Geico General Insurance Co. v. Virtual Imaging Services, Inc.
141 So. 3d 147
Fla.2013Background
- In 2008, GEICO insured an automobile accident victim who received two MRIs from Virtual Imaging Services.
- Virtual Imaging assigned PIP benefits to GEICO and billed $3,600 for the MRIs, which GEICO paid at 80% of 200% of Medicare Part B, per §627.736(5)(a).
- GEICO’s policy promised 80% of medical expenses and defined medical expenses as reasonable expenses for medically necessary services, with no reference to Medicare fee schedules.
- The 2008 amendments to the PIP statute permitted limiting reimbursements using Medicare fee schedules but were permissive, not mandatory, and required insurer notice via policy election.
- GEICO’s policy did not elect the Medicare fee schedules, and the Third District had held that notice is required for using §627.736(5)(a)2 to limit reimbursements.
- The Supreme Court rephrased and answered the certified question: insurers may not limit reimbursements under the Medicare fee schedules absent policy notice of election, applicable to policies in effect from Jan 1, 2008 through July 1, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May insurer limit reimbursements using Medicare schedules without notice? | Virtual Imaging argues no; notice is required. | GEICO contends 2008 amendments allow it to use Medicare schedules without notice. | No; notice is required. |
| Do 2008 amendments create an exclusive method for determining reasonableness? | There are two methodologies for determining reasonableness. | The Medicare schedule method is an option, not mandatory. | There are two methodologies; Medicare method is permissive, not exclusive. |
| Does policy incorporation of the PIP statute negate the need for a separate notice? | Incorporation would allow use of Medicare schedules. | Policy must elect the Medicare method to use it. | No; election in policy is required for using the Medicare method. |
Key Cases Cited
- Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63 (Fla. 4th DCA 2011) (two methodologies for calculating reimbursements under §627.736(5)(a))
- Geico Indem. Co. v. Virtual Imaging Servs., Inc. (Virtual I), 79 So.3d 55 (Fla. 3d DCA 2011) (two-method approach to reasonableness under PIP statute)
- DCI MRI, Inc. v. Geico Indemnity Co., 79 So.3d 840 (Fla. 4th DCA 2012) (further approval of two-method framework under 2008 amendments)
- Geico General Insurance Co. v. Virtual Imaging Services, Inc. (Virtual II), 90 So.3d 321 (Fla. 3d DCA 2012) (certified question ruling aligning with two-method approach: notice required for Medicare-based limitation)
- Holy Cross Hosp., Inc. v. Allstate Ins. Co., 961 So.2d 328 (Fla. 2007) (insurer can reimburse at reduced rate via provider contract, not dispositive here)