27 Fla. L. Weekly Supp. 7a

Online Reference: FLWSUPP 2701BARRInsurance — Personal injury protection — Coverage — Medical expenses — Reasonableness of charges — Summary judgment — Error to enter summary judgment in favor of medical provider on issue of reasonableness of MRI charge where opposing affidavit filed by insurer created disputed issue of material fact — Trial court erred in rejecting opinion of insurer’s expert on basis that he referenced Medicare fee schedules in his affidavit when fee schedule method of reimbursement was not elected in policy

UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Appellant, v. MIAMI DADE COUNTY MRI, CORP., a/a/o Tania Barrios, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case Nos. 15-431 AP, 17-328 AP (consolidated). L.T. Case No. 12-17537 SP 23. March 5, 2019. An appeal from the County Court for Miami-Dade County. Counsel: Michael J. Neimand, Office of the General Counsel, United Automobile Insurance Company, for Appellant. Marlene S. Reiss, Law Offices of Marlene S. Reiss, P.A., for Appellee.

(Before MIRANDA, SIMON and REBULL, JJ.)

(MIRANDA, J.) Appellee/Assignee Miami Dade County MRI, Corp., (“provider” or Appellee) sued Appellant United Automobile Insurance Company (“United Auto” or insurer), for personal injury protection (“PIP”) automobile insurance benefits. The Assignee/Provider was acting as the assignee of Tania Barrios, who was injured in a November 26, 2009 car accident. The provider had performed a diagnostic MRI test on Ms. Barrios and billed the insurer $1,825.00 for the MRI. The insurer paid $981.28, an amount based on reducing the bill to 200% of the Medicare Part B Fee Schedules and paying 80% of that amount. The insurer had not elected the Medicare Part B Fee Schedule in its policy as a reimbursement method, pursuant to §627.736(5)(a)2.f, Fla. Stat. (2008). The provider sued for the difference between its billed charge and the amount paid by United Auto. United Auto filed its answer wherein it denied that the charge for the treatment was reasonable. The provider moved for summary judgment contending that the charge was indeed reasonable. In support of its motion, the provider filed, among other supporting documents, the affidavit of Llina Milian, its operations manager, who stated the reimbursement amount was too low, as its charges for the MRI were reasonable. In opposition to the motion, United Auto filed, among other supporting documents, the affidavit of Dr. Edward A. Dauer, who opined that the charges were not reasonable, but instead were excessive and significantly higher that a charge for that type of diagnostic service should have been.

The trial court heard the motion for summary judgment and subsequently entered an order granting the motion for the provider. United Auto appeals, and argues that the trial court erred in disregarding the affidavit submitted in opposition to the provider’s motion for summary judgment. The insurer argues that Dr. Dauer’s affidavit created a material issue of fact which should have precluded summary judgment. We agree and reverse.

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. Fla. R. Civ. P. 1.510(c). Dade County Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 643 (Fla. 1999) [24 Fla. L. Weekly S216a].

To the extent that the trial court rejected Dr. Dauer’s opinion as to reasonableness based upon his reliance on Medicare fee schedules, such rejection was error. The Eleventh Circuit Appellate Panel decision, State Farm Mutual Automobile Insurance Co. v. Health & Wellness Associates, Inc. a/a/o Scott, 25 Fla. L. Weekly Supp. 220a (Fla. 11th Cir. App. Div. May 24, 2017), indicated that it was not error for an expert to reference Medicare fee schedule payment amounts, even when the insurance company failed to elect the reimbursement method set forth in Florida Statute section 627.736(5)(a).¹ When an insurance company does not elect in its policy to use section 627.736(5)(a)2 to calculate a reasonable fee, it may use section 627.736(5)(a)1, which allows various fee schedules applicable to insurance as one of the factors that may be considered in determining whether a fee is reasonable, and the Medicare fee schedule is a fee schedule applicable to automobile insurance coverage. Moreover, several recent opinions of appellate panels of this Court have determined that it was not error for an expert to reference Medicare fee schedule payment amounts, even when the insurance company failed to elect the reimbursement method set forth in Florida Statute section 627.736(5)(a). See State Farm Mut. Auto. Ins. Co. v. Rivera-Morales, M.D. a/a/o Ullah, 26 Fla. L. Weekly Supp. 469a (Fla. 11th Jud. Cir. June 20, 2018); State Farm Fire and Cas. Ins. Co. v. Rivera-Morales a/a/o Dimanche, Case No. 15-341 AP (Fla. 11th Jud. Cir. May 11, 2018); State Farm Mut. Auto. Ins, Co. v. AlA Mgmt. Servs., LLC d/b/a Roberto Rivera-Morales, M.D. a/a/o Muselair, 25 Fla. L. Weekly Supp. 860a (Fla. 11th Cir. Ct. Oct. 25, 2017); State Farm Mut. Auto. Ins. Co. v. Gables Ins. Recovery, Inc., 25 Fla. L. Weekly Supp. 857a (Fla. 11th Cir. Ct. Sept. 28, 2017); State Farm Mut. Auto. Ins. Co. v. Health & Wellness Assocs., Inc., (Fla. 11th Cir. Ct. May 24, 2017) [25 Fla. L. Weekly Supp. 220a]; State Farm Mut. Auto. Ins. Co. v. Gables Ins. Recovery, Inc. a/a/o Yanai Torres, 26 Fla. L. Weekly Supp. 706a (Fla. 11th Cir. Ct. Oct. 25, 2018).

The Medicare fee schedule was first mentioned in the PIP statutes in the version of section 627.736(5)(a) that was effective from January 1, 2008 to June 30, 2008. Subsection (5)(a)1 of the 2008 version of the statute provided, in relevant part, that:

With respect to a determination of 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, and reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.

Subsection (5)(a)(2)(f) provided that “The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges: . . . 200 percent of the applicable Medicare Part B fee schedule.” The subsection has been amended somewhat at various times since 2008, but each amendment has continued to utilize the Medicare Part B fee schedule in its formula.

In Geico General Ins. Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a], the Florida Supreme Court analyzed section 627.736, including subsections (5)(a)(1) and (5)(a)(2). The Court explained that section 627.736 requires the insurer to pay for reasonable expenses for medically necessary services, and provides two methods for calculating a reasonable payment. It explained that one method is set forth in subsection (5)(a)1, which creates a fact-dependent analysis, allowing the consideration of various factors (including usual and customary charges and payments accepted, fee schedules, and other relevant information) to determine the reasonableness of fees. Id. “Subsection (5)(a)2, however, provides an alternative mechanism for determining reasonableness: by reference to the Medicare fee schedules. This provision, adopted in the 2008 amendments, states that an insurer “may limit reimbursement’ . . to ‘200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.’ ” Id. (emphasis in original, alteration added.) Therefore, “the 2008 amendments provided an alternative, permissive way for an insurer to calculate reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate, but did not set forth the only methodology for doing so.” Id.

Thus, there are two permissible methods for calculating the reasonableness of charges under the PIP statute: the first method is to use the factors set forth in section 627.736(5)(a)1 (including “various federal and state medical fee schedules applicable to automobile and other insurance coverages”) to determine what a reasonable charge would be; and the second method is to utilize only the fee schedule payment calculation methodology set forth in section 627.736(5)(a)2.

In order to utilize the methodology set forth in section 627.736(5)(a)2, which determines reasonableness by using a formula based solely upon the Medicare fee schedule, “the insurer must provide notice in the policy of its election to use the fee schedules.” Id. If the election is made, then the calculation of the reasonable amount to pay for medical services is simple, as the statute conclusively provides that the insurer simply pays exactly eighty percent of 200 percent of whatever price is listed on the Medicare Part B Fee Schedule. If the election is not made as in this case, then the section 627.736(5)(a)2 formula utilizing Medicare Part B schedule amounts cannot be used to conclusively determine a reasonable amount for fees.

But, despite an insurer’s “failure to elect to use the fee schedule limitation in its policy, it is not precluded from having an opportunity to litigate the reasonableness [of the providers’] bill under section 627.736(5)(a)1., Florida Statutes (2008).” Progressive Select Ins. Co. v. Emergency Physicians of Central Florida, LLP, 202 So. 3d 437, 438 (Fla. 5th DCA 2016) [41 Fla. L. Weekly D2145a]. Section 627.736(5)(a)(1) states that an Insurer may consider any factor in the provided list. One of the factors in the list is “various federal and state medical fee schedules applicable to automobile and other insurance coverages.” Black’s Law Dictionary defines “applicable,” in part, as “[c]apable of being applied . . . .” Black’s Law Dictionary (10th ed. 2010) at 120. Since the Medicare Fee schedule has been capable of being applied to determine reasonableness since 2008, that the Medicare fee schedule is applicable to PIP coverage. As such, the Medicare fee schedule is one of the factors that may be considered when making a reasonableness determination under section 627.736(5)(a)(1).

Appellee argues that Medicare fee schedules cannot be used as a part of the 627.736(5)(a)(1) methodology, relying on cases providing that Medicare is not insurance and should not be used in a determination of a reasonable amount for medical services. The supporting cases include Atkins v. Allstate Insurance Co., 382 So. 2d 1276 (Fla. 3d DCA 1980), which stated that that “Medicare is a social welfare program and not an insurance or reimbursement plan within the everyday and ordinary meaning of those terms,” and Hialeah Medical Associates, Inc. a/a/o Lexcano v. United Auto. Ins. Co., 21 Fla. L. Weekly Supp. 487b (Fla. 11th Cir. March 7, 2014). Lexcano, a case decided by a previous appellate panel of this Court, stating that “Medicare Fee Schedules are not relevant in PIP cases, and should not be used.” Lexcano, however, acknowledges the 2008 amendments allowing the use of such fee schedules, and notes that the insurance policy at issue in the case was issued in 2007 prior to the change in the law, before concluding that United was prohibited from relying on the 2008 Medicare Fee Schedule.

The case law providing that Medicare is irrelevant to insurance is now outdated. Medicare may have been irrelevant to PIP policies issued prior to the year 2008, but as noted above, the PIP statute was amended in 2008 to specifically include the use of the Medicare fee schedule to determine reasonableness under section 627.736(5)(a)2. The PIP statute continues to reference Medicare Part B to this day. Thus, as noted, the Medicare Fee schedule has been capable of being applied to determine reasonableness since 2008, so it is proper to utilize Medicare Part B fee schedules in cases involving policies that were issued after the 2008 amendment became effective.

Thus, when an insurer argues reasonableness under subsection 627.736(5)(a), it may utilize in its argument any of the factors listed in that subsection, including the Medicare Part B fee schedule as one of the “various federal and state medical fee schedules applicable to automobile and other insurance coverages.” Accordingly, the trial court was incorrect to find Dr. Dauer’s Affidavit was insufficient because it referenced Medicare. Accordingly, we reverse and remand to the trial court for proceedings consistent with this opinion.

SIMON and REBULL, JJ., concur.

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¹Section 627.736(5)(a)2 allows 80 percent of 200 percent of the Medicare fee schedule amount to be conclusively determined to be the reasonable amount of payment when an insurance provider has made a proper election in its policy.