Fla. Supreme Rules ‘Hybrid’ Reimbursement Model OK For PIP Claims

By Insurance Journal staff | December 10, 2021

Automobile insurance carriers in Florida may limit reimbursement to health providers in keeping with a fee schedule in a personal injury protection policy, the Florida Supreme Court decided in a decision posted today.

“We agree with the Second District Court of Appeal that the PIP policy issued by State Farm was effective to authorize the use of the schedule of maximum charges under the relevant provisions” of a 2013 state law, the court said in its opinion in MRI Associates of Tampa vs. State Farm Mutual Automobile Insurance.

MRI Associates had filed suit against State Farm over 19 PIP claims. The imaging firm argued that the much-debated Florida PIP insurance law demands that insurers choose one of two reimbursement methodologies: a “fact-based” calculation of reasonable charges, or the schedule of maximum charges. State Farm used both methods in an unauthorized hybrid model, costing the imaging firm revenue, MRI Associates said.

The high court’s per curiam opinion, which answered a question from the appeals court, disagreed.

“We have never held that the ‘reasonable charge method’ and the ‘schedule of maximum charges’ are mutually exclusive methods for determining the reasonableness of reimbursements,” the court wrote.

The auto policies at issue noted that State Farm would pay properly billed and documented reasonable charges for bodily injury. The policies also said those charges are defined by the statutory fee schedule of maximum charges, which takes into account usual and customary charges, Medicare pricing, and other factors.

The policies also cautioned that the insurer would “in no event pay more than 80% of the no-fault insurance statute’s schedule of maximum charges.”

The Supreme Court noted that this is the third time in the last decade that it has considered a case in which a health care provider challenged an insurer’s use of the PIP statute’s schedule of maximum charges. In the previous cases, the court held that the insurer must properly notify providers in order to take advantage of the fee schedules.

This may not be the last time the court reviews a PIP case. A move to repeal the Florida PIP insurance requirement passed the Legislature early this year but was vetoed by the governor. Legislative leaders have said the issue will probably not go far if raised again in the session that begins Jan. 11, but that it could be considered in 2023.

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