In an October 8, 2013 ruling in the matter New Medical Group, Inc. vs. United Automobile Insurance Company by Judge King in the County Court of Miami-Dade County, the court held that an insurer is not required to expressly elect to pay only a reasonable charge. Furthermore, the Court held that the insurer cannot be required to pay 80% of “unreasonable” charges simply because it did not initially elect to use the fact-dependent reasonableness standard.
Pursuant to the Florida PIP statute, two alternative methodologies exist to determine whether a medical provider’s charges are reasonable. In the first, reasonableness is a fact-dependent inquiry determined by consideration of various factors, including state and federal fee schedules. Section 627.736(5)(a)1. Alternatively, the insurer may limit reimbursement to the provided fee schedules, thereby avoiding submission of the reasonableness issue to the trier of fact. (5)(a)2.
In Geico Gen. Ins. Co. v. Virtual Imaging Servs, Inc., the Supreme Court held that the insurer cannot limit reimbursement to the fee schedules pursuant to (5)(a)2 unless it makes an express election in its policy to do so. This methodology is considered “permissive.” To the contrary, the reasonableness determination in (5)(a)1 is mandatory, not permissive, and is considered the “default methodology.” A PIP insurer is not required to expressly elect to pay only a reasonable charge.
Concerning the determination of the reasonableness of charges, the PIP statute expressly prohibits medical providers from submitting unreasonable charges. (5)(a)1. The burden lies with the plaintiff to prove the reasonableness of the charges. The burden of proof does not shift to the insurer to prove that the charges are unreasonable simply because they did not expressly elect (5)(a)1, which is the mandatory, default method of determining reasonableness. Thus, absent a valid election under (5)(a)2, the issue of reasonableness is a question for the trier of fact under the methodology described in (5)(a)1.
The case is New Medical Group, Inc. v. United Automobile Insurance Co., Civil Division Case No. 11-01870 SP 26 (Fla. Miami-Dade Cty. 2013). Click on the link to read the Judge’s Order.