25 Fla. L. Weekly Supp. 659a

Online Reference: FLWSUPP 2507LAGOInsurance — Personal injury protection — Coverage — Medical expenses — Statutory fee schedules — Clear and unambiguous election by insurer — PIP policy that chooses to determine reasonable charge using fact-dependant analysis while also attempting to cap payment using schedule of maximum charges does not clearly and unambiguously elect to reimburse in accordance with permissive statutory fee schedules — Approval of policy by Office of Insurance Regulation is not impenetrable proof that policy satisfies requirement to provide notice of election of fee schedule method of reimbursement

STAND UP MRI OF BOCA RATON, P.A., a/a/o Francisco Lago, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 502016SC008068XXXXSB. August 30, 2017. Reginald Corlew, Judge. Counsel: Howard W. Myones, and Melissa Bensel, Fort Lauderdale, for Plaintiff. Carlos Carmona, Plantation, FL, for Defendant.

ORDER DENYING DEFENDANT’S MOTION FORSUMMARY JUDGMENT REGARDING THEAPPLICATION OF THE FEE SCHEDULE

THIS CAUSE came before the Court on August 24, 2017, for hearing on Defendant’s Motion for Summary Judgment Regarding the Application of Fee Schedule, and the Court having reviewed the Motions, the entire Court file, the relevant legal authorities, and having heard argument of counsel, the Court finds as follows:

This case is a Petition for Declaratory relief brought by a medical provider as to the following justiciable controversies:

(a) With respect to Plaintiff’s submitted PIP and Med Pay claims, did State Farm pay the Plaintiff’s claims pursuant to the Hybrid Method, instead of the Reasonable Amount Method described in Section 627.736(1)(a) and (5)(a)

(b) With respect to Plaintiff’s submitted PIP and Med Pay claims, was State Farm lawfully permitted to use the Hybrid Method?

(c) With respect to Plaintiff’s submitted PIP and Med Pay claims, was State Farm required to pay such claims in accordance with the Reasonable Amount Method described in Section 627.736(1)(a) and (5)(a), instead of the Hybrid Method or the Fee Schedule Method described in Section 627.736(5)(a)l-5?

(d)With respect to Plaintiff’s submitted PIP and Med Pay claims, was State Farm required to pay such claims in accordance with the Fee Schedule described in Section 627.736(5)(a)1-5, instead of the Hybrid Method?

(e) With respect to Plaintiff’s submitted PIP and Med Pay claims, was State Farm authorized to rely on MPPR, or is MPPR prohibited by Section 627.736(5)(a)(3) as a limitation on the number of treatments or other type of utilization limit?

On April 17, 2017, the Defendant filed its Motion for Summary Judgment asking the Court to determine that State Farm’s 9810A Policy Form complies with the provisions of the 2012 PIP Statute regarding notice of its election to limit payment based upon the schedule of maximum charges found in §627.736(5)(a)(1). This Court finds that State Farm’s 9810A policy form does not properly elect the permissive payment methodology found in Fla. Stat. §627.736(5)(a)(1) as the policy form clearly elects the fact-dependent methodology found in §627.736(5)(a) and does not state in mandatory language that benefit payments must or will be made in accordance with the schedule of maximum charges found in §627.736(5)(a)(1). See Allstate Ins. Co. v. Orthopedic Specialists, 212 So.3d 973, 979 (Fla. 2017) [42 Fla. L. Weekly S38a].

On page 14 of its 9810A Policy form, Insuring Agreement, the policy 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. . .”

Later, on page 16, under the Limits section, the policy states:

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”. . .

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. . .

Finally, on Page 4, State Farm’s policy defines reasonable charge as follows:

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;

6. Other information relevant to the reasonableness of the charge for the service, treatment or supply;

7. Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, if the coding policy or payment methodology does not constitute a utilization limit.

The PIP statute sets forth a basic coverage mandate — PIP insurers are required to reimburse eighty percent of reasonable expenses for medically necessary services. Geico Gen. Ins. Co. v. Virtual Imaging Services, 141 So.3d 147, 155 (Fla. 2013) [38 Fla. L. Weekly S517a] (See Orthopedic Specialists, 212 So.3d 973, 976). “There are two different methodologies for calculating reimbursements to satisfy the PIP statue’s reasonable medical expenses coverage mandate.” Virtual Imaging at 156. The first, basic methodology is a fact-dependent inquiry determined by various factors found in Fla. Stat. §627.736(5)(a) (2013). Under the second, alternative/permissive payment methodology, insurers may limit reimbursement to a schedule of maximum charges found in Fla. Stat. §627.736(5)(a)(1). An insurer must clearly and unambiguously elect the permissive payment methodology for calculating reimbursements in order to rely on it. Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63, 68 (Fla 4th DCA 2011) [36 Fla. L. Weekly D1062a].

In its 9810A policy, State Farm has clearly chosen to determine a reasonable charge using the fact-dependent analysis found in Fla. Stat. §627.736(5)(a) in subparagraphs 1, 2, 3, 4, and 6 of its definition of reasonable charge while also attempting to cap the payment using the schedule of maximum charges. This is further supported by State Farm’s attempt to use the schedule of maximum charges as one of the factor’s they used to determine a reasonable charge, rather than the basis for calculating reimbursements. This is entirely improper and impermissible pursuant to Fla. Stat. §627.736(5)(a)(5), Kingsway Amigo, Virtual Imaging and Orthopedic Specialists.

State Farm attempts to argue that there are no longer two methodologies due to the Supreme Court’s ruling in Orthopedic Specialists. This Court disagrees. The Supreme Court clearly adopts the ruling in Virtual Imaging and holds that an insurance policy, when read as a whole, must plainly and obviously state that the reimbursements will be made in accordance with the fee schedule limitations found in §627.736(5)(a)(1). See Orthopedic Specialists, 212 So.3d 973 at 976. The Supreme Court held that Allstate’s policy language stated in mandatory language that benefit payments must or will be made in accordance with these limitations. Id. at 979. This Court holds that State Farm’s policy does not do this as State Farm has left itself the option and discretion to determine whether a charge is reasonable on a case-by-case basis rather than state that they will satisfy the reasonable expense mandate by making payment at the amount due at the schedule of maximum charges.

With regard to State Farm’s argument that the Office of Insurance Regulation (OIR) has approved its 9810A policy and that said approval constitutes a finding of compliance with the Notice requirements contained in §627.736(5)(a)(5) (2013), the Court holds that the interpretation of statutes is within the purview of the judiciary, not the legislature nor executive branch (of which OIR is a part of)¹. Therefore, OIR “approval” of the policy as a whole is not impenetrable proof that the Defendant’s policy satisfies the §627.736(5)(a)(5) (2013) notice requirements.

Based upon the foregoing analysis, and the legal authority presented to this Court, it is ORDERED AND ADJUDGED that the Defendant’s Motion is hereby DENIED.

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¹In revolutionary times, our founding fathers ultimately settled how conflicts between the branches of government would be resolved and created the separation of powers doctrine. Here, State Farm is attempting to undo 11 score and 8 years of constitutional mandate by telling this court to not follow this doctrine. However, “it is sometimes helpful to remember that statutory interpretation is not a contact sport played between the judiciary and the legislature as members of opposing teams. Statutory interpretation is an important function of the judiciary designed to facilitate the functioning of the legislature and the fulfillment of the laws and policies adopted by the legislature.” Doe v. Department of Health, 948 So.2d 803, 808 (Fla. 2d DCA 2006) [32 Fla. L. Weekly D95a].