Fourth District Court of Appeal Ruling Prohibits Personal Injury Protection (PIP) Carriers From Using Medicare Part B Fee Schedules Unless Explicitly Included In Policy Language

Kingsway Amigo Insurance Company, Appellant v. Ocean Health, Inc., a/a/o Belizaire Gomez, Case No. 4D10-4887

In a recent opinion, the 4th District Court of Appeal appears to have precluded PIP carriers from using the Medicare Part B Fee Schedules (as permitted by the Florida No Fault Act) unless explicitly included in the insurance carrier’s policy language. 

The decision affirmed a final summary judgment in favor of Ocean Health, Inc., and answered the following certified question in the negative:  “May a PIP insurer nevertheless elect to use the Medicare Part B Fee Schedules set forth in Fla. Stat. 627.736(5)(a)(2) when the subject PIP policy specifies that the PIP insurer will pay 80% of medically necessary expenses?”

In this case, the effective date of the policy was after the January 1, 2008 effective date of the “new” PIP statute that contains the provision providing the fee schedule at issue.  Both the trial and appellate courts agreed that the language in the statute providing for use of the fee schedule is permissive, not mandatory, and that the policy language provides for coverage greater than that required by the statute.  The courts ruled that under those circumstances, the terms of the policy control.  The 4th DCA held that the policy would have to explicitly reference the fee schedule calculation method in order to have the option to use that methodology rather than the calculation stated in the policy, and that this is true notwithstanding the fact that the policy and the statute specifically incorporate the provisions of the No Fault Act into each policy. 

The decision is obviously problematic for Florida auto insurers and may affect the way several carriers compute reimbursement payments.  The decision is not final until the time for rehearing expires on June 2, 2011.  It is likely that the Defendant insurance carrier will file a motion for rehearing (or rehearing en banc), and the filing of amici briefs in also expected.  The same permissive use issue is currently pending on appeal before the 3rd DCA, has been fully briefed and is awaiting decision.

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