Florida Record

Tuesday, November 12, 2019

Florida Supreme Court to review insurance payment dispute, allows respondent reply extension

State Court

By John Breslin | Oct 15, 2019

Insurance 01

TALLAHASSEE -- A party to a Florida Supreme Court review of a dispute over insurance reimbursement payments must file a reply to the petitioner in less than two weeks.

The Supreme Court granted the petitioner, State Farm Mutual Automobile Association, an extension to file an answer to the MRI Associates of Tampa argument that an appeals panel "erroneously concluded" the insurance company was correct in its reimbursement calculations for magnetic resonance imaging of 19 people injured in vehicle accidents.

State Farm requested the extension, to Oct. 25, because its lead counsel was absent due to the Jewish holidays, a previously scheduled medical procedure and involvement in multiple federal and state court class cases.

The Supreme Court in July accepted the case for review, finding that it involved matters of "great public importance." Hillsborough County Judge Claudia Isom ruled in favor of MRI Associates, which does business as Park Place MRI in Tampa, but this decision was reversed by an appeals court.

The circuit court found that "State Farm's personal injury protection (PIP) policy failed to clearly and unambiguously elect to limit reimbursement payments to the schedule of maximum charges."

But the Second District Court of Appeals opinion, written by Judge Daniel Sleet, with Darryl Casanueva and Marva Crenshaw, now retired, concurring, noted the "express language of State Farm's PIP policy does clearly and unambiguously elect to limit reimbursement payments for medical expenses to the schedule of maximum charges."

The genesis of the legal action dates from automobile accidents in 2013 that led to 19 PIP claims. Each of the individuals received MRIs at Park Place MRI.

Park Place submitted bills to State Farm, which paid a certain amount based on its reading of the insurance policies, but not the total requested. Park Place disagreed, and the insurance company asked the trial court to decide whether it was correct under various Florida statutes.

Park Place filed a countersuit, asking the court for an injunction to stop State Farm from limiting payments.

The discussion at both trial and appeals court levels began with a 1971 law, the Florida Motor Vehicle No-Fault Act, that allows "medical, surgical, funeral, and disability insurance benefits without regard to fault[] and to require motor vehicle insurance securing such benefits."

But the core argument related to updates to that statute, most notably ones passed in 2008 and 2013 that cover PIP payments.

State Farm argues that its calculations were correct and that the policies at issue clearly limit its maximum payment to 80 percent of the total amount of cost. Park Place alleged the insurance calculated the amount using an "unlawful hybrid method." The appeals court sided with State Farm.

"The mandate that an insurer reimburse a percentage of the reasonable expenses for medically necessary services 'is the heart of the PIP statute's coverage requirements,'." Sleet wrote, citing precedent.

The judge added, "Under the 2013 version of the PIP statute, an insurer is required to pay the reasonable charges for medically necessary services … However, it may elect to limit its payment using the schedule of maximum charges. 

"Accordingly, we reject Park Place's argument that State Farm's policy contains an 'unlawful hybrid method' of reimbursement calculation and is therefore impermissibly vague."

State Farm's inclusion of the statutory factors in its definition of reasonable charges tracks the PIP statute and is not inconsistent with the policy language limiting reimbursement to the schedule of maximum charges."

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