. Mar. 30, 2016) [23 Fla. L. Weekly Supp. 1087a], respectively.
Therefore, based upon all of the above, this Court finds that neither the Defendant’s policy language, nor Defendant’s reliance on the safe harbor provision, allowed Defendant to limit reimbursement of Plaintiff’s claims pursuant to Florida Statute §627.736(5)(a)(1). Accordingly, State Farm may not limit reasonable reimbursements based on the Schedule of maximum charges as matter of law.
IT IS HEREBY ORDERED AND ADJUDGED that the Plaintiff’s Cross Motion for Final Summary Judgment is hereby GRANTED and the Defendant’s Amended Motion for Final Summary Judgment is hereby DENIED .
