25 Fla. L. Weekly Supp. 204a
Online Reference: FLWSUPP 2502MICKInsurance — 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 but in no event will pay more than 80% of No-Fault Act schedule of maximum charges clearly and unambiguously elects to pay in accordance with permissive statutory fee schedules — Neither fact that policy also states that insurer will pay 80% of medical expenses incurred nor fact that policy references fee schedules in its definition of “reasonable charges” creates ambiguity
SIMPSON CHIROPRACTIC PAIN AND WELLNESS CENTER, P.A., as assignee of Shandra Mickel, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 19th Judicial Circuit in and for St. Lucie County. Case No. 562016SC001100C2XXXX. April 20, 2017. Daryl Isenhower, Judge.
ORDER GRANTING DEFENDANT’SMOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come before the Court on March 31, 2017 upon Defendant’s Motion for Summary Judgment on the issue of whether State Farm could limit reimbursement to the schedule of maximum charges found at Fla. Stat. § 627.736(5)(a)1, the Court having reviewed the motions and submitted authority, having heard argument of counsel, and after being otherwise fully advised in the premises, it finds:
The accident giving rise to this cause of action took place on June 24, 2014. At the time of the accident, Defendant covered the assignor under a policy of automobile insurance providing for $10,000.00 in No-Fault Benefits. The policy of insurance included a declarations page and policy form 9810A. Following the accident, Plaintiff provided to the assignor medical care. Plaintiff submitted to Defendant bills for medical expenses Plaintiff alleges were medically necessary and related to the automobile accident. Defendant limited reimbursement of the medical expenses to no more than 80% of the No-Fault Act’s schedule of maximum charges. Plaintiff alleges that Defendant did not properly elect in its policy, and therefore did not properly provide to the assignor notice of its intent to use, the No-Fault Act’s schedule of maximum charges. Defendant asserts that the policy allows Defendant to limit reimbursements of reasonable medical expenses.
The No-Fault Act (Fla. Stat. §627.736(1)(a)) requires automobile insurance policies issued in Florida to provide No-Fault Benefits coverage for “reasonable” medical expenses. “[T]he PIP statute sets forth a basic coverage mandate: every PIP insurer is required to — that is, the insurer ‘shall’ — reimburse eighty percent of reasonable expenses for medically necessary services.” Geico General Insurance Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147, 155 (Fla. 2013) [38 Fla. L. Weekly S517a]. This provision is the heart of the PIP statute’s coverage requirements. Id.
In 2012, the Florida Legislature amended the PIP statute to include express directives as to how a carrier can adopt the Schedule of Maximum Charges to limit reimbursement of reasonable medical expenses. See Fla. Stat. §627.736(5)(a)(5). This ease is governed by this provision, which provides as follows:
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 question for this Court is, therefore, whether State Farm’s insurance policy includes a notice that State Farm may limit payment of reimbursement to no more than the schedule of charges.
The policy at issue in this case consists of a declarations page and the 9810A policy form. The policy states as follows:
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, but only if that insured receives initial services and care from a provider described in A. below within 14 days after the motor vehicle accident that caused bodily injury to that insured.
* * *
The policy defines the term “medical expenses” to include “reasonable charges.” The term “reasonable charge” is also defined.
The No-Fault Coverage portion of the policy includes a “Limits” section. The limits section states as follows:“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’ . . . .” The limits section then lists the referenced schedule of maximum charges.
The policy satisfies the PIP statute’s basic coverage mandate by providing coverage for 80% of reasonable medical expenses. The policy then clearly and unambiguously limits payment of such reasonable medical expenses to no more than 80% of the No-Fault Act’s schedule of maximum charges. The State Farm policy properly elects the use of the fee schedules to limit reimbursement of reasonable medical expenses pursuant to Fla. Stat. §627.736(5)(a)(1). State Farm complied with the statutory notice requirement of Fla. Stat. §627.736(5)(a)(5).
Plaintiff argues that State Farm’s policy is ambiguous because it includes a “reasonableness methodology” and a “fee schedule methodology.” Plaintiff argues that State Farm’s policy does not clearly elect one payment methodology to the exclusion of the other, and that State Farm created a “hybrid” method. This “hybrid” is ambiguous, Plaintiff argues, and State Farm therefore did not properly elect the use of the fee schedule limitations. However, Plaintiff’s argument was expressly rejected by the Supreme Court of Florida in Allstate Insurance Company v. Orthopedic Specialists, etc., 42 Fla. L. Weekly S38a (Fla. Jan. 26, 2017), reh’g denied, SC15-2298, 2017 WL 1130950 (Fla. Mar. 27, 2017). The Allstate Court responded to an argument similar to Plaintiff’s as follows:
Respondents argue that Allstate’s policy is ambiguous under Virtual Imaging because it fails to state that Allstate: (1) will not actually pay eighty percent of reasonable charges and (2) will instead calculate benefits only under the permissive Medicare fee schedules contained within section 627.736(5)(a) 2. But Respondents’ argument misconstrues Virtual Imaging. 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. See Virtual Imaging, 141 So. 3d at 155. Furthermore, a PIP policy cannot state that the insurer will calculate benefits solely under the Medicare fee schedules contained within section 627.736(5)(a) 2. because the Medicare fee schedules are not the only applicable mechanism for calculating reimbursements under the permissive payment methodology. See id. at 159 (explaining that “the Medicare fee schedules are not the only mechanism for calculating reimbursements”).
Id. at *4 (emphasis added). The Court found that an election of the Schedule of Maximum Charges concerns only the election of a limitation on payment — as opposed to the election of an overall or exclusive payment methodology applicable to all PIP medical payments. The State Farm policy clearly states it will be using the Schedule which allows the insurer to limit payment. This satisfies the notice requirement.
Plaintiff further argues that State Farm’s definition of “reasonable charges,” which itself references fee schedules as one of seven factors State Farm may consider, creates an ambiguity that precludes State Farm’s use of the Schedule limitations. However, State Farm is allowed to consider various factors when analyzing the reasonableness of a provider’s charge — even though it elected to limit reimbursement based on the Schedule. See Fla. Stat. § 627.736(5)(a). In Orthopedic Specialists, the medical provider plaintiffs argued that Allstate’s policy was ambiguous because it commingled the fee schedules and factors referenced in Section (5)(a)1. [now Section (5)(a)] and the Schedule referenced in Section (5)(a)2. [now Section (5)(a)1.]. 2017 WL 372092 at *5. The 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. 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. If a submitted charge is less than those amounts listed in the Schedule, such medical expenses are subject to a determination as to whether they are reasonable in amount. If, however, a submitted charge is greater than those amounts listed in the Schedule, the policy will limit reimbursement to no more than 80% of the Schedule. The Schedule details the maximum reimbursable amounts, or limit, of the policy payments. Accordingly, State Farm may as a matter of law limit payments based on the Schedule of Maximum Charges.
It is therefore
ORDERED AND ADJUDGED that Defendant’s Motion for Summary Judgment is GRANTED.
