25 Fla. L. Weekly Supp. 295a
Online Reference: FLWSUPP 2503BOWEInsurance — 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 amount it deems reasonable, that insurer will consider multiple factors when calculating what reasonable amount will be and that in no event will insurer pay more than 80% of amounts listed in schedule of maximum charges clearly and unambiguously elects to limit reimbursement to permissive statutory fee schedules
PRECISION DIAGNOSTIC OF LAKE WORTH, LLC a/a/o Timothy Bowe, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE 16-005859 (49). May 26, 2017. Nina W. Di Pietro, Judge. Counsel: Steven Lander, for Plaintiff. Robert A. Kingsford and Lynn Alfano, for Defendant.
ORDER GRANTING DEFENDANT’SMOTION FOR FINAL SUMMARY JUDGMENT
THIS CAUSE having come before the Court on April 27, 2017 for hearing of the Defendant’s Motion for Final Summary Judgment (hereinafter “Motion”), and the Court having reviewed the Motion, the entire Court file, and the relevant legal authorities; having heard 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:
The following material facts are undisputed: The patient in this case, Timothy Bowe, sustained injuries in an automobile accident on February 26, 2013; this patient was covered under a policy of insurance (State Farm Policy Form 9810A) issued by Defendant, State Farm Mutual Automobile Insurance Company (hereinafter “Defendant”); Precision Diagnostic of Lake Worth, LLC (hereinafter “Plaintiff”), as an assignee of the patient, submitted a bill to Defendant for diagnostic services rendered on April 12, 2013; and Defendant paid the claim at a rate that equals eighty (80) percent of the total allowable medical expenses calculated pursuant to the schedule of maximum charges set forth in §627.736(5)(a)(1) (2013). Therefore, the Court finds that there are no issues of material fact in dispute and the matter is ripe for summary judgment.
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, “[M]ay 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. F.S. §627.736(5)(a)(1) (2013) and F.S. §627.736(5)(a)(5) (2013).
In 2013, the Supreme Court of Florida issued its ruling in Geico General Insurance Company v. Virtual Imaging Services, Inc., (hereinafter “Virtual”), which details the history of the Florida No-Fault Law and the various amendments to the statute over the years through the 2012 amendments. 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]. Virtual held that a PIP insurer cannot take advantage of the Medicare fee schedules [one of the enumerated fee schedules contained within F.S. §627.736(5)(a)(1)] to limit reimbursements without notifying its insured by electing those fee schedules in its policy. Id. at 1601. Specifically, Virtual states:
We conclude that notice to the insured, through an election in the policy, is necessary because the 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. . . In other words, the PIP statute provides that the Medicare fee schedules are one possible method of calculating reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate, but does not provide that they are the only method of doing so.
Virtual at 1.50. Virtual interpreted the statute, with reference to several district court decisions, as containing two methods to determine the reasonableness of a medical provider’s charges: one being the fact dependent inquiry discussed in the former §627.736(5)(a)(1) [currently numbered as §627.736(5)(a)]; and the other being by reference to the Medicare fee schedules discussed in the former §627.736(5)(a)(2) [currently numbered as §627.736(5)(a)(1)]. Id. at 156. Virtual’s holding makes it clear that the PIP statute affords insurers two different mechanisms for calculating reimbursements and that the insurer must clearly and unambiguously elect the permissive payment methodology [the former §627.736(5)(a)(2), currently numbered §627.736(5)(a)(1)] in order to rely on it to limit reimbursements. Id. at 158.
This Court had previously found that State Farm’s 9810A policy form did not comply with the dictates of the Virtual based on the Fourth District Court of Appeal’s opinion in Orthopedic Specialists a/a/o Kelli Serridge v. Allstate Insurance Company, 177 So.3d 19 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a] (hereinafter “Serridge”). See Pompano Spine Center a/a/o Similien v. State Farm Mutual Automobile Insurance Company, 24 Fla. L. Weekly Supp. 253a (Broward Cty. Court, April 25, 2016). Serridge interpreted Virtual and took it one step further by imposing an additional requirement in order for a policy to limit reimbursement to the Medicare fee schedules. Serridge at 25-26. According to the court in Serridge, “The policy must make it inescapably discernable that it will not pay the ‘basic’ statutorily required coverage and will instead substitute the Medicare fee schedules as the exclusive form of reimbursement.” Id. at 26. That requirement has since been rejected by the Supreme Court of Florida. See Allstate Insurance Company v. Orthopedic Specialists, 212 So.3d 973 (Fla. 2017) [42 Fla. L. Weekly S38a] (hereinafter “Orthopedic Specialists”).
The Supreme Court of Florida, in Orthopedic Specialists, reiterated its holding in Virtual and then specifically addressed and rejected the additional requirement in Serridge, stating:
A PIP policy cannot contain a statement that the insurer will not pay eighty percent of reasonable charges because no insurer can disclaim the PIP statute’s reasonable medical expenses coverage mandate. . . . Furthermore, a PIP policy cannot state that the insurer will calculate benefits solely under the Medicare fee schedules. . . because the Medicare fee schedules are not the only applicable mechanism for calculating reimbursements under the permissive payment methodology.
Orthopedic Specialists at 977.
Here, Defendant’s policy of insurance provides for “No-Fault Coverage” and specifically contains the following text, in pertinent part, regarding medical expense coverage and the limits to this coverage:
Definitions
Reasonable Charge, which includes reasonable expense, means an amount determined by us to be reasonable in accordance with the No-Fault Act, considering one or more of the following:
1. usual and customary charges;
2. payments accepted by the provider;
3. reimbursement levels in the community;
4. various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages;
5. the schedule of maximum charges in the No-Fault Act, [sic]
6. other information relevant to the reasonableness of the charge for the service, treatment, or supply; or
7. Medicare coding policies and payment methodologies of the federal Center for Medicare and Medicaid Services, including applicable modifiers, if the coding policy or payment methodology does not constitute a utilization limit. . .
Insuring Agreement
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 as follows:
1. Medical Expenses
We will pay 80% of properly billed and documented medical expenses. . .
Limits
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. . .
State Farm Policy Form 9810A (emphasis added). Insummary, the policy states that Defendant will pay 80% of an amount that it deems to be a reasonable. Defendant will consider multiple factors [which includes, but is not limited to, the “fact dependent” factors listed in F.S. §627.736(5)(a)] when calculating what this reasonable amount will be, and in no event will Defendant pay more than 80% of the respective amounts listed in F.S. §627.736(5)(a)(1)’s schedule of maximum charges.
First, the aforementioned policy language is in compliance with F.S. §627.736(5)(a) which states, “In determining whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to [the fact dependent factors],” as well as Orthopedic Specialists which stated that, “A PIP policy cannot contain a statement that the insurer will not pay eighty percent of reasonable charges.” F.S. §627.736(5)(a) (2013) and Orthopedic Specialists at 977. The policy language is also in compliance with F.S. §627.736(5)(a)(1), which states, “The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges. . .” and F.S. §627.736(5)(a)(5) which states, “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.” F.S. §627.736(5)(a)(1) (2013) and F.S. §627.736(5)(a)(5) (2013).
In Orthopedic Specialists, the Supreme Court of Florida opined on language in Allstate Insurance Company’s policy. Allstate’s policy stated, “Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736. . . including, but not limited, to, all fee schedules”. Orthopedic Specialists at 975 (emphasis added). The Supreme Court of Florida found that Allstate’s language satisfied Virtual and was legally sufficient to allow Allstate to, “. . .use the permissive Medicare fee schedules identified in section 627.736(5)(a)(2) [the current §627.736(5)(a)(1)] to limit reimbursements.” Orthopedic Specialists at 979. The same can be said about Defendant’s language in the policy at issue. Not only does Defendant’s policy language notify its insured that Defendant will be capping payment at 80% of the schedule of maximum charges, but it makes clear that this cap will always be applied due to the policy’s “in no event will we pay more than. . .” provision. Therefore, the Court finds that Defendant’s policy leaves no question as to whether the schedule of maximum charges will be applied as a limit to reimbursement.
In conclusion, the Court finds that Defendant’s policy language clearly and unambiguously elects the permissive payment methodology, and Defendant may, as a matter of law, limit payments based upon the schedule of maximum charges. Defendant’s payment in this case was therefore legally appropriate.
ORDERED AND ADJUDGED that Defendant’s Motion for Final Summary Judgment is Granted.
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1Although Virtual’s opinion limits its holding to insurance policies in effect from the effective date of the 2008 amendments to the PIP statute through the effective date of the 2012 amendments, the Supreme Court of Florida’s interpretation of the language of F.S. §627.736(5)(a) and F.S. §627.736(5)(a)(1) [formerly F.S. §627.736(5)(a)(1) and F.S. §627.736(5)(a)(2)] is equally applicable here.
