Supreme Court of Florida
____________
No. SC18-1390
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MRI ASSOCIATES OF TAMPA, INC., etc.,
Petitioner,
vs.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Respondent.
December 9, 2021
PER CURIAM.
In this case we consider whether the provisions of a personal
injury protection (PIP) insurance policy permit the insurer to limit
reimbursement payments in accordance with a statutory schedule
of maximum charges. We accepted jurisdiction to review State
Farm Mutual Automobile Insurance Co. v. MRI Associates of Tampa,
Inc., 252 So. 3d 773 (Fla. 2d DCA 2018), which certified a question
of great public importance related to its holding that State Farm’s
policy provisions permitted the insurer to use the schedule of
maximum charges even though the policy also refers to the use of
other statutory factors for determining reasonable charges. See art.
V, § 3(b)(4), Fla. Const. 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 section 627.736(5), Florida Statutes (2013).
This is the third time in the last decade that we have
considered a case in which a medical services provider, as the
assignee of an insured’s PIP policy benefits, challenged an insurer’s
use of the PIP statutory schedule of maximum charges. In Geico
General Insurance Co. v. Virtual Imaging Services, Inc., 141 So. 3d
147 (Fla. 2013), we interpreted amendments to the PIP statute that
became effective in 2008 authorizing the use of the schedule of
maximum charges. We held that under that version of the PIP
statute “a PIP insurer cannot take advantage of the Medicare fee
schedules to limit reimbursements without notifying its insured by
electing those fee schedules in its policy.” Id. at 160.
Subsequently, in Allstate Insurance Co. v. Orthopedic Specialists,
212 So. 3d 973, 975 (Fla. 2017)—applying the same statutory
provisions—we upheld the sufficiency of a policy notice providing
that PIP payments “shall be subject to any and all limitations,
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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.” In the case now on review, we consider the sufficiency
of a policy notice governed by the terms of a statutory notice
provision that became effective in 2012.
In explaining our decision, we begin with a review of the
pertinent statutory provisions followed by an examination of the
relevant terms of the PIP policy. We then briefly consider the
proceedings below and the decision of the district court, including
the specific question certified. After a summary of arguments
presented by petitioner MRI Associates challenging that decision,
along with opposing argument presented by respondent State Farm,
we explain why the policy provisions clearly and unambiguously
authorize the use of the statutory schedule of maximum charges in
accord with the requirements of the statute.
I.
Subject to certain conditions and limitations, section
627.736(1)(a) provides generally that PIP medical benefits must
cover “[e]ighty percent of all reasonable expenses for medically
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necessary medical, surgical, X-ray, dental, and rehabilitative
services.” Section 627.736(5) contains detailed provisions regarding
“[c]harges for treatment of injured persons.” Subsection (5)(a)
begins with the statement that medical providers “rendering
treatment to an injured person for a bodily injury covered by
personal injury protection insurance may charge the insurer and
injured party only a reasonable amount pursuant to this section for
the services and supplies rendered.” Following this broad
statement, subsection (5)(a) contains two major elements. The first
element is centered on an enumeration of various factors that may
be considered in determining the reasonableness of charges. The
second element sets forth the schedule of maximum charges that
may be used to limit reimbursement and provisions related to the
application of that schedule.
The first major element of subsection (5)(a) begins with a
statement that reasonable charges “may not exceed the amount the
[provider] customarily charges for like services or supplies.”
Subsection (5)(a) then sets forth the following provision regarding
factors that may be used in determining reasonable charges:
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In determining whether a charge for a particular service,
treatment, or otherwise is reasonable, consideration may
be given to evidence of usual and customary charges and
payments accepted by the provider involved in the
dispute, reimbursement levels in the community and
various federal and state medical fee schedules
applicable to motor vehicle and other insurance
coverages, and other information relevant to the
reasonableness of the reimbursement for the service,
treatment, or supply.
This provision is followed by section 627.736(5)(a)1., which
begins the second major element of the subsection and is central to
the dispute in this case. Under this provision, “[t]he insurer may
limit reimbursement to 80 percent of [the listed] schedule of maximum
charges” set forth in subsection (5)(a)1.a.-f. (Emphasis added.)
Provisions governing the application of the schedule of maximum
charges are detailed in subsection (5)(a)2.-5. Of particular
significance, subsection (5)(a)5. requires that an insurer provide
notice of its election to use the schedule of maximum charges:
Effective July 1, 2012, an insurer may limit payment as
authorized by this paragraph only if the insurance policy
includes a notice at the time of issuance or renewal that
the insurer may limit payment pursuant to the schedule of
charges specified in this paragraph.
(Emphasis added.)
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II.
State Farm’s PIP policy recognizes the statutory obligation to
pay reasonable charges: “We will pay in accordance with the No-
Fault Act properly billed and documented reasonable charges for
bodily injury to an insured caused by an accident resulting from the
ownership, maintenance, or use of a motor vehicle . . . .” The policy
includes a definition of reasonable charges that refers specifically to
the schedule of maximum charges:
Reasonable Charge, which includes reasonable expense,
means an amount determined by us to be reasonable in
accordance with the No-Fault Act, considering one or
more of the following:
1. usual and customary charges;
2. payments accepted by the provider;
3. reimbursement levels in the community;
4. various federal and state medical fee schedules
applicable to motor vehicle and other insurance
coverages;
5. the schedule of maximum charges in the No-Fault Act[;]
6. other information relevant to the reasonableness of the
charge for the service, treatment, or supply; or
7. Medicare coding policies and payment methodologies
of the federal Centers for Medicare and Medicaid
Services, including applicable modifiers, if the coding
policy or payment methodology does not constitute a
utilization limit.
(Emphasis added.) The policy contains an additional provision
referring to the schedule of maximum charges:
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We will limit payment of Medical Expenses described in
the Insuring Agreement of this policy’s No-Fault Coverage
to 80% of a properly billed and documented reasonable
charge, but in no event will we pay more than 80% of the
following No-Fault Act “schedule of maximum charges”
including the use of Medicare coding policies and
payment methodologies of the federal Centers for
Medicare and Medicaid Services, including applicable
modifiers: [reciting statutory schedule].
(Emphasis added.)
III.
In a dispute over the amount of payments due for MRIs arising
from nineteen individual PIP claims, a final judgment adverse to
State Farm was entered by the trial court on “the issue of whether
State Farm’s policy ‘lawfully invokes the schedule of maximum
charges . . . set forth in section 627.736(5)(a)(1).’ ” MRI Assocs.,
252 So. 3d at 774 n.1. On appeal, the Second District addressed
petitioner’s argument “that State Farm must elect either the
reasonable charge method of calculation under section
627.736(5)(a) or the schedule of maximum charges method of
calculation under section 627.736(5)(a)(1) and that because its
policy includes both, State Farm relies on an ‘unlawful hybrid
method’ of reimbursement calculation.” Id. at 775-76. The court
also considered petitioner’s claim that State Farm’s attempt to use
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this “unlawful” method requires that it “use the reasonable charge
method as outlined in the definitions section of its policy and
section 627.736(5)(a).” Id. at 776.
Based on the policy and statutory provisions that we have
already set forth above, the Second District recognized that “[t]he
State Farm policy tracks the method of reimbursement calculation
outlined in section 627.736(5)(a) and the limitation set forth in
section 627.736(5)(a)(1).” Id. at 775 (footnote omitted). After
discussing our decisions in Virtual Imaging and Orthopedic
Specialists, the district court pointed out that neither decision
“applies to policies created after the 2012 amendment to the PIP
statute, which the State Farm policy at issue in this case was.” Id.
at 777. But in refuting the challenge to the legality of State Farm’s
policy provisions, the district court relied on our statement in
Orthopedic Specialists “that the insurer’s ‘PIP policy cannot contain
a statement that the insurer will not pay eighty percent of
reasonable charges because no insurer can disclaim the PIP
statute’s reasonable medical expenses coverage mandate.’ ” Id.
(quoting Orthopedic Specialists, 212 So. 3d at 977). And in its
discussion of our decision in Virtual Imaging, the district court
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focused on the manner in which the statute we interpreted there
was organized: “By placing the reasonable charge method and the
fee schedules limitation in two separate but coequal subsections of
627.736(5)(a)”—that is, subsections (5)(a)1. and (5)(a)2.—“the
legislature created two distinct reimbursement calculation
methodologies.” Id. at 776.
Relying on that understanding, the district court pointed out
that “[i]n 2012 the legislature substantially amended section
627.736(5), setting forth the schedule of maximum charges
limitation as a subsection of the reasonable charge calculation
methodology”—by moving the provision enumerating various factors
for determining reasonableness (characterized by the district court
as the reasonable charge method) from subsection (5)(a)1. to
subsection (5)(a) and moving the schedule of maximum charges
from subsection (5)(a)2. to subsection (5)(a)1. Id. at 777-78. From
this reorganization of the statute, the district court concluded “that
there are no longer two mutually exclusive methodologies for
calculating the reimbursement payment owed by the insurer.” Id.
at 778.
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Reasoning that “an insurer may not disclaim the fact-
dependent calculation”—that is, use of the factors for determining
reasonableness enumerated in subsection (5)(a)—but “it may elect
to limit its payment in accordance with the schedule of maximum
charges under subsection (5)(a)(1)(a)-(f),” the district court rejected
the “argument that State Farm’s policy contains an ‘unlawful hybrid
method’ of reimbursement calculation and is therefore
impermissibly vague.” Id. The district court thus concluded that
“State Farm’s inclusion of the statutory factors in its definition of
reasonable charges tracks the PIP statute and is not inconsistent
with the policy language limiting reimbursement to the schedule of
maximum charges.” Id.
The district court completed its analysis by focusing on the
reference in the policy to the schedule of maximum charges:
State Farm’s policy clearly and unambiguously states
that “in no event will we pay more than 80% of the . . .
No-Fault Act ‘schedule of maximum charges.’ ” The policy
also includes language virtually identical to that of
section 627.736(5)(a)(1)(a)-(f), listing verbatim all of the
applicable fee schedules that it will use to limit
reimbursement.
Id. And the district court compared this policy language to the
policy provision we approved in Orthopedic Specialists: “State
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Farm’s policy language is even more clear and unambiguous than
that at issue in Orthopedic Specialists, which ‘state[d] that “[a]ny
amounts payable” for medical expense reimbursements “shall be
subject to any and all limitations, authorized by section
627.736, . . . including . . . all fee schedules.” ’ ” Id. (alterations in
original) (quoting Orthopedic Specialists, 212 So. 3d at 977).
Finally, the district court certified the following question of
great public importance:
DOES THE 2013 PIP STATUTE AS AMENDED PERMIT
AN INSURER TO CONDUCT A FACT-DEPENDENT
CALCULATION OF REASONABLE CHARGES UNDER
SECTION 627.736(5)(a) WHILE ALLOWING THE
INSURER TO LIMIT ITS PAYMENT IN ACCORDANCE
WITH THE SCHEDULE OF MAXIMUM CHARGES UNDER
SECTION 627.736(5)(a)(1)?
Id. at 778-79.
IV.
Unremarkably, the arguments the parties present to us center
on the analysis adopted by the district court. MRI Associates
contends—as it did in the district court—that section 627.736(5)(a)
contains two mutually exclusive methods of calculating the amount
of reasonable reimbursement—namely, (1) the method set forth in
subsection (5)(a)’s enumeration of factors for determining
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reasonableness, and (2) the maximum schedule of charges set forth
in subsection (5)(a)1. MRI Associates further contends that State
Farm’s election to use the limitations of the schedule of maximum
charges in subsection (5)(a)1. was improper because the policy also
referred to the use of factors enumerated in subsection (5)(a)—
described in the certified question as “a fact-dependent calculation
of reasonable charges.” According to MRI Associates, the policy’s
adoption of an improper “hybrid-payment methodology” was
nugatory and the use by State Farm of the schedule of maximum
charges is therefore precluded. Relying on our decision in
Orthopedic Specialists, State Farm counters by arguing that there is
no basis for condemning its policy for adopting an illegal hybrid
payment methodology. State Farm emphasizes that the schedule of
maximum charges is designed to operate as a limitation on
reimbursement—imposing a cap on the amount of payments
otherwise payable—rather than a provision that must operate in
isolation from the other provisions of the statute related to the
determination of reasonableness. 1
1. The parties present other arguments that are either
without merit or need not be addressed to resolve the issue
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V.
“Because the question presented requires this Court to
interpret provisions of the Florida Motor Vehicle No-Fault Law—
specifically, the PIP statute—as well as to interpret the insurance
policy, our standard of review is de novo.” Virtual Imaging, 141 So.
3d at 152.
When “interpreting an insurance contract,” this Court is
“bound by the plain meaning of the contract’s text.” State Farm
Mut. Auto. Ins. Co. v. Menendez, 70 So. 3d 566, 569 (Fla. 2011). We
are similarly bound by the plain meaning of the text of the
provisions of the PIP statute. We thus are guided by “what Justice
Thomas has described as the ‘one, cardinal canon [of construction]
before all others’—that is, we ‘presume that a legislature says in a
statute what it means and means in a statute what it says there.’ ”
Page v. Deutsche Bank Tr. Co. Americas, 308 So. 3d 953, 958 (Fla.
2020) (quoting Connecticut Nat’l Bank v. Germain, 503 U.S. 249,
253-54 (1992)). On the question presented here—which ultimately
presented by this case. We will not further comment on those
arguments.
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turns on the interpretation of the PIP statute—we conclude that the
meaning of the governing text is clear beyond any doubt.
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.
Neither Virtual Imaging nor Orthopedic Specialists contains any
such holding. Rather than being dictated by these precedents, the
controversy in this case is readily answered by the statutory text,
which contains provisions that were not applicable in those cases
and that wholly undermine the notion that section 627.736(5)
establishes mutually exclusive reimbursement methodologies.
The issue presented in Virtual Imaging was whether the
insurer was required to include a specific election in its policy to
use the limitations of the statutory maximum fee schedules. Virtual
Imaging, 141 So. 3d at 150. The Court decided that such an
election in the policy was required. Id. We reasoned that “when the
plain language of the PIP statute affords insurers two different
mechanisms for calculating reimbursements, the insurer must
clearly and unambiguously elect the permissive payment
methodology in order to rely on it.” Id. at 158 (citing Kingsway
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Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63, 67-68 (Fla. 4th
DCA 2011)). Because the necessary specific election was not
contained in the policy at issue, the Court had no basis for deciding
how a policy containing such an election would be applied.
Specifically, the Court had no reason to consider and decide
whether an election of the limitations of the schedule of maximum
charges would preclude an insurer from relying on the other
statutory factors for determining reasonableness. Our
characterization in Virtual Imaging of the PIP statute as “afford[ing]
insurers two different mechanisms for calculating reimbursements”
by no means establishes that those mechanisms are mutually
exclusive.
Orthopedic Specialists addressed the sufficiency of the policy
notice provided by the insurer of its election to use statutory fee
schedule limitations. Orthopedic Specialists, 212 So. 3d at 974. As
in Virtual Imaging, we recognized that “when the plain language of
the PIP statute affords insurers two different mechanisms for
calculating reimbursements, the insurer must clearly and
unambiguously elect the permissive payment methodology in order
to rely on it.” Id. at 977 (quoting Virtual Imaging, 141 So. 3d at
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158). The focus of our analysis was whether the policy notice was
ambiguous—a question not at issue in the case now on review—and
therefore should be interpreted against the insurer. Having decided
that the broad notice contained in the policy was sufficient and that
the insurer was therefore entitled to rely on the fee schedule
limitations, we were not called on to decide how the policy would
otherwise be applied.
Of course, here we are addressing a version of the statute that
we have not previously interpreted. Although we are not persuaded
that the reorganization of the statute relied on by the Second
District is a sound basis for determining the issue presented in this
case, we do believe that the text of the notice provision that became
effective in 2012 supports the result reached by the district court.
That portion of the statute provides:
Effective July 1, 2012, an insurer may limit payment as
authorized by this paragraph only if the insurance policy
includes a notice at the time of issuance or renewal that
the insurer may limit payment pursuant to the schedule of
charges specified in this paragraph.
§ 627.736(5)(a)5., Fla. Stat. (emphasis added).
This notice provision—providing that “an insurer may limit
payment” if the policy contains notice that “the insurer may limit
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payment pursuant to the schedule of charges”—cannot be
reconciled with the argument that an election to use the limitations
of the schedule of maximum charges precludes an insurer’s reliance
on the other statutory factors for determining the reasonableness of
reimbursements. The permissive nature of the statutory notice
language does not in any way signal that the insurer will be so
constrained by such an election. On the contrary, the language
signals that the insurer is given an option that may be used in
addition to other options that are authorized. This notice language
echoes the underlying authorization to limit reimbursements under
the schedule of maximum charges: “The insurer may limit
reimbursement to 80 percent of the [listed] schedule of maximum
charges.” § 627.736(5)(a)1., Fla. Stat. (emphasis added). Given the
full context of these provisions, a reasonable reading of the
statutory text requires that reimbursement limitations based on the
schedule of maximum charges be understood—as State Farm
contends—simply as an optional method of capping
reimbursements rather than an exclusive method for determining
reimbursement rates. By its very nature, a limitation based on a
schedule of maximum charges establishes a ceiling but not a floor.
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We rephrase the certified question as follows:
Does section 627.736(5)(a), Florida Statutes (2013),
preclude an insurer that elects to limit PIP
reimbursements based on the schedule of maximum
charges from also using the separate statutory factors for
determining the reasonableness of charges?
We answer this question in the negative.
VI.
We therefore reject the argument that State Farm has used a
prohibited hybrid-payment methodology, and we approve the result
reached by the Second District. No basis has been presented for
invalidating State Farm’s election of the limitations of the schedule
of maximum charges.
It is so ordered.
CANADY, C.J., and POLSTON, LABARGA, LAWSON, MUÑIZ, and
COURIEL, JJ., concur.
GROSSHANS, J., did not participate.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION
AND, IF FILED, DETERMINED.
Application for Review of the Decision of the District Court of Appeal
Direct Conflict of Decisions/Certified Great Public Importance
Second District – Case No. 2D16-4036
(Hillsborough County)
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David M. Caldevilla of de la Parte & Gilbert, P.A., Tampa, Florida;
Kristin A. Norse and Stuart C. Markman of Kynes, Markman &
Felman, P.A., Tampa, Florida; Craig E. Rothburd of Craig E.
Rothburd, P.A., Tampa, Florida; Scott R. Jeeves of Jeeves Law
Group, P.A., St. Petersburg, Florida; and John V. Orrick, Jr. of Law
Offices of John V. Orrick, P.L., Tampa, Florida,
for Petitioner
Marcy Levine Aldrich and Nancy A. Copperthwaite of Akerman LLP,
Miami, Florida; Chris W. Altenbernd of Banker Lopez Gassler P.A.,
Tampa, Florida; and D. Matthew Allen of Carlton Fields Jorden Burt
P.A., Tampa, Florida,
for Respondent
Mac S. Phillips of Phillips Tadros, P.A., Fort Lauderdale, Florida;
Kenneth J. Dorchak of Buchalter, Hoffman & Dorchak, North
Miami, Florida; Stuart L. Koenigsberg of Stuart L. Koenigsberg, P.A.
Miami, Florida; and Melisa L. Coyle of The Coyle Law Firm, P.A.,
Miami Beach, Florida,
for Amicus Curiae Floridians for Fair Insurance, Inc.
Edward H. Zebersky of Zebersky Payne Shaw Lewenz, LLP, Fort
Lauderdale, Florida; and Lawrence Kopelman of Lawrence M.
Kopelman, P.A., Plantation, Florida,
for Amicus Curiae Florida Medical Association
Maria Elena Abate of Colodny Fass, Sunrise, Florida, and
L. Michael Billmeier, Jr. of Colodny Fass, Tallahassee, Florida,
for Amici Curiae American Property Casualty Insurance
Association and Personal Insurance Federation of Florida
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