Category Archives: The Statutory “Fee Schedules”

1st DCA Upholds Allstate Use of Medical Fee Schedules

In an opinion filed March 18, 2015, Florida’s First District Court of Appeal held that language in an Allstate Insurance Co. policy gave sufficient notice to an assignee of its election to use Medicare fee schedules to limit benefit reimbursements under a PIP policy. Stand-Up MRI of Tallahassee, an assignee of 14 named insureds, sued Allstate in county court, contending that Allstate’s alleged failure to give adequate notice was contrary to the Florida Supreme Court’s decision in Geico v. Virtual Imaging. The trial court agreed with Stand-Up MRI and certified a question of great public importance to the Appellate Court.

In Virtual Imaging, as here, an MRI provider had supplied services and then disputed the insurer’s authority to limit reimbursements under Medicare fee schedules. Pursuant to the Florida PIP statute, automobile insurers are required to provide PIP coverage for 80 percent of all “reasonable expenses” for medically necessary services.

The dispute here centers on whether Allstate’s policy language provided adequate notice of its election to limit reimbursements via the Medicare fee schedules or if, as Stand-Up MRI contends, the policy fails because it is ambiguous. Allstate points to the following language in the policy as having satisfied the Virtual Imaging notice requirement:

In accordance with the Florida Motor Vehicle No-Fault Law, [Allstate] will pay to or on behalf of the injured person the following benefits. . . .

Medical Expenses

Eighty percent of reasonable expenses for medically necessary … services. …

Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to, all fee schedules.

The appellate court agreed with Allstate, concluding that the policy gives sufficient notice of its election to limit reimbursements by use of the fee schedules. In making its decision, the court pointed to language in the policy stating that reimbursements “shall” be subject to the limitations of §627.736, including “all fee schedules.”

Section 627.736(5)(a) 2 refers to Medicare fee schedule-based limitations and provides that insurers “may limit reimbursement to 80 percent of the … schedule of maximum charges.” Thus, concluded the court, the notice requirement was satisfied by Allstate’s language limiting “any amounts payable” to the fee schedule-based limitations found in the statute.

Furthermore, the court also distinguished the language in Allstate’s policy from that found deficient in Virtual Imaging. There, the Florida Supreme Court concluded that Geico’s policy failed to “indicate in any way” that it intended to limit its reimbursement amounts using the fee schedules. Here, Allstate’s policy expressly limits reimbursements by “all fee schedules” in the statute, satisfying the Virtual Imaging notice requirement.

Stand-Up MRI also contended that Allstate’s use of the phrase “subject to . . . all fee schedules” fails to provide sufficient notice that reimbursements will always be limited by the fee schedules, arguing that “subject to” means only that Allstate had the option to limit reimbursements per the Medicare fee schedule , not that it would so limit reimbursements. The court, however, found no such ambiguity, stating that the language of the policy makes reimbursements subordinate to the fee schedule in “rather unmistakable terms.”

In sum, the court concluded that Allstate’s policy language gave legally sufficient notice to its insureds of its election to use the Medicare fee schedules as required by Virtual Imaging. The trial court’s decision was reversed and the case remanded for further proceedings.

The cases cited are listed below for reference.

Allstate Fire and Casualty Ins. v. Stand-Up MRI of Tallahassee, Case No. 1D14-1213, et al., 1st DCA Fla. (March 18, 2015).

Geico Gen. Ins. Co. v. Virtual Imaging Servs. Inc., 141 So. 3d 147 (Fla. 2013).

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Filed under Fla. Stat. 627.736 (2012), The Statutory "Fee Schedules"

Miami Court Rules on Reasonable and Unreasonable Charges

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.

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Filed under Case Law, The Statutory "Fee Schedules"

Two Favorable PIP Rulings for Mercury Insurance

Medicare Part B and other statutory fee schedules were permitted as a basis for reimbursement in the recent case Timothy M. Kehrig, DC, P.A. v. Mercury Insurance Company of Florida, heard by a Palm Beach County court.

The plaintiff filed suit charging that Mercury did not pay 80% of the amount billed for medical services. Rather, the defendant determined payment by calculating 80% of 200% of the charges allowed in the Medicare Part B fee schedule.

The question in dispute was whether Mercury could pay benefits in accordance with the fee contained in Fla. Stat. §627.736(5)(a)(2) (2008) and the policy.

The court ruled that Mercury could limit payment in accordance with statutory fee schedules.

Separately, a Pinellas County court recently permitted Mercury to limit payment by using statutory fee schedules in the PIP dispute Orthopedic Specialists v. Mercury Insurance Company of Florida.

The case related to a 2011 injury in which Mercury reimbursed the medical services provider at a rate of 80% of 200% of the benefits available under Medicare Part B.

“Medical benefits” were defined in the policy as meaning “eighty (80%) percent of all reasonable expenses allowed by the No-Fault Law, subject to the applicable fee schedules and payment limitations, for medically necessary …”

The court cited Geico General Ins. Co. v. Virtual Imaging Services, Inc., stating that the description of medical benefits payment “is not inconsistent with application of the fee schedules and limitations.”

Case Documents

Click on the link to read the Final Judgment for Defendant in the matter Timothy M. Kehrig, DC, P.A. v. Mercury Insurance Company of Florida, (Case No. 50-2011-SC-008363).

Click on the link to read the Final Summary Judgment in the matter Orthopedic Specialists v. Mercury Insurance Company of Florida, (Case No. 13-000073-SC).

Both cases involved a “U85 (05/2010)” endorsement to the policy.

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Filed under Case Law, Fla. Stat. 627.736 (2008), The Statutory "Fee Schedules"

Medicare Fee Schedules Must Be Disclosed in PIP Policies

The Florida Supreme Court recently ruled in Geico General Insurance Company v. Virtual Imaging Services, Inc. that insurance companies offering PIP policies must notify their policyholders if they plan to use Medicare-based fee schedules payment formulas.

The case arises from a September 2008 auto accident, following which the insured received medical treatments. GEICO acknowledged that the MRIs received were medically necessary, reasonably priced, billed in a timely manner, and covered by the policy. However, GEICO limited reimbursement to 80% of 200% of the Medicare fee schedule.

Justice Pariente explained that the PIP statute allows insurance companies to use the Medicare-based fee schedules to calculate payment, but it does not mandate it. The statute merely gives providers the option to use this lower payment system.

In footnote 8, the Court provides some background on a related case:

In Allstate Fire & Casualty Insurance Co. v. Perez ex rel. Jeffrey Tedder, M.D., P.A., 111 So. 3d 960, 962 (Fla. 2d DCA 2013), the Second District Court of Appeal characterized the fee schedule amendments as allowing an insurer to “either pay reasonable medical expenses as provided in subsection (5)(a)(1), or . . . limit reimbursement according to the parameters of subsection (5)(a)(2).”

Although we agree that there are two payment methodologies for satisfying the PIP statute’s coverage mandate, we emphasize that we do not conclude that limiting reimbursement pursuant to section 627.736(5)(a)2. would never satisfy this reasonable medical expenses coverage mandate. In fact, that is the very reason we rephrased the certified question in this case.

This issue was certified to the Florida Supreme Court by the Third District Court of Appeals (“3rd DCA”) after noticing that similar issues were being raised in Florida courts statewide. The initial decision by the 3rd DCA was consistent with the other districts which have already decided on such issues. The Florida Supreme Court decision affirmed the decisions of all the DCAs that PIP insurance providers must notify policyholders by an election in their policy if they plan to use Medicare-based fee schedules.

Lastly, the Florida Supreme Court noted that because the PIP statute incorporated the Medicare-fee schedules as an option for payment only in the 2008 revision of the statute, this decision applies only to policies which were in effect beginning January 1, 2008.

The majority opinion in the 5 to 2 decision was written by Justice Pariente, with Justices Quince, Lewis, Labarga, and Perry concurring. Justice Canady wrote a dissenting opinion, with Justice Polston concurring.

To read the full opinion click here: Geico General Insurance Company v. Virtual Imaging Services, Inc., No. SC12-905, dated July 3, 2013.

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Filed under Fla. Stat. 627.736 (2008), Fla. Stat. 627.736 (2012), The Statutory "Fee Schedules"

Insurance Information Institute Comments on PIP Premium Changes and Significance of the January 1, 2013 Effective Date of 2012 PIP Law Changes

Tampa Bay Fox 13 recently featured a segment regarding the effect of House Bill 119, the 2012 PIP law change, on PIP premium rates.  Lynne McChristian of the Insurance Information Institute, shed some light what appears to be a lack of a premium decrease.  McChristian indicates that the recent insurer reports are not indicative of what could likely be the case after January 1, 2013, when all of HB119’s changes take effect.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud, Licensing, The Statutory "Fee Schedules"

Trial Advocate Quarterly Features Article on 2012 Florida PIP Law Changes by Mark J. Rose

Trial Advocate Quarterly

Trial Advocate Quarterly, Summer 2012

The summer 2012 of the Trial Advocate Quarterly features an article by attorney and contributor Mark J. Rose on the recent changes to Florida’s PIP/No-Fault Law including: statutory fee schedules, the “emergency medical condition” limitation, PIP payment logs, exhaustion of benefits, explanations of benefits, examinations under oat (EUO), independent medical examinations, and fraudulent PIP claims.

The article will soon be available on the Florida Defense Lawyer Association (FDLA) website at  Requests for full copies of the article or for more information on the recent Florida PIP law changes, please contact Mark Rose ( or Michael Rosenberg (

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Filed under Examinations Under Oath (EUO), Fla. Stat. 627.736 (2012), Independent Medical Examinations (IME), Insurance Fraud, Licensing, The Statutory "Fee Schedules"

State Hires Pinnacle Actuarial Resources to Analyze Impact of Florida PIP Law Changes

On Tuesday the Florida Office of Insurance Regulation (OIR) signed a $150,000 contract with the independent firm Pinnacle Actuarial Resources, to evaluate the impact of the recent changes to Florida’s PIP law.  The review, headed by former Insurance Services Office (ISO) employee LeRoy Boison, was commissioned as a part of the recent PIP law changes which permitted the OIR to spend up to $200,000 on the study.  Pinnacle was selected out of 37 vendors, three of which including Milliman, Melinos, and Pinnacle submitted proposals.   The findings from Pinnacle are due no later than September 15, 2012.

The full article from Florida Health News is available here.

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Filed under Examinations Under Oath (EUO), Fla. Stat. 627.736 (2012), The Statutory "Fee Schedules"