25 Fla. L. Weekly Supp. 273a

Online Reference: FLWSUPP 2503LDIAInsurance — Personal injury protection — Insurer is entitled to summary judgment determining that it has paid in compliance with Florida Statutes for medical services rendered, has not violated the statutes, and has not breached the policy of insurance sued upon — Insurer’s policy preserves and adheres to PIP statute’s basic mandate that a carrier pay 80% of reasonable charges, contains a definition of a “reasonable charge” that is consistent with the nearly identical definition in the statute, and utilizes clear and unambiguous language in adopting PIP statute’s permissive fee schedule limitation — As a matter of law, insurer’s 6126LS Endorsement which was approved by Office of Insurance Regulation, satisfies the requirement of giving notice of insurer’s intention to limit reimbursement of medical expenses by applying the schedule of maximum charges — Because insurer paid plaintiff the maximum amount as calculated pursuant to schedule of maximum charges, plaintiff is not entitled to payment of any additional PIP benefits for charges set forth in its bills — Jurisdiction over propriety of insurer’s notice rests with OIR, not with court

VALLES & ASSOCIATES REHABILITATION SERVICE, INC a/a/o Leonardo Diaz, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 13-7433 SP 26 (04). May 20, 2016. Lawrence D. King, Judge. Counsel: Fernando Pomares, Miami, for Plaintiff. Cole, Scott, & Kissane, P.A., Miami, for Defendant.

[Note: Rehearing denied 24 Fla. L. Weekly Supp. 304b]

FINAL SUMMARY JUDGMENT FOR STATE FARMMUTUAL AUTOMOBILE INSURANCE COMPANY

THIS CAUSE came before the Court on May 5, 2016, on the Motion for Final Summary Judgment filed by the Defendant, State Farm Mutual Automobile Insurance Company (hereinafter “STATE FARM”) and the Court having heard argument of counsel and having reviewed the evidence of record, states as follows:

I. UNDUSPUTED FACTS

1. LEONARDO DIAZ was involved in a motor vehicle accident on November 19, 2012, in which he sustained personal injuries.

2. Plaintiff claims in the present suit that Defendant has not paid the full amount due and owing in PIP (Personal Injury Protection) benefits for the medical services rendered on November 20, 2012 through February 4, 2013.

3. Plaintiff served its Demand Letter pursuant to Florida Statute §627.736(10) on Defendant on September 16, 2013. The total billed for the relevant dates of service was $7,110.00. The amount paid by STATE FARM was $3,066.85.

4. Plaintiff filed the Complaint on November 4, 2013, claiming, inter alia, that Defendant is in default under the terms and conditions of the state statute and policy requiring payment of 80% of Plaintiff’s full charges within thirty (30) days of presentation of said claim and therefore Plaintiff is entitled to those damages set forth in the statute to wit: penalties and interest. (¶ 8, Complaint).

5. STATE FARM responded in its Answer and Affirmative Defenses filed on or about January 24, 2014 denying the allegations of the Complaint. STATE FARM’s primary contention in its Motion for Summary Judgment is that it is allowed to limit reimbursement of Plaintiff’s charges pursuant to Fla. Stat. 627.736(5)(a).

6. The STATE FARM policy of insurance contained the 6126LS Amendatory Endorsement, effective on and after November 1, 2012, which states in pertinent part that 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. However, if such services, supplies, or care is not reimbursable under Medicare Part B, then we will limit reimbursement to 80 percent of the maximum reimbursement allowance under workers’ compensation, as determined under s. 440.13, Florida Statutes, and rules adopted thereunder which are in effect at the time such services, supplies, or care that is not reimbursable under Medicare or workers’ compensation will not be reimbursed by us. . . For purposes of the above, the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect at the time the services, supplies, or care is rendered and for the area in which such services, supplies, or care is rendered, except that it will not be less than the allowable amount under the participating physicians schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.

(emphasis added)

II. ISSUES OF LAW

A. The Standard for Granting Summary Judgment

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. Rule 1.510, Florida Rules of Civil Procedure. When the 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). Cf. Ball v. Fla. Podiatrist Trust, 620 So. 2d 1018, 1022 (Fla. 1st DCA 1993).

B.

STATE FARM is Entitled to a Summary Judgment Determining That It Has 1) Paid In Compliance With the Florida Statutes For the Medical Services Rendered, 2) Has Not Violated the Statutes, and 3) Has Not Breached the Policy of Insurance Sued Upon.

State Farm’s policy language is entirely consistent with Florida Statute §627.736(1)(a) (emphasis added) (2012 to date) [the “2012 PIP Statute”] which states:

627.736 Required personal injury protection benefits; exclusions; priority;

claims. —

(1) Required Benefits: — An insurance policy complying with the security requirements of s. 627.733 must provide personal injury protection to the named insured,. . . as follows

(a) Medical benefits. — 80% of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services if the individual receives initial services and care pursuant to subparagraph 1, within 14 days after the motor vehicle accident. . . . .(emphasis added)

Florida Statute §627.736(5)(a) (2012) further states:

(5) CHARGES FOR TREATMENT OF INJURED PERSONS.

—

(a) A physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies rendered. . . .However, such a charge may not exceed the amount the person or institution customarily charges for like services or supplies. 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.

1. The insurer may limit reimbursement to 80% of the following schedule of maximum charges:

a. For emergency transport and treatment by providers licensed under chapter 401, 200% of Medicare.

b. For emergency services and care provided by a hospital licensed under chapter 395, 75% of the hospital’s usual and customary charges.

c. For emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 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% 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% 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% 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.

However, if such services supplies, or care is not reimbursable under Medicare Part B, as provided in this sub-subparagraph, the insurer may limit reimbursement to 80% of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 and rules adopted thereunder which are in effect at the time such services, supplies, or care is provided. Services, supplies, or care that is not reimbursable under Medicare or workers’ compensation is not required to be reimbursed by the insurer.

In addition, sub-subparagraph (5)(a)5 includes the following notice provision: 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. . . . (emphasis added)

The STATE FARM policy of insurance 6126LS Amendatory Endorsement is entirely consistent and tracks the language of Florida Statute §627.736. First, the policy preserves and adheres to the PIP statutes basis mandate that a carrier pay 80% of a reasonable charge. Similarly, the STATE FARM policy contains a definition of a “reasonable charge” that is consistent with the nearly identical definition found in Fla. Stat. 627.736(5). Finally, the policy utilizes clear language in adopting the PIP statute’s permissive fee schedule limitation.

State Farm cannot be accused of having an improper “hybrid” method of reimbursement. It is not a hybrid for State Farm to contract to pay a “reasonable” amount. State Farm’s policy language is mandated by both the PIP Statute and case law. In Geico Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a] the Florida Supreme Court confirmed that an insurer must pay the covered and “reasonable” amount of medical expenses. The issue of reasonableness cannot be ignored by State Farm or excised from the 6126LS Endorsement; rather, reasonableness is a requirement of all PIP coverage:

Accordingly, the 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. This provision is the heart of the PIP statute’s coverage requirements. The question raised in a PIP dispute therefore often becomes how the insurer and the medical services provider will determine what constitutes a reasonable expense.

Virtual Imaging, 141 So. 3d at 155 (emphasis added). Thus, State Farm is not empowered to ignore the reasonableness coverage mandate; and its 6126LS Endorsement respects this coverage mandate while equally clarifying that State Farm will not pay any bill above the amount mandated by applying the Schedule of Maximum Charges.

Not only is STATE FARM’s adoption of the fee schedule limitation clear and unambiguous, but the PIP Statute’s Notice Provision, Fla. Stat. § 627.736(5)(a)5, provides a fail-safe method for PIP insurers to provide valid and binding notice of their intention to limit the payment of medical expenses by applying the Schedule of Maximum Charges. It permits an insurer to include in its policy a “notice” that it “may limit payment” pursuant to the Schedule of Maximum Charges. It further specifies that if the notice included in the policy is “approved by the office [OIR],” this “satisfies this requirement.” In other words, if an insurer submits a proposed policy form containing the notice to the OIR and the OIR approves the form, the insurer is deemed, ipso facto, to have satisfied the Notice Provision of § 627.736(5)(a)5.

This statutory language is clear and unambiguous, and, therefore, neither this nor any other court has the authority to deviate from it. See, e.g., DTRS Intercontinental Miami, LLC v. A.K. Gift Shop, Inc., 77 So. 3d 785, 787 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2773b] (quoting Park Adult Resid. Facility v. Dan Designs, 36 So. 2d 811, 812 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D1192a] (“The law is the law. It is not our job to carve exceptions into an otherwise clear and imperative statute.”); Klonis v. State, Dept. of Revenue, 766 So. 2d 1186, 1189 (Fla. 1st DCA 2000) [25 Fla. L. Weekly D2230a] (“If the statutory wording is unambiguous, then judicial inquiry is complete.”).

It is undisputed that the OIR approved State Farm’s 6126LS Endorsement pursuant to § 627.736(5)(a)5. As a matter of law, therefore, the 6126LS Endorsement “satisfies the requirement” of giving notice of State Farm’s intention to limit reimbursement of medical expenses by applying the Schedule of Maximum Charges. Because State Farm paid the Plaintiff the maximum amount as calculated pursuant to the Schedule of Maximum Charges, the Plaintiff is not entitled to the payment of any additional PIP benefits for the charges set forth in its bills.

The OIR’s jurisdiction over policy forms is beyond dispute. “The business of insurance in Florida is regulated by an extensive statutory framework.” Bristol Hotel Mgmt. Corp. v. Aetna Cas. & Surety Co., 20 F. Supp. 2d 1345, 1350 (S.D. Fla. 1998). Within this framework, the OIR has broad authority and is entrusted with the rights, powers, and duties pertaining to the enforcement and execution of the Insurance Code. See Fla. Stat. § 624.307. The Legislature has given OIR the power to adopt rules and regulations for making such laws effective, including the power to promulgate rules for policy notice requirements. See, e.g., Fla. Stat. § 627.736(5)(a)5 (notice of election of schedule of maximum charges); Fla. Stat. § 626.9201 (notice of cancellation or nonrenewal); § 627.4133 (notice of cancellation, nonrenewal or renewal premium), § 627.4143 (outline of coverage); § 627.711 (notice of premium discounts for hurricane loss mitigation); § 627.7277 (notice of renewal premium); § 627.7281 (cancellation notice); § 627.7282 (notice of additional premium). The OIR regularly publishes regulations and bulletins on insurance rates, policy forms, premiums, and underwriting rules. Indeed, State Farm’s premium rates, forms, and underwriting materials have been filed with and approved by the OIR. Accordingly, jurisdiction over the propriety of State Farm’s Notice pursuant to Fla. Stat. § 627.736(5)(A)5 rests with the OIR, not with this Court. Once this Court has determined that STATE FARM did include an election in its policy and the OIR approved the election, then the Court’s inquiry is at an end.

While the courts were left to consider fee schedule election language issued before the 2012 PIP Statute went into effect,¹ that is no longer the case. In Virtual Imaging, 141 So. 3d 147, the Florida Supreme Court reviewed the propriety of an insurer’s fee schedule election language under the prior version of the PIP Statute, Fla. Stat. § 627.736 (2007-2012). But the Court clarified that its decision does not apply to policies after the enactment of the 2012 PIP Statute — which are governed by the Notice Provision set forth in § 627.736(5)(a)5:

Because the GEICO policy has since been amended to include an election of the Medicare fee schedules as the method of calculating reimbursements, and the Legislature has now specifically incorporated a notice requirement into the PIP statute, effective July 1, 2012, see § 627.736(5)(a)5., Fla. Stat. (2012), our holding applies only to policies that were in effect from the effective date of the 2008 amendments to the PIP statute that first provided for the Medicare fee schedule methodology, which was January 1, 2008, through the effective date of the 2012 amendment, which was July 1, 2012.

Id. at 150 (emphasis added; citations omitted).

Thus, the Plaintiff’s contention that this Court must apply the teachings of Virtual Imaging that allegedly there are only two mutually exclusive payment methodologies and that a carrier must apply one to the exclusion of the other is actually specifically rejected by the Virtual Imaging opinion which specifically held that its opinion did not apply to any cases governed by the new election procedures found in Fla. Stat. 627.736(5)(a)5.

IV. CONCLUSION

STATE FARM’s Motion for Final Summary Judgment is granted and Final Judgment is entered for STATE FARM. Defendant shall go hence without day. The Court reserves jurisdiction to award costs or fees if applicable upon further timely motion.

__________________

¹See, e.g., Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63, 68 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; DCI MRI, Inc. v. GEICO Indem. Co., 79 So. 3d 840, 842 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D170e] and Allstate cases cited infra.