Fourth District Court of Appeals rules for the insurance company and is critical of the provider’s strained analysis in alleging an ambiguity in the policy language.

Recently the Fourth District Court of Appeals issued its opinion in Plantation Open MRI v. Infinity Indemnity Insurance Company which ruled favorably for the insurer on whether a PIP insurance policy requires the insurer to pay more than 80% of the statutory fee schedule if one part of the policy has payment method for PIP and another part of the policy dealing with the deductible has another method for payment. The court was critical of the provider’s strained analysis in alleging an ambiguity in the policy language.

The policy contained one section that ” reimbursement for medical expenses/PIP benefits shall not exceed 80% of the schedule of maximum charges set forth in the Florida PIP statute 67.736 (5) (a)” as is standard policy language for the proper payment of PIP medical expenses. However in another part of the policy was a provision dealing with the deductible and stated that if ” the total loss exceeded the deductible then the insurance company was required to pay the difference between the deductible amount and the total amount of medical bills subject to the limitations of the $10,000 in coverage”. In essence the second provision dealing with the deductible could potentially require the insurance company to pay all $10,000 minus only the deductible, thus creating two different payment methods within the policy. The providers jumped on this discrepancy and indicated that all bills should be paid at 100% subject only to the deductible reduction.

The provider contended that Infinity’s policy created an ambiguity requiring the insurer to pay full reimbursement for the cost of medical services. The language relating to medical expense payments was as follows:
“ the insurer will pay, in accordance with the Florida Motor Vehicle No-Fault Law, personal injury protection benefits to or for the benefit of an insured who sustains bodily injury” as follows:
Reimbursement for medical expenses shall be limited to and shall not exceed 80% of the schedule of maximum charges set forth in Section 627.736(5)(a)[1.,] Florida Statutes.”

The other part of the policy under the “limits of liability” section which creates the controversy for the appeal states the following:

“The amount of any deductible stated on the Declarations Page shall be deducted from the total amount of all loss and expense incurred by or on behalf of each person to whom the deductible applies and who sustains bodily injury as the result of any one accident. If the total amount of such loss and expense exceeds such deductible, the total limit of benefits we are obligated to pay shall then be based on the difference between such deductible amount and the total amount of all loss and expense incurred, subject to the $10,000 limit of benefits. Such deductible shall not apply to death benefits.”

The insurance company paid the PIP demand at 80% of the statutory fee schedule provided by section 627.736(5)(a)1. The various providers in this consolidated appeal filed Motions for Summary Judgment claiming that Infinity owed 100% of the amount billed. Infinity filed its own motions for summary judgment contending that it only was responsible for the 80% of the statutory fee schedule as required under the PIP statute. The County Court agreed with Infinity but certified the following question to the Fourth District:

“whether a PIP insurance policy requires the insurer to pay more than 80% of the statutory fee schedule if it includes provision for the total limit of benefits the insurer is obligated to pay based on the difference between the deductible and the total amount of all expense incurred, subject to the $10,000 limit of benefits.”

The appellate court agreed with the lower court. It indicated that the policy was not ambiguous as the policy plainly provides for the insurer to limit reimbursement to 80% of the statutory fee schedule. They indicated that when you read the policy in its entirety, the section in dispute clearly limits the overall liability and explains how any applicable deductible is applied. It does not create a separate payment obligation. The court indicated that plaintiff was improperly interpreting “total” and “benefits.”

The court determined that using proper grammar to give these terms meaning interprets the section to be limited as otherwise set forth in the policy. It does not create a separate or independent obligation to pay under a different methodology, nor any right to collect up to the maximum amount, without regard to the limitations otherwise contained in the policy and the statutory fee schedule. When you read the policy in its entirety, the only reasonable interpretation of the policy’s plain language is that the aggregate of expenses and losses, after any applicable deductible, reimbursed at 80% pursuant to statutory fee schedule, cannot exceed the $10,000 limit. The court found to interpret a policy you must read it in its entirety. A true ambiguity does not exist merely because a contract can possibly be interpreted in more than one manner. Without a genuine inconsistency, a court is not allowed to rewrite contracts or add meaning that is not present. The court’s decision here reinforces the long-term policy that the maximum payments under PIP are those set forth in the PIP statute which is 80% of 200% of Medicare. The court refused to read the deductible portion of the policy to be ambiguous and instead focused on the primary language of the policy that memorialized proper PIP payments to be “reimbursement for medical expenses limited to and not to exceed 80% of the schedule of maximum charges set forth in Florida PIP statute 67.736 (5) (a).”