Florida Supreme Court Rules on District Court Split Regarding Personal Injury Protection Reimbursement for Medical Expenses

After caring for an injured car accident patient, hospitals look for the most expedient, maximized reimbursement available to them for payment. Personal Injury Protection (PIP) was created by the legislature, as part of the Florida Motor Vehicle No-Fault Law, to help ensure quick care for the injured person and prompt payment to the medical provider. Over the last two years, state district courts have been split over whether or not an auto insurer’s inclusion of the permissive Medicare fee schedule for reimbursement within its auto policy was sufficient notice of an election to use section 627.736(5)(a)(2), Florida Statutes (2009). The matter was recently settled by the Supreme Court in Allstate Ins. Co. v. Orthopedic Specialists (No. sC15-2298).

This appeal arose from the Fourth District, in which several medical services challenged an insurer’s reimbursements made under PIP no-fault insurance policies issued to its insured. The providers claimed the policy was ambiguous on whether the insurer was using the Medicare fee schedule allowed by law, or if it only reserved the right to elect to do so. The medical providers argued that the “shall be subject to” language made the policy ambiguous. The language of the policy stated it would pay 80% of all reasonable expenses for medically necessary services, but it was followed by the Limits of Liability, which stated that the coverage “shall be subject to any and all limitations, authorized by section 627.736.”  The providers and the Fourth District felt that Florida case precedent determined that any election of a payment limitation option must be done so “clearly and unambiguously” and that the policy fell short of doing so.

The Supreme Court first looked at case law guiding any analysis of an insurance policy contract. If the language is considered unambiguous, the court is bound to interpret the policy according to the plain meaning of the language. A policy is only considered vague if there can be more than one reasonable interpretation, when one provides coverage and the other limits coverage. Ambiguous language in an insurance policy is construed against the insurance company that drafted it and in favor of the insured.

The Supreme Court determined that the PIP policy in this lawsuit provided legally sufficient notice of the insurer’s election to use the permissive Medicare fee schedule to limit reimbursements. The court felt that when read in context and as a whole with the insurer’s policy, the meaning was plain and obvious that the reimbursements will be made using the fee schedule limitations. The providers had argued that the language contradicts itself by first stating that 80% shall be paid and then that a limitation shall also be used. The court disagreed, reasoning that the first part of the policy is statutory language that the insurer must follow, and it was not persuaded by the argument that “subject to” is permissive rather than mandatory. The court felt that when read as a whole, the “shall be subject to” phrase is a mandatory command. The Fourth District’s decision was reversed, and the conflict issue found in the First District case was upheld.

A Florida car accident personal injury attorney at Donaldson & Weston can help you wade through the complexities of auto insurance policies to help maximize the benefits or damages you seek. Contact the office today at 722-266-5555 or 561-299-3999.