Microsoft Word - 13-000003AP-88B Allstate

County Civil Court: INSURANCE – Personal Injury Protection – Policy language stating that

“any amounts payable under this coverage shall be subject to any and all limitations…including,

but not limited to, all fee schedules,” was a clear election by Allstate of its intent to limit

reimbursements in accordance with the PIP permissive fee schedule. Reversed and remanded for

further proceedings. Allstate Ins. Co. v. Orthopedic Specialists, No. 13-000003AP-88B (Fla. 6th

Cir. App. Ct. December 10, 2013).

IN THE CIRCUIT COURT FOR THE SIXTH JUDICIAL CIRCUIT

IN AND FOR PINELLAS COUNTY, FLORIDA

APPELLATE DIVISION

ALLSTATE FIRE AND CASUALTY

INSURANCE COMPANY,

Appellant,

v. Ref. No.: 13-000003AP-88B

UCN: 522013AP000003XXXXCI

ORTHOPEDIC SPECIALISTS,

as assignee of Eoanna Spyropolous,

Appellee.

__________________________________/

ORDER AND OPINION

BACKGROUND

This appeal involves the interplay between two statutory provisions relating to the

method for calculating payment for Personal Injury Protection (PIP) claims: §627.736(1)(a), Fla.

Stat. (2011), which requires the insurer to pay 80 percent of reasonable and necessary medical

expenses, and §627.736(5)(a)(2), Fla. Stat. (2011), which gives the insurer the option of limiting

reimbursement to 80 percent of a stated fee schedule.

On June 9, 2011, Allstate’s insured was involved in a motor vehicle accident and

sustained injuries covered under the PIP portion of her insurance policy. The insured received

medical treatment from Orthopedic Specialists, which then sought reimbursement from Allstate.

Allstate reimbursed Orthopedic Specialists at a reduced rate pursuant to the PIP statute’s fee

schedule limitation, and Orthopedic Specialists filed suit claiming that the reimbursement

limitation was not authorized under the insurance policy.

The matter was submitted to the trial court on stipulated facts, with the sole issue being

whether the insurer was obligated to pay 80 percent of the reasonable medical expenses incurred,

or whether, by including the language of both methods of calculations in its policy, it could

choose to reimburse the lesser amount authorized by the fee schedule in section

627.736(5)(a)(2). Granting Orthopedic Specialists’ Motion for Summary Judgment, the trial

court held that Allstate’s policy did not specifically reference the permissive fee schedule

methodology of reimbursements as required by Florida’s Motor Vehicle No-Fault Law, and

therefore Allstate was required to reimburse Orthopedic Specialists at 80 percent of the

reasonable medical expenses. As the issue in this case requires the Court to interpret provisions

of the Florida Motor Vehicle No-Fault Law and review the trial court’s entry of summary

judgment, the standard of review is de novo. Allstate Ins. Co. v. Holy Cross Hosp., Inc., 961 So.

2d 328, 331 (Fla. 2007).

ANALYSIS

Subsequent to the filing of this appeal, the Florida Supreme Court, in Geico General

Insurance Company v. Virtual Imagine Services, Inc., --So. 3d --, 2013 WL 3332385 (Fla. July 3,

2013) (Virtual III), answered the certified question below in the negative:

WITH RESPECT TO PIP PPOLICIES ISSUED AFTER JANUARY 1, 2008,

MAY AN INSURER LIMIT REIMBURSEMENTS BASED ON THE

MEDICARE FEE SCHEDULES IDENTIFIED IN SECTION 627.736(5)(a),

FLORIDA STATUTES, WITHOUT PROVIDING NOTICE IN ITS POLICY OF

AN ELECTION TO USE THE MEDICARE FEE SCHEDULES AS THE BASIS

FOR CALCULATING REIMBURSEMENTS?

The Court found that there are two different methodologies for calculating

reimbursements under the PIP statute; the reasonable amount method, and the fee schedule

method. Virtual III at 17. If the insurer wishes to take advantage of the fee schedule method, it

must give notice to its insured by electing the permissive fee schedules in its policy. Id. at 4.

Quoting Kingsway Amigo Insurance Company v. Ocean Health, Inc., 63 So. 3d 63 (Fla. 4th

DCA 2011), the Court stated that “when the plain language of the PIP statute affords insurers

two different mechanisms for calculating reimbursements, the insurer must clearly and

unambiguously elect the permissive payment methodology in order to rely on it.” Id at 21. The

insurance policy at issue in Virtual III provided that GEICO would make payments as follows:

Under Personal Injury Protection, the Company [GEICO] will pay, in

accordance with, and subject to the terms, conditions, and exclusions of the

Florida Motor Vehicle No-Fault Law, as amended, to or for the benefit of the

injured person:

(a) 80% of medical expenses; and

(b) 60% of work loss; and

(d) Death Benefits.

GEICO argued that the language “in accordance with, and subject to the terms,

conditions and exclusions of the Florida Motor Vehicle No-Fault Law” incorporated the fee

schedule provision into the policy. The Court rejected this reasoning, holding that “because the

policy did not reference the permissive Medicare fee schedule method of calculating reasonable

medical expenses, GEICO was not permitted to limit reimbursements in accordance with the

Medicare fee schedules.” Id at 21.

While the Court made it clear that an insurer may not limit reimbursements based on the

Medicare fee schedules without providing notice of the fee schedule election in its policy, the

opinion gives little guidance as to what policy language would constitute sufficient notice. The

Virtual III Court was not presented with that question, as the policy at issue in both Virtual III

and Kingsway contained no reference whatsoever to the fee schedule methodology. The policy

in the instant case, on the other hand, does reference the fee schedule methodology. This court

must then determine, as have several other courts since the Virtual III opinion, whether the

language used in the Allstate policy provides proper notice of the fee schedule election as

contemplated in Virtual III.

The relevant portion of Allstate’s policy provides:

In accordance with the Florida Motor Vehicle No-Fault Law, we will pay

to or on behalf of the injured person the following benefits…

1. Medical Expenses.

Eighty percent of reasonable expenses for medically necessary medical,

surgical, x-ray, dental and rehabilitative services…

….

Compare David Wall, M.D. a/a/o Pavel Khvorostov v. Allstate Fire and Casualty Insurance Company, Case No.

13-002557-SC and 1st Open MRI, LLC a/a/o Tomas Giz vs. Allstate Fire and Casualty Insurance Company, Case

No. 2012-16952-SP-05(finding policy language identical to that in the instant case to clearly and unambiguously

elect the fee schedule methodology); with Central Florida Medical and Chiropractic Center, Inc., a/a/o Junior

Newland v. Allstate Fire and Casualty Ins. Co. and Allstate Fire & Casualty. Ins. Co. v. Neal Clinic of

Comprehensive Healthcare, P.I., Case No. 2013-AP-000005 (Fla. 1st Cir. Ct. App. Div. October 3, 2013)(finding

that policy language did not clearly and unambiguously elect the fee schedule methodology.)

Any amounts payable under this coverage shall be subject to any and all

limitations authorized by Fla. Stat. §627.736, or any other provisions of the

Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise

continued in the law including, but not limited to, all fee schedules.

Like the Court in Virtual III, the court below relied on Kingsway for the proposition that,

without specific reference in the policy to the permissive fee schedule methodology, the insurer

is required to reimburse 80 percent of reasonable medical expenses. However, unlike the

policies in Kingsway and Virtual III, which made no reference to fee schedules whatsoever, the

policy in the instant case makes specific reference to the permissive fee schedule. The policy

states that “any amounts payable under this coverage shall be subject to any and all limitations…

including, but not limited to, all fee schedules.” (emphasis supplied) The use of “shall” removes

any possible ambiguity regarding whether the fee schedule reimbursement limitations will be

applied. This is a clear election which puts the insured on notice of Allstate’s intent to limit

reimbursements in accordance with the fee schedules.

Because Allstate’s policy clearly and unambiguously elected the permissive fee schedule

payment methodology, Allstate was proper in limiting reimbursements in accordance with the

fee schedule.

Accordingly, it is

ORDERED AND ADJUDGED that decision of the lower court is REVERSED. This

matter is remanded to the lower court for any further proceedings in accordance with this

opinion, including a determination of the amount of reasonable attorney’s fees, if any.

DONE AND ORDERED in Chambers at St. Petersburg, Pinellas County, Florida, on

this _______ day of ____________ 2013.

Original order entered on December 10, 2013, by Circuit Judges Amy M. Williams,

Pamela A.M. Campbell, and Peter Ramsberger.

Copies furnished to:

ANTHONY J. PARRINO, ESQ.

REYNOLDS PARRINO SPANO, P.A.

8700 4TH STREET NORTH

ST. PETERSBURG, FL 33702

STEPHEN V. IGLESIAS, ESQ

LAW OFFICES OF STEPHEN V. IGLESIAS, P.A.

1702 NORTH FLORIDA AVENUE

TAMPA, FL 33602

DAVID M. CALDEVILLA, ESQ.

MICHAEL R. BRAY, ESQ.

DE LA PARTE & GILBERT, P.A.

POST OFFICE BOX 2350

TAMPA, FL 33601-2350