SALTER, J.
This is another
The sole issue before the county court was one of law: did the insurer correctly apply the PIP law, as amended, in limiting reimbursement to the appellee based on the amendment and fee schedules, or was the insurer obligated to reimburse the amount claimed by the MRI provider to be "reasonable" without reference to the amendment and schedules? The county court found for the appellee, but certified to this court under section 34.017, Florida Statutes (2011), the following question:
The county court aptly observed in her final judgment that the "issue is capable of great repetition in County Courts throughout the State of Florida," that the same issue is being litigated by this PIP insurer alone, one among many, in "hundreds of lawsuits throughout different counties," and that uniformity "will serve to avoid the needless waste of judicial resources."
This court has now decided this issue, and we affirm based on that decision. Geico Indem. Co. v. Virtual Imaging
That opinion does not mean, however, that the issue is so free from debate, unimportant, or unlikely to recur as to preclude further consideration by the Florida courts. Rather, and as the county court correctly noted, this is an issue that is important, recurring, and statewide. The Legislature's amendment to the PIP statute sought to address the enormous costs and inefficiencies of the law prior to amendment. Litigation and fee-shifting to determine "reasonable" costs of standardized medical procedures should be passé by now. An MRI, for example, is now a common procedure. The medical cost accounting and national metrics supporting the Medicare Part B reimbursement figures for MRIs and other standard medical services are widely used and understood. An alternative charge based essentially on whatever the market will bear, on the other hand, invites litigation. A prevailing provider or insured may also recover attorney's fees and costs, and resolution of these disputes also requires judicial resources at the expense of all State taxpayers. All of these circumstances are contrary to the original, no-fault objectives of the PIP statute.
Specific claim comparisons from this and another case involving this issue (replicated in those PIP cases that produce claims among the "approximately 250,000 auto accidents involving personal injuries"
In MGA Ins. Co. v. All X-Ray Diagnostic Services, Case No. 3D12-414,
Finally, the Florida Supreme Court has repeatedly urged Florida courts to read statutes relating to the same subject or object in pari materia, in order to harmonize the provisions and give effect to the Legislature's intent. Fla. Dept. of Highway Safety and Motor Vehicles v. Hernandez, 74 So.3d 1070, 1075 (Fla.2011); Hill v. Davis, 70 So.3d 572, 577 (Fla.2011). Policy provisions that this and other district courts
For these reasons, as well as those enumerated by the county court in certifying this case to us, we now certify to the Florida Supreme Court the following restated question of great public importance pursuant to Florida Rule of Appellate Procedure 9.030(a)(2)(A)(v):
Final judgment affirmed; question of great public importance certified.
SUAREZ and ROTHENBERG, JJ., concur.
ROTHENBERG, J. (concurring).
I concur with the majority opinion that this Court is bound by our recent decision in Geico Indemnity Co. v. Virtual Imaging Services, Inc., 79 So.3d 55 (Fla. 3d DCA 2011) ("Geico I"). I write separately to reiterate my disagreement with the panel opinion in Geico I, which I contend was wrongly decided.
This appeal arises from an action filed by Virtual Imaging Services, Inc. ("Virtual Imaging"), a provider of magnetic resonance imaging ("MRI") services, against Geico General Insurance Company ("GEICO") to recover additional personal injury protection ("PIP") benefits. Virtual Imaging provided MRI services to Maria Tirado ("the insured") under her GEICO automobile insurance policy for injuries she sustained in an automobile accident in 2008. Under an assignment of insurance benefits, Virtual Imaging billed GEICO $3,600 for its services (two MRIs).
The insured's policy states: "[T]he Company will pay,
Relying on the fee schedule provided in section 627.736(5)(a)2.f., Florida Statutes (2008) ("the PIP fee schedule"), which states, "The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges: ... 200 percent of the allowable amount under the participating physicians schedule of Medicare Part B," GEICO reimbursed Virtual Imaging 80% of the 200% allowable under the Medicare Part B schedule. Under this formula, Virtual Imaging was reimbursed $1,987.57 (80% of $2,487.46), for its services to the insured, which was $892.42 less than 80% of the amounts Virtual Imaging charged.
Virtual Imaging filed suit against GEICO for the outstanding balance. The parties narrowed their positions to the legal
We are bound by this Court's decision in Geico I. In Geico I, the majority concluded the PIP statute provides two separate methodologies for the reimbursement of reasonable medical expenses and, because the language of subsection (5)(a)2. is permissive, the incorporation of subsection (5)(a)2. in the insureds' policies creates an ambiguity which must be interpreted in favor of the insureds. I respectfully disagree.
The 2008 version of Florida's Motor Vehicle No-Fault statute, which governs and mirrors the language in the insured's policy, mandates that PIP insurers
(emphasis added). The amended statute became effective on January 1, 2008,
Virtual Imaging argues that by utilizing the reimbursement fee schedule, GEICO breached its contract because: (A) the insured's policy makes "absolutely no reference to the new Medicare fee schedule;" and (B) an insurer may not rely on the fee schedule when reimbursing providers without including specific language in the policy stating that payment will be made pursuant to the PIP fee schedule. Essentially, Virtual Imaging contends, and the majority in Geico I held: (A) section 627.736(5) provides for two separate methodologies for reimbursement of medical costs: (1) payment of 80% of reasonable costs under subsection (5)(a)1.; or (2) payment of 80% of 200% of the allowable amount under the Medicare Part B schedule; and (B) the insurer must elect and specify which methodology it will use in the policy. I disagree.
Section 627.7407(2) states:
Additionally, in Grant v. State Farm Fire & Casualty Co., 638 So.2d 936, 938 (Fla.1994), the Florida Supreme Court specifically held that "where a contract of insurance is entered into on a matter surrounded by
"A document may be incorporated by reference in a contract if the contract specifically describes the document and expresses the parties' intent to be bound by its terms." Mgmt. Computer Controls, Inc. v. Charles Perry Constr., Inc., 743 So.2d 627, 631 (Fla. 1st DCA 1999); see also OBS Co. v. Pace Constr. Corp., 558 So.2d 404, 406 (Fla.1990) ("It is a generally accepted rule of contract law that, where a writing expressly refers to and sufficiently describes another document, that other document, or so much of it as is referred to, is to be interpreted as part of the writing."). The ability to incorporate by reference applies equally to statutes. See Century Vill., Inc. v. Wellington E, F, K, L H, J, M, & G, Condo. Ass'n., 361 So.2d 128, 133 (Fla.1978). The insured's policy states that reimbursements will be made
Consequently, the fact that GEICO's policy does not make specific reference to the Medicare fee schedule is irrelevant. Requiring GEICO to amend its existing policies, or create new ones, to incorporate a fee schedule that is already incorporated by law and by reference into the insured's policy is contrary to Florida law. See Northbrook Prop. & Cas. Ins. Co. v. R & J Crane Serv., Inc., 765 So.2d 836, 839 (Fla. 4th DCA 2000) ("Generally, all existing applicable or relevant and valid statutes, ordinances, regulations, and settled law of the land at the time a contract is made become a part of it and must be read into it just as if an express provision to that effect were inserted therein, except where the contract discloses a contrary intention.") (citation omitted).
Virtual Imaging's argument that GEICO must "elect" to use the fee schedule in
Despite the PIP statute's clear guidance, the majority in Geico I determined the PIP fee schedule's functionality is "ambiguous." "[W]hen a statute is unclear or ambiguous as to its meaning, the Court must resort to traditional rules of statutory construction in an effort to determine legislative intent." Murray v. Mariner Health, 994 So.2d 1051, 1061 (Fla.2008). The majority in Geico I purported to resolve the ambiguity "in favor of the insureds" because the policies at issue were insurance contracts. However, the majority in Geico I failed to consider that interpreting PIP insurance policies to cover "the greatest amount possible within the language of the policies" adversely affects insureds by more rapidly depleting their $10,000 coverage limit. In reality, given the prohibition of "balance billing" in section 627.736(5)(a)(5),
In addition, a study of the legislative history, which is "the polestar that guides a court's inquiry under the Florida No-Fault Law," Rodriguez, 808 So.2d at 85, confirms that the interpretation of the majority in Geico I is at odds with the legislative intent behind the enactment of the fee schedule. Virtual Imaging argues, and the majority in Geico I held, that the PIP statute merely authorizes insurers to offer policies that limit reimbursement to the PIP fee schedule. Under this reading, some insurers would offer policies electing to limit reimbursement under the fee schedule while others would not. In this free market construct, some consumers would accept such a limitation, but others would seek out insurers who do not limit their reimbursements in this way. The fallacy in this interpretation is that it describes the situation as it existed
Prior to the enactment of the fee schedule, the Florida Supreme Court in Holy Cross confirmed that PIP insurers were authorized to offer policies that limit reimbursement
Holy Cross, 961 So.2d at 335 (emphasis added).
The "factors" for determining the reasonableness of a fee that the Court referenced are found in section 627.736(5)(a)1., which has been in effect since 2003:
(emphasis added). The Florida Supreme Court's opinion in Holy Cross clearly demonstrates that prior to the enactment of the fee schedule, insurers were authorized to offer policies that contractually limit reimbursement based on the factors outlined in subsection (5)(a)1., including "federal fee schedules" such as Medicare, and consumers were free to accept or reject them.
This, however, was the system the Florida Legislature found to be broken. Indeed, the legislative history is replete with evidence demonstrating that providers abused their calculation leverage, leading to widespread fraud and inflation of prices. Prior to the fee schedule's enactment, when presented with an "unreasonable" bill, PIP insurers were often forced to pay the amount billed because their sole alternative was costly litigation. In September of 2000, Florida's Fifteenth Statewide Grand Jury issued a report titled "Report on Insurance Fraud Related to Personal Injury Protection," detailing the dilemma.
(emphasis added). The grand jury concluded its report by recommending that the Florida Legislature "[c]onsider adopting a fee schedule for reimbursement under the PIP statute similar to the schedule employed in the worker's compensation statute."
In 2001, the Florida Legislature adopted the grand jury's findings and enacted a fee schedule for a
Fla. SB 1092 (2001); Ch. 2001-271, § 1 Laws of Florida.
After several years, however, the Florida Legislature concluded that a fee schedule for only a narrow class of PIP claims was insufficient to drive down the costs of PIP. In a report commissioned in 2005 and prepared for the Florida Senate by the Committee on Banking and Insurance, the Committee found that "[p]remium rates for PIP increased significantly from 2002 to 2003," and that this increase was attributable to an "increased amount paid for the average PIP claim." Comm. on Banking & Ins., Florida's Motor Vehicle No-Fault Law, Report No. 2006-102 at 62 (2005).
To remedy this problem, the Committee recommended that the Florida Legislature:
Id. at 96-97. In making this recommendation, the Committee cited New York,
In 2007, based on the Committee's report and recommendations, the Florida Legislature enacted a fee schedule for all PIP claims. See Ch. 2007-324, § 19, Laws of Fla. (2007) (stating that the reenactment of the No-Fault Law and the creation of the PIP fee schedule "was intended to be remedial and curative in nature"). Against a backdrop of widespread billing fraud, the PIP fee schedule was designed to curtail the calculation leverage historically wielded by providers by statutorily affording insurers the unilateral option of limiting reimbursement under a safe harbor schedule of maximum charges.
In sum, the Florida Supreme Court's decision in Holy Cross demonstrates that prior to the enactment of the PIP fee schedule, insurers were authorized to do what the majority in Geico I concludes the PIP fee schedule authorizes them to now do. The Legislature, however, determined that the PIP reimbursement system as it previously existed was broken, and enacted the PIP fee schedule to cure the problem. Accepting Virtual Imaging's interpretation, therefore, would render the statute superfluous. Because "[s]tatutory language is not to be assumed superfluous" and "a statute must be construed so as to give meaning to all words and phrases contained within that statute," Terrinoni v. Westward Ho!, 418 So.2d 1143, 1146 (Fla. 1st DCA 1982), I respectfully submit that even if the PIP statute were ambiguous, the legislative history does not support the majority's interpretation in Geico I.
The majority in Geico I concluded section 627.736 provides for two separate methodologies for reimbursement: (1) payment of 80% of all reasonable medical expenses under section 627.736(1)(a); and (2) payment of 80% of the fee schedule provided in section 627.736(5)(a)2. I respectfully disagree. There is only one reimbursement methodology under the PIP statute — insurers must reimburse the insured 80% of the reasonable medical expenses incurred. To satisfy the mandatory reimbursement requirement, subsection (5)(a)1. authorizes consideration of federal and state medical fee schedules in determining what is "reasonable";
Relying on Nichols and Kingsway Amigo Insurance Co. v. Ocean Health, Inc., 63 So.3d 63
In Nichols, the Fifth District was confronted with a dispute between homeowners regarding the timing of reimbursement to insureds under Florida's sinkhole insurance provisions. The insureds' policies in Nichols required State Farm to submit payment to the insureds within sixty days of the filing of an appraisal award and State Farm's receipt of proof of loss, while section 627.707(5)(b), Florida Statutes (2007), a permissive statute that was not mentioned in the insureds' policies, enabled the insurer to withhold payment until the policyholder entered into a contract for repairs. Under the circumstances presented to the Nichols court, the insureds' policies and the permissive statute required distinct performances — payment was due sooner under the policies than under the statute. The Fifth District concluded that because the language in the statute was permissive and not in conflict with the policy language, the policy was binding on the parties to the insurance contract. Id. at 904.
In Kingsway, the Fourth District was confronted with the same legal question at issue in the instant appeal. As in Nichols, the court in Kingsway determined the insureds' policies, which mirror the PIP statute's mandatory reimbursement requirement, and the permissive PIP fee schedule, provide two distinct payment methodologies, and payment under the policies would amount to greater coverage than under the PIP fee schedule. Kingsway, 63 So.3d at 67. Applying the logic of Nichols, the Fourth District held that when the insurance policy provides "greater coverage" than the amount required by a permissive statute not mentioned in the policies, the terms of the policy will control, and if the insurer wants to utilize the permissive fee schedule, it must clearly select that payment methodology. Id.
Interestingly, although the majority in Geico I cites to Kingsway, the majority opinion conflicts with Kingsway, and is decided on completely different grounds. Although both the majority in Geico I and the Fourth District conclude that the PIP statute provides for two different methodologies for reimbursement, the Fourth District concluded that the statute's provisions are
As to the issue of "greater coverage," the majority in Geico I concluded that since the PIP fee schedule language is permissive, and because the coverage in the insureds' policies provides broader coverage than the PIP fee schedule, the policy language should control. This interpretation is premised on the notion that the insureds' policies and the PIP statute provide different reimbursement options. Specifically, the majority in Geico I states: "Geico was faced with at least two ways of reimbursing reasonable medical expenses: (a) reimbursing Virtual Imaging for 80% of
These insurance policies do not provide greater coverage than the fee schedule. The PIP statute mandates that all PIP insurers
Reading the PIP fee schedule with reference to the PIP statute's mandatory reimbursement requirement, it follows that the Legislature intended that all reimbursements under the PIP fee schedule must satisfy the mandatory reimbursement requirement. I therefore disagree with the majority's conclusion in Geico I that it is "possible to conclude that there are simply two alternatives present in the policies: that Geico will either pay 80% of reasonable medical expenses, or that it will pay 80% of 200% of the maximum allowable amount under the fee schedule." Construing the statute in such a manner creates an "absurd" situation where one of the statute's provisions plainly violates another. Since "[s]tatutes, as a rule, `will not be interpreted so as to yield an absurd result,'" State v. Iacovone, 660 So.2d 1371, 1373 (Fla.1995) (quoting Williams v. State, 492 So.2d 1051, 1054 (Fla.1986)), I disagree with Virtual Imaging's contention that the PIP statute contains two conflicting payment methodologies. There is only one payment methodology under the PIP statute — payment of 80% of reasonable medical expenses — and payment under the PIP fee schedule has been legislatively determined to satisfy this requirement.
In sum, while the policies and statute in Nichols required distinct performances, namely the submission of payment at different times, in this appeal, the insured's policy and the PIP fee schedule require the same performance — payment of 80% of reasonable medical expenses. Nichols is therefore inapplicable. Additionally, as is clear from the PIP statute's
The PIP fee schedule was incorporated by law and by reference into the insureds' policies. Consequently, the fact that GEICO did not specifically elect in the insured's policy to calculate reimbursement according to the fee schedule is of no moment. Further, because the PIP statute mandates reimbursement of 80% of reasonable medical expenses in
I concur with the majority that the issue presented in this case is of great public importance. The Legislature amended the PIP statute to include the PIP fee schedule in an effort to reduce the fraud and enormous costs associated with PIP litigation. However, contrary to the Legislature's intent, the issue presented here is being litigated in lawsuits across the state, with differing results. As an issue of great public importance, I submit that it should be resolved by our highest court.
SALTER, J., concurs.
(emphasis added).
